With a $3.2 billion growth plan, Thailand’s Real Estate Giant Bets Big on Tourism Rebound.
Wallapa Traisorat, CEO of Asset World Corp., is flush with cash from one of Thailand’s largest initial public offerings in the hope of a post-pandemic boom.
With Covid-19 still preventing foreign tourists from visiting Thailand’s pristine beaches and bustling cities, leaving more than 80% of hotel rooms vacant, one would expect the CEO of one of the country’s largest developers of hospitality, retail, and office properties to fortify his position. Rather than that, Wallapa Traisorat, CEO of Asset World Corp. (AWC), has laid out a five-year growth strategy worth 100 billion baht ($3.2 billion) to position her company for a post-pandemic tourism boom. “We are currently experiencing a short-term impact,” she explains. “We believe Thai tourism has enormous potential for growth and strength.”
Wallapa’s optimism is bolstered by financial strength and foresight. AWC is, first and foremost, a family affair. The chairman is her father, Charoen Sirivadhanabhakdi, who ranks third on this year’s Thailand’s 50 Wealthiest list with a net worth of $12.7 billion. Her mother, who serves as vice chair, and her husband, who is a director, round out the board. Family-controlled entities collectively own the lion’s share of the company. Wallapa is also one of only a few female CEOs of a major Thai company.
For another, AWC is well capitalized, having completed a $1.6 billion initial public offering in October 2019, just months before the pandemic began. It was the largest-ever listing by a real estate company on Thailand’s stock exchange, spearheaded by Wallapa. The company is now valued at approximately 146 billion baht on the open market, with shares trading at approximately 4.5 baht, down from the offering price of 6 baht.
Since the initial public offering, Wallapa says AWC has secured 50 billion baht in credit lines from two Thai banks, including 30 billion baht from Siam Commercial Bank, to prepare for “growth and investment.” AWC reported in its first quarter report that it had 72 billion baht in property, plus nearly 1 billion baht in cash and receivables, but only 44 billion baht in long-term debt.
Financial stability aided AWC in weathering last year’s 83 percent decline in tourist arrivals from an all-time high of approximately 40 million in 2019. Revenue fell 54% year on year to 6.1 billion baht in 2020, tipping the company into the red, and fell another 56% year on year in the first quarter, resulting in a net loss of 594 million baht.
Nonetheless, Wallapa is planning four new hotels with 1,600 rooms to complement AWC’s 17 hotels with nearly 5,000 rooms. She also purchased the 287-room Sigma Jomtien Pattaya Hotel for 550 million baht in February.
AWC’s most audacious projects, on the other hand, reflect Wallapa’s background in architecture and land planning. Around 30 billion baht will be spent on redeveloping Bangkok’s historic Chinatown and riverfront areas, as well as on rebranding Pattaya, a notorious beach town south of the Thai capital, as a conference and exhibition destination.
“We believe Thai tourism has enormous potential for growth and strength.”
“We are looking to create an integrated lifestyle real estate group, with a particular emphasis on Thailand,” Wallapa, 47, says in a rare video interview from her Bangkok office. “That is the strategy we are pursuing to position AWC for future growth.” Prior to the pandemic, hotels accounted for 60% of the company’s revenue, including seven properties in the Imperial Hotel Group that Charoen acquired in 1994, as well as the Marriott Marquis Queen’s Park, The Athenee Hotel, and Okura Prestige in Bangkok.
Wallapa expects hospitality to continue to be a key driver of growth and announced last October AWC’s intention to build four new properties to be operated by Marriott International, including a Ritz-Carlton Reserve and Thailand’s first Autograph Collection hotel.
“They are one of the industry’s behemoths,” says Nikhom Jensiriratanakorn, director of hotel consultancy Horwath HTL in Bangkok. “They are expanding aggressively and strategically, utilizing all of their capital.”
In a May report, it predicted that Bangkok would spearhead a recovery in the Thai hotel industry, beginning in the second half of 2022 with a V-shaped recovery. Phuket will follow suit in 2023, after all travel restrictions have been lifted and reciprocal travel agreements with key markets such as China, Japan, Singapore, and South Korea have been established.
Wallapa grew up in Thailand as the second of five children, accompanying her parents on holidays that inevitably included tours of family businesses, which at the time primarily consisted of breweries and distilleries (Charoen’s Thai Beverage is the maker of popular Chang beer).
She recalls her father purchasing properties with no immediate plans for development, thereby establishing a massive land bank with which Wallapa would work decades later. Among them is a prime sea view location on which Banyan Tree Krabi opened in October.
After graduating from Silpakorn University in Bangkok with a degree in architecture, Wallapa moved to the United Kingdom to pursue a master’s degree in regional and urban planning at the London School of Economics and then a Master of Philosophy in land economy at the University of Cambridge. In 1999, she began her career with Merrill Lynch in Hong Kong as a financial analyst and married her high school sweetheart Soammaphat Traisorat the following year.
In 2001, she joined her father’s diversified TCC Group to focus on the group’s real estate-related businesses, the best of which were pooled to form AWC in 2018. The Traisorats have five children, and Soammaphat, the former CEO of TCC’s former joint venture with CapitaLand of Singapore, is a director on AWC’s board of directors.
“It’s an interesting transition,” says Bill Barnett, managing director of C9 Hotelworks, a Bangkok-based hotel consultancy, noting that Wallapa is well-known for assembling a professional team and concentrating on a small number of strategic partners. “She establishes solid relationships. It’s a well-defined strategy,” he says.
Unlike some other major hotel owners in Thailand, such as Italthai Group’s Onyx and Amari hotels and Central Group’s Centara, AWC’s sole focus is on Thailand, where its properties are operated by well-known regional and global hotel chains. “This is much more akin to large international hotel investment firms,” Nikhom of Horwath HTL explains. “AWC strives to create an ecosystem that benefits everyone.”
Wallapa is planning new developments with Singapore-based Banyan Tree Hotels & Resorts, following recent agreements with Marriott and Hyatt Hotels. While Banyan Tree operates its own resorts in Thailand, the company also manages AWC properties in Krabi and Koh Samui. “Asset World has evolved significantly,” says Ho Kwon Ping, founder and executive chairman of Banyan Tree and a longtime friend of the family. “They desire notoriety among guests, but among the investment community.”
Wallapa is focusing on three large-scale urban redevelopment projects: a 16.5 billion baht mixed-use development in Bangkok’s Chinatown, an 8.1 billion baht bet on reimagining Pattaya, and a 5.8 billion baht expansion of its sprawling open-air mall Asiatique The Riverfront in Bangkok.
Bangkok’s vibrant Chinatown, which dates all the way back to the 18th century, has long attracted tourists and is popular with locals for its street food. However, it lacks sufficient parking, subway lines, and tourism infrastructure, making it one of the city’s most congested areas. Wallapa intends to change that by developing an InterContinental Hotel alongside a “very chic” Chinese boutique hotel, retail outlets housed in restored heritage structures, Bangkok’s largest underground retail mall, parking and storage facilities, and a festival market.
While the project, dubbed Woeng Nakhon Kasem after a traditional Chinese market that once stood there, has come under fire for its excessive commercialization, Wallapa maintains, “We believe we can enrich the community, enhance the culture, and history of how Bangkok began.” The project will be the flagship and will serve as the heart of Chinatown.”
Transforming Pattaya—a former recreation area for US servicemen during the Vietnam War with a seedy reputation as a sex tourism destination—seems like a high-risk gamble. However, Wallappa believes that a new international airport proposed for 2023, as well as planned rail links connecting Pattaya to Bangkok’s two airports, as well as a monorail that will run directly past the AWC Center, could transform it into a global getaway comparable to Phuket.
“Pattaya has a slew of image issues,” observes Jeremy O’Sullivan, head of research at Savills in Thailand. “However, they are one of the few companies capable of pulling this off.” Nikhom of Horwath HTL concurs, noting that while AWC has the funds and the ability to attract the right partners to revitalize Pattaya, success will largely be determined by the speed with which public infrastructure develops. After all, Thailand is notorious for its tardiness.
AWC’s third significant project is to expand the 12-acre Asiatique development. Along with the tallest skyscraper in Bangkok, Wallapa plans to add a luxury Marriott hotel and residences. Adrian Smith, whose work includes Shanghai’s Jin Mao Tower and Dubai’s Burj Khalifa, is on board, she says, to design an iconic 100-story riverfront tower.
While real estate professionals such as O’Sullivan wonder whether the pandemic will prompt Thailand to repeat the 1997 Asian financial crisis’s property fire sale, Wallapa remains cautious.
While AWC’s large cash reserves and deep pockets have attracted numerous offers for potential deals, prices have not fallen to levels she considers attractive. “We’ve had nearly 200 projects offered to us,” Wallapa says, adding that the majority of sellers’ expectations are unrealistic. “Finding the right opportunity is difficult,” she admits. “We are still in an insecure period.”