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Siam Future poised for gains

BackJan 11, 2008

The shopping mall developer Siam Future Development expects net profits to rise this year despite analysts' forecasts of a fall, as the opening of five new shopping centres will expand rental space. The company planned to launch a property fund in 2009 with The Esplanade, its largest development, as an underlying asset, president Somnuk Pojkasemsin said yesterday.

''Our revenues should rise along with rental space and net profit should be higher as well,'' he said. Revenues should match a mean 2.3-billion-baht forecast by two analysts polled by Reuters Estimates for 2008, he said.

The analysts expect the company's 2008 net profit to fall by 1% to 355 million baht from a forecast 360 million in 2007. SF, which will announce 2007 results next month, reported a nine-month net profit of 280 million baht.

Siam Future operates more than 20 open-air shopping centres, with an average 98% occupancy rate and long-term leases accounting for half of the space.

The new Bangkok malls would raise its rental space by between 70,000 and 100,000 square metres to 330,000 sq m at a cost of two billion baht funded by cash and bank loans, Mr Somnuk said.

The company will also sell its 50%- owned, 16,000 sq m Avenue Ratchayothin, due to open in April, to a property fund owned by major shareholder Major Cineplex late this year, Mr Somnuk said, without giving a sales value estimate.

SF increased its revenues about 12 times in the five years to 2006 on the back of the rising popularity of smaller open-air shopping malls in Bangkok and a lack of competition.

Last year, it planned to open five more but in the end opened only two as political turmoil, high oil prices and slowing growth hit consumer confidence.

''We should get good occupancy rates for the new malls. We have strong relationships with anchor tenants, which will be a magnet to other small retailers,'' Mr Somnuk said.

Its anchor tenants include the Big C, HomePro, Tesco and Major Cineplex, which owns a 21% stake in Siam Future.

Siam Future shares (SF) have fallen 11% this year, underperforming a 6.5% drop in the SET. They closed yesterday at 10.80 baht, up 10 satang. REUTERS

 

Source: Bangkok Post
Friday January 11, 2008