Magnolia reviving dormant hotel

Luxury condominiums part of mixed-use plan

A Ratchadamri Road building that has been dormant for 15 years will be revived by a new investor, Magnolia Quality Development Corporation Limited (MQDC), owned by the Cheavaranont family, with an estimated investment of at least 4 billion baht for construction.

The site between Peninsula Plaza and the Grand Hyatt Erawan will have access to Ratchadamri and Phloen Chit roads

A source in the property industry said the project needed to be undertaken in a joint venture with the current lease-rights holder Maneeya Group as it needed access to Phloenchit Road from the Maneeya-owned Renaissance Hotel located near the back of the plot.

“The shape of the plot has narrow frontage. Depending only on Ratchadamri Road without any other access, it may be impossible to make the project happen,” the source said.

The source said the joint venture firm, co-invested by the MQDC subsidiary Magnolia International Corporation, planned to develop the 5%-completed building as a mixed-use project.

It will comprise 1,000 square metres of retail space, 6,000 sq m of office space, a 250-room six-star hotel and 400 to 500 units of high-priced condominiums with total usable area of up to 62,400 sq m.

As the plot is a leasehold property owned by the Crown Property Bureau, condominium prices will be 130,000 to 140,000 baht a sq m. Other luxury condominiums nearby are priced from 200,000 baht on average, said the source.

“Generally, leasehold property value is one-third of freehold but for a property in a prime location like this one, its value can reach two-thirds,” another source said.

The source said all office spaces would be used by the Debsirin Alumni Association, formerly an owner of the plot before Maneeya Group took it over, as the association required Maneeya Group to provide space for its office.

This suspended building, formerly the Royal Ratchadamri, started construction in 1994 and was being developed by Maneeya Group but was suspended a year later, just before the 1997 financial crisis, due to financial problems.

In 2007, the project was revived as Maneeya finished its debt restructuring and secured new investors. They were the Malaysian investors Zelan and Sahakarn which was owned by TRC Construction Plc. But it was halted again until now.

“Now there are only 15 years remaining under the lease contract but the bureau is likely to extend the contract as the remaining 15 years is not worth for an investment,” the source said.

MQDC had been looking at the project since last year and it made a decision earlier this year, said the source.

Magnolia International Corporation was established on March 30, 2010 with registered capital of 130 million baht. MQDC was set up in 1994 with registered capital of 1.45 billion baht and is held by members of Chearavanont family, the major shareholders of CP Group, the country’s biggest agribusiness conglomerate.

Source: Source: http://www.bangkokpost.com