Page 27 - Charn Issara Development Public Company Limited | Annual Report 2014
P. 27
Annual Report 2014 25
Charn Issara Development Public Company Limited
1. Risks associated with the success of new Company have to pay agreed rental in which case the Company
projects crucial to our financial status and expect to be able to meet target.
performance.
3. Risks associated with project construction
In the year 2014 the Company is developing a total of 10 projects
namely; a residential condominium project, the Issara Ladprao There is risk associate with project construction which can be
and ISSI Condo Suksawat in Bangkok, Issara Collection Sathorn in deriving from every cost of construction, shortage of labor, standard
Bangkok, The Issara Chiang Mai is in Ampur Muang, Chiang Mai of workmanship and construction time.
province, Baan Sita Wan project at Pak Chong, Nakornratchasrima
province, a vacation home project, Sri panwa phase 4 on Cape Construction cost is an important cost element in property
Panwa, Phuket, a townhome project, Issara Village on Cha Am development. There are problems of escalating construction cost
beach, Petchburi, Baan Thew Talay 1 (Aqua Marine) and Baan Thew and shortage of skilled labor which affect quality of works to be
Talay 2 (Blue Sapphire) and BLU project which are also residential handed over to customer.
Condominium on Cha Am beach. Those projects each has a project
value of approximately Baht 2,700 million, Baht 1,900 million, Baht In construction bidding the Company shall select large contractor
700 million, Baht 1,700, Baht 800 million, Baht 1,400 million, Baht 160 who has reliable profile such as Italian Thai Development PLC and
million, Baht2,000 million, Baht 1,800 million and Baht 1,500 million enter into a lump sum fix price contract which help the Company
respectively. Success of those projects will have a material effect on reducing the risk of variable construction materials and labor cost
the Company’s future financial position. However, the Issara Ladprao resulting in a good grip on cost control as experienced in the past.
condominium project. However, there are completed projects which
have been handed over to customers namely The Issara Ladprao, The selection of material for a project is important. The Company
Baan Thew talay Aquamarine and Issara Village townhome while shall get in touch with various suppliers for bidding of materials
on the Baht 1400 million 7 villas under development at Sripanwa allowing the project to benefit from reasonable material cost. In the
phase 4, 2 villas have been completed one of which has been sold. course of bidding for construction works the Company shall control
Baan Sitawan is under construction with partial completion some material costs by inquiring those costs in advance enable the cost
of which have been handed over to customers and the remaining control in line with the set budget.
is expected to be completed by the 4th quarter of 2015.
In addition the Company has develop the design of Baan Sitawan,
2. Risks associated with managing rental space Pakchong-Khaoyai by adopting a construction technology known
and lease the hotel for operation. as Modular in conjunction with SCG Heim to reduce risk of labor
shortage, quality of construction works and to increase the control
In the capacity of Manager of the Bangkok Commercial Property over construction period.
Fund whose assets consisting of a total rental space of 6,742.64
Sq.m in Charn Issara Tower and 23,945.04 Sq.m. in Charn Issara 4. Risk associate with acquisition of land for
Tower 2, the Company need to attain the Fund’s target. However, development.
from its historic performance since 2003 the Company has managed
those spaces effectively and achieved the benefits meeting with The Company has not maintain a land bank without project
the target. In August, the Company has leased Sri panwa hotel as it is believed that land acquisition can always be made under
from Sri panwa Property Fund whom the Company has sold such reasonable price and term from seller as it is well recognized for its
assets to. The assets leased back consist of 21 rai 2 ngan and 55 trust worthy and also benefit from connections of management. In
square wah of land including buildings; Pool Villa, Family Suite, 38 addition those lands acquired through joint venture enable a good
units of Luxury Villas and 7 units of Services Apartment together term which is based on market price and special term resulting in
with related hotel facilities. The lease term is 15 years while the a competitive edge base on development costs.
