Investment Strategy for Land Owner

Abstract

Amara & Sons Co., Ltd. (A&S) is a small family company in Thonglor area with 30 years of experience in sports club and office/housing rental business. As management changes from generation to generation, business practice also changes and business expansion is being explored. Within the available site, various types of real estate developments are analyzed, and a service apartment project has been conceptualized to be A&S’ next project by dividing into two phases. Real estate market in Thonglor area has been rising steadily, and with A&S’ already available sports club, serviced apartment is believed to take A&S toward cash solvency. Investment strategy study is done to find which product type should to be offered and at its appropriate price based on competitor benchmarking. This study shows that A&S should be able to start the second phase of the project by setting the unit price marginally above the average market rate. At 50 percent occupancy rate, the bank loan will not be needed if A&S is willing to wait one year after the completion of the first phase. With this serviced apartment, A&S should achieve the cash solvency which will allow A&S to explore further real estate developments in the growing Thonglor area.