CP merging property arms

       CP Group plans to merge its two real estate firms, CP Land and CP Plaza, and list the new company on the stock market in order to triple its revenue, said group vice-president Sunthorn Arunanondchai.
       He said listing on the stock market would bring a new dimension to the group's real estate arm and attract funds as well as outside executives to help the business grow more quickly.
       "We have studied Hong Kong Land and some Singaporean real estate firms as they have plenty of properties like ours," said Mr Sunthorn, a founder who established CP Land 22 years ago.
       "We're more than 50% ready to enter the stock market [and] our financial adviser, Asset Plus, has worked on preparing us for some time," he said.
       The two companies share a core group of 20 shareholders. More than half of the shares are held by CP Group and the rest by executives. It has asked the shareholders to raise around one billion baht,300 million of which was raised in the past few weeks.
       The group expected to float 30% of its new registered capital in the market. It will be called CP Land Group.
       "The CP Group always builds new staff and should have new executives to carry on my job," said Mr Sunthorn,66.
       CP Land is a property developer and has registered capital of 2.5 billion baht.CP Plaza, capitalised at and 1.1 billion baht for, holds plaza and hotel assets generating annual income of around one billion baht. The properties of both firms have a combined value of more than 10 billion baht.
       "Despite a slowdown in the property market, the group is set to acquire more assets, looking at income-producing properties like office buildings and hotels with a target payback period of not longer than eight years," he said.
       The company earlier bought the former headquarters of TMB Bank in Phaya Thai and plans to spend 100 million baht renovating it. The building, to be named CP Plaza 3, will start generating income next year.
       "Sometimes we have to accept failure," said Mr Sunthorn, mentioning for-mer plans to develop a condominium in North Park and an industrial estate on 3,000 rai in Rayong. Both projects have been frozen since last year due to unfavourable market conditions.
       He said developing a project from the very start was very costly and took a long time. In Rayong, it has invested billions of baht to prepare for investments in the petrochemical business.
       The group also recently bought back all shares from its partner, Magnolia Quality Development Corporation, in the joint venture CP Magnolia Corporation and stopped sales of The Chur condominium in Pattaya.
       "It was unfortunate that Pattaya faced a bad situation like the [Songkran political] riots," he said."We needed to freeze the project and return the money to buyers."
       The project was formerly planned for a 29-rai site near Lotus Pattaya with more than 700 units,10% of which were booked.
       By year-end, the group expects to have 1.5 billion baht in revenue with a before-tax profit of 400-500 million.