The Thai capital is entering a new dawn with several multinational investments transforming the banks of the Chao Phraya. John Church reports
Is Thailand turning a corner? The government installed via a military coup last year has been at pains to point this out to the world, and evidence is mounting that it may be correct.
Political instability and economic malaise in the past couple of years had a chokehold on growth and Bangkok endured the brunt of this. But June figures from the World Bank’s Thailand Economic Monitor showed projected growth at around 3.5 per cent for 2015, up from 0.9 per cent the previous year.
Domestic demand has lifted, visitor figures in the first quarter of 2015 were at their highest ever, at 7.88 million (21 million by the end of September), and public spend is up. Out of 189 economies, Thailand now sits 26th for ease of doing business, up from 28th a year ago, according to the World Bank.
There’s more evidence from hotel booking agency HRS, which reported a huge 46.3 per cent increase in the capital’s room rates in the second quarter of 2015 compared with the same period the previous year.
Todd Arthur, HRS managing director for Asia-Pacific, says: “With a more stable environment, people are more confident travelling back to Bangkok. The multiple-entry visa is [also] likely to be a trade boon, making it easier for business travellers to visit often and attracting longer-stay tourists to the country.”
Still, instability lingers – the worst possible example being August’s bomb attack downtown. Thailand also has an ongoing insurgency in the south and a bitter political polarisation dampened by the military coup.
Ben Taechaubol, chief executive of Thai investment firm Country Group, told Business Traveller the day after the attack: “It’s frustrating when, economically, our country was on a positive trajectory and [is now] hindered by the sudden shock of this appalling incident.
“Nonetheless, I believe this will only have an interim impact on Thailand and our economy, as our people have time and time again shown spirit, unification and resilience. Furthermore, our outlook will remain positive as our nation continues to show strong core fundamentals and economic potential.”
If history is any guide, Taechaubol is right, and the effect of such one-off attacks, although sharp, are usually short-lived when foundations are strong.
ON THE WATERFRONT
In the meantime, multibillion-dollar developments along the Chao Phraya River, which threads through the heart of the city, are set to boost Bangkok’s potential even further. After something of a hiatus, the big hotel brands are descending with a splash on the riverfront.
David Robinson, director of Bangkok River Partners, a group formed to attract local and international business and tourism to Chao Phraya, says: “There’s been a couple of attempts at marketing the river as a destination, but this is the one that’s had the longest run. It was started by the luxury hotels here, between the Hilton and Sheraton down to the Anantara – so that includes the Millennium Hilton, Royal Orchid Sheraton, Mandarin Oriental, Peninsula, Shangri-La, Chatrium Hotel Riverside, Ramada Plaza Menam Riverside, and Anantara Riverside.
“They started the project about two-and-a-half years ago, and at that time the ambition was to promote the destination to the MICE [meetings, incentives, conferences and exhibitions] industry,” he says. “I advised them to broaden that out to make it a destination for leisure and tourism.”
LANDMARK PROJECT
Country Group’s US$1 billion Chao Phraya Estate project comprises three properties – Capella Bangkok, Four Seasons Bangkok and Four Seasons Private Residences – set on six hectares alongside Charoen Krung, the oldest road in Bangkok and an area steeped in history and cultural significance.
According to the group, this was the Crown Property Bureau’s last remaining “golden site” on the river.
“It’s very exciting to have the space in the city to do this,” says Richard Scott-Wilson, director of Hamiltons International, master planner for the project. [It’s] a piece of the city that hasn’t been touched for 30 years.”
Due to open at the end of 2018, the 312-room Four Seasons hotel will boast some of the city’s largest suites, at 315 sqm, along with a 1,400 sqm ballroom on 200 metres of prime river frontage.
The 73-storey residential tower has been designed so that all 355 units are corner-sited with views of the river and city. The Capella will have 101 rooms and villas.
Taechaubol says: “It’s meant to be a waterfront lifestyle, which cannot be replicated again – meaningful luxury and timeless elegance are my descriptions.” More than 300 individual title negotiations took place over four years just to get the land required, he adds.
The company is backed by Chinese investment, mainly via the Export-Import Bank of China and sealed in a 2013 ceremony overseen by Chinese premier Li Keqiang and former Thai prime minister Yingluck Shinawatra, with Beijing Construction Engineering Group installed as main contractor.
At the group’s Hong Kong exhibition in mid-May, Country Group registered sales of 700 million baht (US$20 million), the highest amount ever for a luxury project in Bangkok, according to the South China Morning Post.
At the front of Chao Phraya Estate, a park and public walkway is being planned by the Urban Design and Development Centre with Chulalongkorn University. Known as the Yannawa Riverfront Project, Bangkok’s first waterside promenade will extend 1.2km from the Country Group site to the Saphan Taksin BTS Skytrain station on one of the area’s most spectacular reaches.
With walking and biking trails, plenty of shade and art installations planned, Taechaubol says the project is “on a par with icons such as the High Line in New York”.
THE COMPETITION
Across the river, Iconsiam is another huge project – a US$1.54 billion initiative, the largest amount ever invested by the private sector in a property endeavour in Thailand – from partners Siam Piwat, Magnolia Quality Development Corporation and Charoen Pokphand Group.
Covering eight hectares and due for completion in 2018, it includes the Residences Mandarin Oriental Bangkok – the brand’s first apartment project in South East Asia, with 146 waterfront homes on 52 floors – along with the 70-storey Magnolias Waterfront Residences. There will also be two high-end retail complexes on 53 hectares, and attractions including a cultural museum. Like Chao Phraya Estate, it will offer facilities for yachts and water transport.
Other developments on the river include Minor Hotel Group’s Avani Bangkok Riverside, opening by the end of this year opposite the Asiatique night market. The first new-build Avani, the 26-storey property has 249 river-facing rooms and a rooftop bar. Lavish residential complexes such as the 54-storey Menam Residences (due to open 2017) and 57-storey Canapaya (2018) are also under construction.
“There’s certainly been an increase in interest in the river,” Robinson says. “We’ve formed a community group in the Bang Rak and Khlong San [areas] that adjoin Yannawa district. There’s a steering committee leading the establishment of a creative district and in the middle will be the Thailand Creative and Design Centre.
“The group includes the BMA [Bangkok Metropolitan Administration], Thammasat University, hotels, the art community, architects and small businesses, [all] looking at how we can support this area, attract the right businesses, preserve the right buildings and improve the environment – and we think this will start to have an effect on how people view the area.”
TRANSPORT TROUBLES
So the riverside renaissance has begun, but how successful these plans are and how many visitors will come to stay, shop and even invest may largely depend upon practical solutions to long-standing infrastructure problems.
Logistically, the city’s airport facilities are inhibiting Bangkok’s growth. This is no small problem considering the Tourism Authority of Thailand forecasts 28.8 million visitors this year, spending an estimated 1.4 trillion baht (US$40 billion). Throughput at the airports is more than double that number when transit passengers are included.
The government has announced an upgrade of Suvarnabhumi international airport – which is already operating well in excess of its design capacity of 45 million passengers a year – to include a third runway and two new terminals. With the runway currently undergoing an environmental health assessment and one of the terminals awaiting government approval, timeframes on completion are sketchy at best.
Don Mueang, Bangkok’s low-cost carrier airport and the nation’s second-largest hub, has a capacity of 18.5 million but is also expected to have its Terminal 2 and other facilities upgraded.
Combined, the two airports will cope with 120 million passengers a year by 2021, according to Airports of Thailand, with capacities of 90 million and 30 million respectively.
Another issue for the city is the headache of getting around. Bangkok traffic has been notorious for decades, and although much improved by mass transport initiatives, getting from A to B on the city’s roads can still take hours.
The government’s transport plan, which includes the airport revamps, is in essence patched together from the blueprints of the previous democratically elected governments, and includes an important upgrade for the Airport Rail Link network. This is all part of an eight-year, US$90 billion infrastructure investment strategy for 2015-2022 announced last October.
The mass transit railway system for the city and vicinity will be extended substantially with the acceleration of four new lines under construction and at least seven more lines either in the bidding process or awaiting approval – routes that will wind 250km around the city. A switch to a double-track system for high-speed trains connecting the city with the rest of the country is also a priority.
The source of funding for these various initiatives is largely being generated via public-private partnerships and, like Country Group’s Chao Phraya Estate project, a substantial portion is coming from China, although Japanese and European investors are also reportedly showing some interest.
Road construction projects in the capital are also set to receive a boost of 100 billion baht (US$2.8 billion).
NEED FOR SPEED
Private investment and support will be crucial for all these best-laid plans to come to fruition, as well as the government’s budget disbursement for its own initiatives, as deputy prime minister Pridiyathorn Devakula has admitted. So what do the big developers think?
Taechaubol says: “I think in respect to the large infrastructure projects, [the government] needs to take examples from overseas. There is plenty of private money willing to fund this and capable of funding this. If you wanted to expand eight to 20 lines in one go without spending the government budget you could very easily do that, with controls to ensure concessions.”
He adds: “The things to me that are holding us back are a lack of clear government direction to seize on our solid foundations and take it to the next level via initiatives that will encourage business and shopping, spending, and a different kind of hospitality experience.”
Thanawan Chaiwatana, managing director of Magnolia International Corporation, says: “The government’s plan is quite good, but no matter how much they build, the traffic will still be a problem. There are big plans, but it will take five to 15 years to build everything.”
Still, he sees a bright side. “For the major destinations, the mass transit planning is well covered. It is only a question of how fast we can do it. The issue [for] me is the politics, rather than the capital. If the political stability is quite high, then the plans have a high probability to be executed.”
Whether a caretaker government can successfully steer through an ambitious transport plan and guide the city into its next phase is in question. Perhaps listening to the developers and other stakeholders that are getting it right in areas like Bangkok’s riverfront may be the key.
