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Bangkok Post
Bangkok Post
Business
KANANA KATHARANGSIPORN

Origin penetrating food business with joint venture

SET-listed developer Origin Property Plc will diversify into the food business, planning to spend 100 million baht next year to acquire or invest in three food chains after forming a joint venture with a food guru in the fourth quarter this year.

Chief executive Peerapong Jaroon-ek said investment in the food business will complement mixed-use projects the company is expanding as food and beverage (F&B) has become a key component of retail space and office buildings.

"F&B grows in line with the rising demand of younger customers who eat out for meetings and new experiences," he said. "They want to try new food, drinks or restaurants and are willing to spend."

Many F&B businesses struggle to control and manage costs, particularly rents. At most shopping malls, a lease contract is usually three years and rents will rise on renewal, which challenges many F&B owners, who are usually artists, said Mr Peerapong.

"We will help them [F&B owners] with the business model," he said. "As a landlord, we can enmesh our business with theirs. We have retail spaces at mixed-use projects in the pipeline that can ensure their business expansion and future growth."

With an investment budget of 100 million baht, Origin Property plans to acquire or invest in three food chains next year through a joint venture with a food guru it expects to form in the fourth quarter this year.

The joint venture company is to be named Origin Food Co, which was founded in April 2018 by Origin One, one of Origin Property's subsidiaries, with registered capital of 1 million baht. The food partner is projected to buy a 49% stake in Origin Food.

Mr Peerapong said the company will choose a small-scale F&B business with only a few branches to invest and scale up to 10 outlets.

One of the food chains Origin Food will invest in is a Japanese restaurant that Nomura Real Estate Development, its Japanese partner in condo development, introduced. The other will be either a coffee shop, bakery-cafe or other restaurant.

Origin Property is developing three mixed-use projects worth a combined 70 billion baht under the Park Origin brand, where retail spaces sized between 4,000-10,000 square metres will be available.

Three projects in Phaya Thai, Thong Lor and Phrom Phong areas are scheduled to be completed in three years.

"F&B draws people into malls, and accounts for 70% of the total lettable area," he said. "F&B will contribute to our residential developments as we spend 1% of project value each year on buying food coupons for promotions."

Mr Peerapong said the company had some 2,000 completed condo units worth a combined 7 billion baht remaining for sale from 14 projects. Around 1-2 billion baht per quarter is expected to be realised.

ORI shares closed yesterday on the SET at 18.40 baht, down 30 satang, in trade worth 56.3 million baht.

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