Fynn balances development and hospitality segments

Fynn Development Co, a newcomer owned by a shareholder of Thai Refined Salt Co, plans to develop a hotel in Phangnga, another on Koh Tao, and three residential projects in Bangkok worth more than 2 billion baht combined.

Chief executive Pongsethorn Salakshana said the new developer will strike a balance between the hospitality and property businesses, as they can complement each other but have different risks.

“Many developers have shifted to recurring income businesses because they have lower risk, but also lower returns over a long period,” he said. “Hotels require a huge investment initially yet can generate consistent income and have increases in capital value if they are successful.”

He said the hotel in Phangnga is in the design phase. It will be located on a beachfront plot in Khao Lak where 79 villas will be developed with an investment of at least 500 million baht. The hotel is expected to start operation in two years.

The company has remaining plots owned by Mr Pongsethorn’s family from a total of 117 rai for the project on Koh Tao. Development is in the third phase of a hotel and resort under the Haadtien brand. Fynn will spend around 500 million baht for the new phase.

Mr Pongsethorn jumped into the property sector 10 years ago with the development of Haadtien Beach Resort, offering 70 luxury villas on Koh Tao with room rates of 3,900-12,000 baht per night.

An additional 74 hotel rooms under The Beach Club label by Haadtien were developed on the same plot and opened three years ago. Both had an average occupancy rate of 74% last year.

The hotel business is developed and operated by his first firm, Modena Development Co, founded in 2002.

After the first hotel reached a break-even point, Mr Pongsethorn, 44, started residential developments in Bangkok by setting up Fynn in late 2015 with registered capital of 30 million baht.

Its first project was Fynn Aree, an eightstorey condo project worth 350 million baht on a 273-square-wah plot on Ari Soi 2 with 79 units. Launched in late 2015, it is 95% sold and scheduled to transfer by mid-year 2017.

Fynn Sukhumvit 31, an eight-storey condo worth 800 million baht, is its second project, located on a 321-sq-w plot on Sukhumvit Soi 31 and comprising 63 units sized 36-400 square metres. Prices start from 166,500 baht per sq m. On the same soi, it plans to launch a luxury townhome project.