Redefining Bangkok

Thai Billionaire Family Looks To Up Bangkok’s Profile With One Bangkok, The Country’s Largest Private Sector Property Project

By Ron Gluckman

Forbes Magazine, September 2023

Zipping around sky-high cranes, trucks dart through a thicket of towers rising rapidly at One Bangkok, a massive construction site in the heart of downtown Bangkok. Over 9,000 workers toil daily at the huge 17-hectare site. Overseeing all of it from the start has been Panote Sirivadhanabhakdi, group CEO of the Singapore-based real estate firm Frasers Property. He’s the youngest son of Charoen Sirivadhanabhakdi, one of Thailand’s richest tycoons, whose $12 billion empire stretches from Europe to Australia, encompassing everything from breweries to warehouses.

Yet even amidst all their accomplishments so far, One Bangkok stands out as one of the most ambitious ventures undertaken by the Sirivadhanabhakdi family. It promises to redefine Bangkok’s skyline and help raise the city’s profile with a modern integrated real estate development that will offer world-class amenities and infrastructure. “Bangkok [now] has the potential to be an important hub for ASEAN,” says Panote.

The project, expected to cost about $4 billion, is the largest private sector property development (by cost) in Thailand’s history. When finally completed—expected by 2027—One Bangkok will house five massive office towers, five luxury hotels, retail areas with over 400 stores, three upscale residential towers, and a concert hall—with a combined total gross floor area of 1.8 million square meters. Roughly half of the site will be devoted to open or green areas, including a large open plaza with a circular fountain, dotted with trees and plants, in the center of the project. “One Bangkok is like a quantum leap, and not just for Thailand,” says Michael Glancy, country head for Thailand for real estate firm JLL. “In some ways, it’s like something we’ve never seen in the region.”

The development will also give Bangkok a new landmark, Thailand’s highest skyscraper, at 436 meters (a reported 92 floors), slated to open in 2027. The signature tower (still officially unnamed) will combine office space with a hotel and should be among the ten tallest buildings in Southeast Asia—and far higher than the 315 meters (70 floors) of Bangkok’s current tallest building. Another six of the buildings in the complex are said to be 50 floors or higher. As Panote says in a promotional video for the project: “Our vision is to create a place that will entrench Bangkok’s position as among the most desirable cities in the world to live, to do business and to visit.”

One Bangkok is approximately 80% owned by TCC Assets, the private holding company for Charoen and his family, and the rest by the publicly traded Frasers, which in turn is controlled by Charoen and TCC Assets. In total, the Sirivadhanabhakdi family will own over 90% of the project either directly or indirectly through Frasers. For Panote, 45, it is a very personal project, which has roots back to 2014. “It’s been a long journey,” says Panote.

The prime site sat idle for years, as it “temporarily” housed the Suan Lum Night Bazaar while authorities debated the fate of this unique parcel of land. The location could not be more ideal, located alongside Lumpini Park, the “Central Park” of Bangkok. Along one side is historic Wireless Road where many embassies are located and on another is Rama IV Road, one of the major throughfares of the city. Proposals came and went until Frasers and TCC topped rivals battling for pieces of the site with a bold masterplan for the entire tract. Tapping some of the world’s top architecture firms, they unveiled an ambitious scheme in 2016 for a new city center, an interconnected mini-city that would be used daily by an estimated 200,000 people, including an estimated 60,000 who would live and work in the complex.

Launched in 2017, with talk of opening in 2021, the timetable for completion was rescheduled due to the pandemic—One Bangkok is set to begin opening in phases early next year, Panote says in an exclusive interview held on-site. He forecasts that about 70% of the gross floor area will be open by mid-2024.

Panote discusses not only about how the complex will command some of the capital’s highest prices for office, retail and residential spaces, but also how it has been designed to be eco-friendly and sustainable. Recycled concrete pilings have been used in the concert hall and an integrated water-cooling system will replace individual air conditioning, saving energy and maximizing space. The buildings will also collect stormwater that will be channeled to green areas along the project’s edges and replenish the city’s aquifer. The project has platinum LEED certification (leadership in energy and environmental design) for neighborhood design from the nonprofit U.S. Green Building Council, considered the gold standard for eco-design in the global real estate industry.

It will also add modern office space to a city often noted for outdated buildings—until a recent spate of new office builds. “Bangkok had a huge shortage of grade A space for years,” says Jeremy O’Sullivan, former head of research at both Savills and JLL in Thailand, and now head of business development APAC for Cross Hotels and Resorts. “But that has completely switched now.”

From being sparse before, there is now a growing supply of new grade A office space—some feel too much. Office vacancy rates nearly hit 18% in the first quarter of 2023, according to JLL. JLL predicts office vacancy rates could rise to nearly 26% by year’s end, and over 30% by the end of 2027, when One Bangkok should be fully opened.

Among the buildings adding to supply is 61-floor One City Centre office tower opened in February, about a kilometer from One Bangkok, adding some 60,000 square meters of office space. Even closer along the edge of Lumpini Park, Dusit Central Park is being built on the site of the old Dusit Thani hotel, which will feature its own grade A office tower, along with a new Dusit Thani hotel and luxury residences. The $1.4 billion project is a joint venture between Thailand’s Central Group, the country’s biggest mall developer, and Thai hospitality group Dusit Thani, and is scheduled to open in 2025. Some real estate analysts have questioned who will take up all the new office space along with the retail, hotel and residences coming onstream with One Bangkok—and how long it will take One Bangkok to become profitable on the billions invested.

“People can see the view of what exists now, but we are seeing what it will be tomorrow.”

While a Frasers spokesperson declines to divulge break-even estimates, citing that it cannot provide forward guidance as a public company, Panote does have a reply to the doubters. He notes that over 65% of the office space in Bangkok is at least 20 years old—and the rising vacancy rates are among the older buildings as companies trade up to better digs. “The multinationals are moving out of the old central business district and there are still no replacement tenants because of the [design] specs of the buildings,” he says.

He notes that One Bangkok is able to command premium prices, even above what other grade A offices can get. While Frasers declined to discuss pricing, there are advertisements for One Bangkok office leases at rates of 1,400 baht ($39) per square meter per month, well above the current rate for similar prime office spaces, typically around 950 baht per square meter per month. Panote feels that One Bangkok’s size, address and well-planned design are its biggest attractions to high-end corporate clients, residents and retailers.

Panote patiently explains the long-term vision, which started well before the site was even acquired, when he returned to Bangkok a decade ago, after studying manufacturing engineering at Boston University in the U.S., then taking his master’s degree in information systems from the London School of Economics and Political Science. Previously, he had been working for the family’s Thai Beverage, but the chairman—as he refers to his father—shifted him into real estate, and he began a review of a massive land bank built up over many decades. (Brother Thapana is also in the family business, as president and CEO of Thai Beverage, the family’s flagship drinks company, as well as holding a slew of other directorships and positions in various family-linked businesses.)

A look at a map of the city shows the strategic developments circling One Bangkok, where Charoen had land holdings that Panote helped turn into projects such as office buildings Park Ventures Ecoplex and The Parq (the land for One Bangkok is leased from Thailand’s royal family’s Crown Property Bureau). These were the first steps in his vision to refocus Bangkok back to what he calls the “historic heart of the city” along Rama IV Road—the tagline for One Bangkok is “the heart of Bangkok.” Says Panote: “People can see the view of what exists now, but we are seeing what it will be tomorrow.”

THE URBANVERSE

One Bangkok encompasses a multitude of urban living experiences in one development.

Glancy predicts the centrally located project will attract top-paying tenants eager for ultra-Grade A space. Not only because of the quality and unique energy-efficiency, but the diverse configuration possibilities. Many big firms, especially in tech and with teams working together, prefer large footprints on single floors that have been hard to find in Bangkok. The average whole-floor size in Bangkok’s offices is just 850 square meters, Panote says, while the minimum floor size that major high-end corporate tenants generally prefer is 1,000 square meters. One Bangkok’s office floors will be a minimum of 2,000 square meters.

On the residential front, sales in Bangkok have been sluggish, as the post-pandemic recovery has been slowed by a lack of international interest, particularly from mainland Chinese investors. Yet real estate in Bangkok has a habit of defying gloomy projections, regularly outpacing economic growth. Panote says pre-sales of the first residential units to come on market are underway by invitation only with well-heeled clients. He says prices of 500,000 baht per square meter have been achieved, among the highest in Bangkok.

One Bangkok will also include five luxury hotels (so far Ritz-Carlton and Hyatt’s Andaz have been officially named for two of them). Here there is less concern from analysts. Although Bangkok is already chock-a-block with top hotel brands, it is also one of the world’s most-popular tourist destinations—and recently hotels have been filling up and rates rising along with visitor figures. Pre-pandemic, Thailand had a record 40 million visitors in 2019. For this year, the Tourism Authority of Thailand recently upped its forecast to 25 million visitors, more than double the number in 2022. Among the Sirivadhanabhakdi family’s holdings is the listed Asset World Corp., helmed by Panote’s sister Wallapa Traisorat, which is one of the largest hotel groups in Thailand, with brands such as Banyan Tree.

One Bangkok’s ability to compete in the retail sector is perhaps the biggest question mark. As with hotels, Thailand has a well-developed retail scene, and is an Asian powerhouse for shopping, headed by some large Thai groups specializing in retail, such as the Central Group and The Mall Group. Some question how this project can add value in a fairly saturated market. Panote vows to develop a strong retail franchise for One Bangkok on par with its strengths in hospitality, residences and offices. “I am building my way into it,” he says.

Panote vows to develop a strong retail franchise for One Bangkok on par with its strengths in hospitality, residences and offices.

Panote says One Bangkok’s edge will be to present a new concept for Thailand. He references Union Square, San Francisco’s iconic shopping district, that blends luxury outlets, designer shops, trendy eateries and beverage outlets, and an open space for special events. While this concept is increasingly common in cities around the globe, Bangkok’s retail scene has been dominated by huge air-conditioned and somewhat generic malls. Panote notes how Frasers has had success with projects such as Central Park Sydney, opened in stages around 2014, which rejuvenated a rundown part of the city with a blend of renovated historic buildings and new builds. The mixed-use development included shops, hotels, eateries, residences and offices on a 5.8-hectare site.

One Bangkok will take this concept to a new scale. While there are mixed-used developments in the city, most typically are more modest projects that involve malls with office towers, or a hotel with some shops and residences. One Bangkok supersizes prospects with a large residential and work population as customers for its shops and restaurants. “The difference is our location and also our integrated mixed use. We have the next level of lifestyle, well-being and convenience. Where else do you get this offered in the city?” asks Panote.

Yet he notes that the decade-long process to get One Bangkok built is only the first step, as next comes the management of this huge development once it is fully open—and of turning this masterplan into an icon for the city, and legacy for his family, that he has worked so hard to achieve. “Now that One Bangkok is about to become a reality, to me as I finish this ten-year journey, it seems like it will all begin again,” he says. “Now I have to take care of it.”