Udon Plaza targets Vientiane

[lee]

Udon Plaza targets Vientiane
By SOMLUCK SRIMALEE
Published on July 27, 2009

Udon Plaza, the developer and operator of UD Town in Udon Thani, is studying a plan to develop a community mall.

The firm is in negotiations with a Malaysian investor who has a long-lease contract to develop nearly 100 rai of land as a free-trade zone in the Thanaleng area of the Lao capital.

The company's managing director, Worapol Weerachatyanukul, said the company has a strong interest in investing in Laos after UD Town, an open-air shopping centre in Muang district, Udon Thani province, has its grand opening on November 23.

He added that if the company concludes a deal to develop land in Thanaleng, it estimates an investment budget of between Bt300 million and Bt400 million will be needed to develop a mall like UD Town on at least 25 rai.

"We have to take time before making a decision to invest because we have to study the Lao legal system and potential for investment. However, this has potential to be our next project investment after UD Town starts operations this year," he said.

The company is also negotiating with the State Railway of Thailand (SRT) to develop agency land in Nong Khai into a community mall.

Worapol said that the project in Nong Khai is still being negotiated and may be concluded next year.

Worapol, who is also the exclusive handset distributor for Total Access Communication (DTAC) in 11 northeastern provinces, started to develop UD Town three years ago after signing a 30-year lease with SRT to develop 25 rai of land located close to the station in Udon Thani.

Udon Plaza separated the land into two projects, with the first 11 rai developed as UD Bazaar and the remainder developed as UD Town. The investment cost Bt600 million, against the original estimate of Bt500 million.

Worapol said one-third of the funding was in the form of a bank loan and the remainder from the company's capital.

UD Town already has a booked occupancy rate of 80 per cent of the retail space of 13,000 square metres, with local and international brands such as Carrefour, McDonald's Drive Through, Minor Food Group (Swensen's and Dairy Queen), Lee, Wrangler and G2000 having made reservations.

The company expects the number of shoppers to average 25,000-30,000 a day, spending between Bt2,500 and Bt3,000 per head.

The company estimates its revenue will reach Bt150 million in the first year of operation, generating a return that will cover its investment within three years, he said.

He added that Vientiane would be the host for the next years SA Games from December 9-16. The company believes UD Town can benefit from this event by joining with SRT to launch a special route from Taleng station in Vientiane to UD Town.

Worapol added that the company also has plans to develop a hotel on the land to close to UD Plaza in the next three years.

"We are negotiating with SRT to lease between five and six rai close to UD Town and Plaza to develop a hotel which will have about 100 rooms. We will invest at least Bt200 million, but this investment will start three years from now. We have to wait and see whether demand in the tourist market recovering," he said.

Worapol has undeveloped land of nearly 300 rai in Udon Thani, which may be developed into an industrial estate or residential project.

"We will develop project by project. This will take between three and five years to develop," he said.

[BobHelm]

Interesting Lee. Although, from memory the original "intel" on the Udon site suggest a large number of visitors would be attracted to it from Laos. I am sure the huge multi-nationals are not concerned, but if I was a medium sized company I would be a little worried that the potential customers I thought I was going to have would not be with me for long...

[wazza]

Notice , no mention of Starbucks this time round.

Study the Lao legal system, ie what backhanders are required in 1 of the top 10 countries of the world for corruption.

They are still sticking to those unusually high numbers of daily consumers who not only visit, but spend 2500 B each etc.. Those sort of numbers, even if 5 people per car , thats 5000 cars and Central Mall and the opposite car parking area now, wouldnt go near those numbers. Massive car park needed and then add the hotel .....

The hotel would probably do ok, IMO, as long as its 5 star and has a pool etc, it would attract some expats etc..

[saint]

the company expects the nunber of shoppers to average 25,000 to 30,000a day , spending between 2500 and 3000 , baht per head ......... i wonder which day of the year that will is likely be then .

[bjoehoe]

the company expects the nunber of shoppers to average 25,000 to 30,000a day , spending between 2500 and 3000 , baht per head ......... i wonder which day of the year that will is likely be then .

Those figures seem well over the top. As using the media to reach potential target groups is a common marketing strategy, there is reason to wonder why this story appears in an english language newspaper. It could be an attempt to attract (gullible) foreigners to rent space at UD Town. The figures may also be used to justify rental fees. The claim that 80% of the space is alredy taken might be a bit inaccurate too and the intention beeing to make interested parties act before "it's to late". Let's hope that anyone considering it does their homework first.

[saint]

they must realy think we are a bunch of mugs . the sad part is , someone will in fact take the bait !!!! now , what shall i open , a bar , or a restaurant ?????? i know , i can open both best get my sorry arse down there a bit prompt , dont wanna miss out on my share of that potential 90,000,000 baht a day . shame i cant sell bullsh~t , i would definately be a rich man .

[rufus]

"Study the Lao legal system, ie what backhanders are required in 1 of the top 10 countries of the world for corruption."

Evidence for this assertion please? We are talking about Laos, not Thailand.
By the way this will come to nothing. Why would any Vientiane citizen bother going there? The Talat Sao is being redeveloped with a big supermarket, underground parking, theatres etc. Why bother going out of town?

[wazza]

Transparency International

Laos is Rated 168 out of 179

http://www.factmonster.com/world/statis ... tions.html

[BobHelm]

Thailand 84

[LoongLee]

What a crock ! (the sales and shopper projections)

[LoongLee]

Rufus,,,, can you furnish a link or website for the Talat Sao info?

[BobHelm]

It does depend which "view" you take wazza - yeah & Laos are still worse than Thailand in this one, but significantly better than before....
http://www.nationmaster.com/graph/gov_c ... corruption
Thailand 59, Laos 77 out of 159 (& both worse than the 'weighted average' so nothing to write home about.
From a "Western" viewpoint Laos will always score poorly in these sort of 'contests'. It is Communist & so takes its 'privacy' very much to heart. If this means it is as corrupt as hell, or just secretive, is a little difficult to actually establish.

[Farang1]

The company expects the number of shoppers to average 25,000-30,000 a day, spending between Bt2,500 and Bt3,000 per head.

Maybe, those are the numbers Green Leaf was looking at when they signed their lease. Then, they had to face reality.

Worapol added that the company also has plans to develop a hotel on the land to close to UD Plaza in the next three years.

She did mention, when they signed, there was suppose to be a hotel. Maybe the developers rescheduled the hotel for later than she was originally told.

[BobHelm]

I wonder if condos might be an alternate way forward to another hotel ???

[trubrit]

I wonder if condos might be an alternate way forward to another hotel ???

The problem with the site in Udon is that it has a height restriction on any development. This would rule out anything but a low level boutique style hotel. This was made clear in the original lease from the railway but maybe someone thought the council wouldn't notice.

[saint]

why does it have a height restriction on this site ? as i see it , its only spitting distance from A E K , which is what 7 or 8 stories .

[trubrit]

why does it have a height restriction on this site ? as i see it , its only spitting distance from A E K , which is what 7 or 8 stories .

I wouldn't know, you would have to ask the council that. It might be in my opinion a clause put on the lease by the land owners (Railway Company) to protect the appearance of the approach to the station. It could also be a planning requirement by the local authority to protect future development.The latter is most likely as several sites in the town centre have only been given five year renewable consents. Hence tent city and the D&Y cattle shed.

[rufus]

Rufus,,,, can you furnish a link or website for the Talat Sao info?

No sorry, LoongLee. I have seen no information on the web at all. The plans are up on a billboard next to the T.S. . mall, and the construction has been going on for some time. They have also appeared in the Vientiane Times. One of the buildings going up is being built in Lao style. Apparently that will house handicraft shops.

FYI there is another mall being built, but I am not sure of the exact location of this one. Supposedly this will also house restaurants and shops and, (get this), will be open 24/7. This was reported in the VT a couple of weeks ago; I find it hard to believe that any 24/7 place would get Govt. approval, but there you have it. They were even advertising fo people to rent the available shopfronts.

[parrot]

"another hotel ???"

I was at a copy shop today and the owner was reproducing the layout for a 150-170 room hotel that's due to be built where the old night market was, next to the fishery department on ThaamChedi Rd (ถนนธรรมเจดีย์). Supposedly 6 stories. Who's staying in all these hotels/mansions/resorts/guest houses? I'm wondering if there's a connection to the ownership of Mercs in town with the ownership of hotels?

I've been on the heliport at AEK.....thought it was 13 floors up. Can't imagine what all that space is being used for.