Towering in Thailand: Pace chief reflects on his firm’s ascent
Sorapoj Techakraisri juggles magazines, groceries and the country’s soon-to-be tallest building. By Busrin Treerapongpichit and Kanana Katharangsiporn
When Sorapoj Techakraisri, chief executive of Pace Development, first struck out on his own in real estate, he didn’t expect to make it this far.
Today his personal empire includes the 77-storey MahaNakhon building still under construction, the gourmet Dean & DeLuca chain and Thai-language versions of Billboard and Hollywood Reporter magazines. Mr Sorapoj recently spoke to the Bangkok Post about finding synergy with these dissimilar business interests.
For starters, he disagrees with the older generations’ approach to real estate.
“The way they [developers] do business does not make sense,” said Mr Sorapoj, 39. “If you have to grow your business by building new units all the time, how can demand catch up with supply in the end? People don’t buy a house every day.”
Mr Sorapoj admires developers whose business model lets the business grow sustainably, with a balance of income from sales and long-term revenue generators like hotels, retail and services.
“But I also could not figure out what we should do until Dean & DeLuca’s first store opened,” he said. “I just figured out what my long-term business plan should be.”
Pace Development has operated in accordance with the long-term business model that the boss believes makes sense.
“I’m not sure how to define my business,” Mr Sorapoj said. “At a glance, real estate, gourmet stores and media are not related, but actually they are. I think we offer customers a total package of lifestyle goods and services.”
From this year on, Pace expects 3 billion baht in yearly revenue from Dean & DeLuca out of an annual total of 10 billion.
In March, the distinctive MahaNakhon tower in Bang Rak district near Silom Road began to generate revenue and transfer residential ownership to buyers after a roughand-tumble period for Pace.
“After years of development, MahaNakhon is ready to show off its unique design,” Mr Sorapoj said, referring to the building’s pixelated, spiral-cut glass facade. “Pace’s debt-to-equity ratio will also decline to 3 from currently as high as 6 or 7.”
When completed, the 21-billion-baht MahaNakhon will be the tallest building in Thailand, offering residential units, hotel rooms, retail shops and lifestyle space.
So far, 75% of the 207 residential units have been sold.
The 159-room Bangkok Edition hotel, managed by Ritz-Carlton, will provide further income for Pace when it opens in the next year.
Half of Pace’s profit will come from residential development. The hotel and retail segments, including the 7,600-squaremetre MahaNakhon tower and Dean & DeLuca, will each account for 25%.
Mr Sorapoj is the middle child of a business family involved in auto parts and LPN Development, a real estate company. Despite being born rich, he spent a few years working at companies in consulting, finance and real estate to broaden his horizons before starting his own business.
Under a venture with friends, the then-26-year-old set up a company called Cinkara to develop Ficus Lane, a low-rise condominium on Sukhumvit Soi 40 worth nearly 1 billion baht.
“I started my own business because of my passion for distinctive architectural design,” he said. “But I don’t jump into anything that I don’t study well enough, like the stock market. I don’t have time to analyse the information of each company, so I definitely won’t put money in there.”
After five years developing projects on a billion-baht scale, he was offered an eightrai plot in a high-potential location near Silom’s subway station in 2007.
“A tough decision indeed when I got the offer,” he recalled, “but what were the chances that I would find this again? I couldn’t let it go.”
His parents “didn’t really agree” with the concept, but there was no doubt about the potential of the land and location. The project’s concept and design were things they never thought about, Mr Sorapoj said.
MahaNakhon has overcome obstacles. The project was delayed for a year because of the Bangkok riots in 2010, only two weeks after its pre-sale launch, leading to cancellations of nearly all pre-sale bookings. The company had to return deposits to clients.
“Some 48 out of 50 pre-sales asked for cancellation,” Mr Sorapoj said. “Our Israeli partner, IBC Group, also asked me about options for surviving the project. I actually had no idea at that time; I could only take a step back, keep ourselves quiet and look at what options we had.”
Amid those hard times, in 2011 the high-end grocery chain Dean & DeLuca allowed the company to be its franchisee — and diverted people’s attention from the delayed MahaNakhon.
“I did not expect it could be such a booming store from day one, but to my surprise, our store has been crowded from then until now,” Mr Sorapoj said. “So most people didn’t notice that we actually delayed the condo sales for a year.”
He later pursued Dean & DeLuca’s founder and was allowed to buy the business for 4.55 billion baht in late 2014.
After the acquisition of the chain, which has more than 50 branches worldwide, the need to focus on any residential segment apart from luxury was done away with.
“I am not that ambitious. If I can expand the store to just 10% of what Starbucks has now, I will be very happy,” Mr Sorapoj said.
The broadened scope has eased the pressure of having to build new projects to maintain growth.
“I have been working almost 24 hours a day because my businesses require me to work in two different time zones, Thailand and the US,” Mr Sorapoj said.
He has another business, Fierce Publishing, that brought two high-profile foreign magazines, Billboard and Hollywood Reporter, to Thailand.
The company began with only one publication, 2Magazine, in 2005 as Mr Sorapoj’s personal investment.
The publishing business was never a serious one until Pace acquired Dean & DeLuca. The group now uses its connections through the magazines to promote its retail and real estate endeavours.
“It’s synergy, as activities organised by Billboard or Hollywood Reporter can complement our lifestyle concept with social and cultural events, and we can sponsor events like the Cannes film festival and it is worthwhile to pay,” Mr Sorapoj said.
After the completion of MahaNakhon, plans call for expanding Dean & DeLuca in Japan, where Pace also intends to develop a ski resort and villa in Niseko, Hokkaido.