Central Group, WHA form $23.61m JV for logistics biz


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Image from Central Pattana's website
Image from Central Pattana's website

Thailand based retailer Central Group announced a 50:50 joint venture with the logistic real estate company WHA Corp to develop a warehouse and distribution centre on its land in Ayudhaya province.

The new JV, called WHA Central Alliance Co, has a registered capital of 850 million baht ($23.61 million).

“We have no plan to make logistics become one of our core businesses. However, logistics is a significant part of our retail business. If we want a healthy growth, we need to improve our supportive business as well. We believe that this JV will lower our logistic cost and enhance our management efficiency,” Central’s deputy chief executive officer Prin Chirathivat told the media.

It has divided the development plan into three phases with total space of 250,000 square metres on 320 rais (51.2 hectares) of land.

In the first phase, it will create a 84,000-square-metre warehouse to serve the demand from Central Group. Then, it will develop additional 28,000 square metre in the second phase and lease to other customers. Both the ephases are scheduled to complete within next year.

“We expect to generate around 100 million baht in revenue from the first two phases. Then, we will sell the asset in the first phase to the real estate investment trust in 2017, the second phase in 2018 as well as the remaining 160,000 square metre in the third phase in 2019,” he said.

The deputy CEO also revealed that Central Group remained cautious about its investment although the economy is showing sign to recover next year.

“We may invest slightly lower than our earlier allocated budget of 30-40 billion baht. Despite the economic recovery, we would like to see a little longer whether or not consumer’s spending has resumed,” he said.

The group’s revenue are expected to expand 10 per cent from last year, he added.

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