Golden Land sees higher rent, development income

SINGAPORE (Reuters) - Thailand's Golden Land Property Development GOLD.BK said it expects more than 500 million baht ($15 million) each year in rental income from its new Grade A office building, which will be ready by 2010.

It also expects revenue from its housing developments to grow at a compound annual rate of 30 percent for the next five years.

Chief Executive Officer William Wilfong told Reuters at the Reuters Global Real Estate Summit in Singapore that he expects a shortage of Grade A office space to result in a hike in rents in two to three years.

"We're in a situation where there will not be any more supply built until rents get to 1,000 baht, which is still only US$3 or thereabouts per square foot but a 33 percent increase from current Grade A levels," he said on Tuesday.

"I would expect the rental income from the (new) office building should be well in excess of 500 million baht a year."

Golden Land's new office building Sathorn Square is in the central business district.

The company reported revenue last year of $3.76 billion baht, including the one-off sale of a piece of land and a building.

Wilfong said rental income from the new building will help balance the firm's revenue streams.

"The goal will be to balance it kind of half-half at the EBIDTA level between rental income from the investment properties -- the office and service apartments -- and development income from housing projects," he said, without giving the current revenue split.

Wilfong said office rents in Bangkok are now around 750 baht per square meter per month or US$2.50 per square foot per month.

He said the biggest threat facing developers in Thailand was not ongoing political tension but rising costs, but he added that the Sathorn Square project was not affected as it had locked in costs.

Shares of Golden Land last closed at 6.50 baht, giving it a market value of about $123 million. The stock has lost 28 percent over the past year and around 12 percent in the last six months.

(For summit blog: summitnotebook.reuters.com/ )

(Reporting by Yvonne Cheong; Editing by Kim Coghill)