Dutch investment group ECC sees potential for its destination malls in Thailand and Vietnam

Pictured Left: The Promenada Chiang Mai will have two floors with a tropical feeling and resort style, with a focus on fashion shows and other events.

'You should be fearful when everyone is greedy and greedy when everyone is fearful," is one of the maxims of billionaire investor Warren Buffett. The saying resonates these days with Tjeert Kwant, whose Netherlands-based ECC Group is looking to tap into retail markets across the region including Thailand.

As companies start become increasingly cautious about expansion, few are looking at the opportunities becoming available as prices of land and construction costs drop.

"I must admit that in past there was an overvaluation of property assets but lately the prices have started to normalise and it has started to give us some hope of being able to make our moves," said Mr Kwant, the CEO and partner of ECC.

ECC is a real estate development and investment group with a focus on emerging countries. Since its establishment in 1991, it has specialised in developing and managing large-scale retail projects under the Promenada brand name.

The group is active in many markets in Europe and Asia including Poland, Hungary, the Czech Republic, Vietnam and Thailand and has so far invested $350 million in completed projects. Another $500 million in investments are in the pipeline, focused mainly on retail development in Southeast Asia.

The group's success in Budapest encouraged ECC to look beyond eastern Europe and it sees markets in this region as underdeveloped, especially the likes of Vietnam.

Even in countries where the retailing market is mature, such as Thailand, there is a market for a niche retailing, says Mr Kwant. ECC aims to open at least one or two new malls in Bangkok and is also building a mall in Chiang Mai.

ECC, he says, focuses on developing new projects and is not very keen on taking over older ones and renovating them, or even becoming a financial investor. The reason is that returns on new projects are in excess of 20% but such high figures are not available in investment projects.

‘‘I must admit that in past there was an overvaluation of property assets but lately the prices have started to normalise and it has started to give ussomehopeof being able to make our moves’’ TJEERTKWANT CEO and partner, ECC Group

The focus on destination malls has helped push ECC to look for markets where the demand exists but the supply is lacking. Chiang Mai is one such market as it has only one major mall, Central Airport Plaza.

"If we create a resort-style shopping mall, the acceptance would be relatively good," he said.

The Promenada Chiang Mai would have two floors with a tropical feeling and resort style, with a special focus on fashion shows and other attractions for shoppers. "Our aim is to create an ambiance of a high-street shopping that is covered and cooled," Mr Kwant said.

The Promenada Chiang Mai is expected to open in the second half of 2011, located along Ban Sahakorn Road, linking the Superhighway and second ring road, in an area well known by Chiang Mai residents for its accessibility and shopping opportunities.

With 75,000 square metres of retail and entertainment space, Promenada Chiang Mai will offer an innovative mix of international and local brands in fashion, food and beverages, as well as leisure and entertainment.

The project represents an investment of 3.1 billion baht. When completed, it will employ 3,000 Thai people. Construction is scheduled to start in the second half of 2009.

ECC International Real Estate, ECC Group's holding company in Thailand, has received a licence from the Board of Investment (BoI). For the development of the Promenada Chiang Mai, it has formed a partnership with VGF Design, a Chiang Mai-based company specialising in the design, manufacturing and retail of luxury furniture.

Although some Thai retailers have expressed interest in Vietnam, none have taken the plunge yet, says Mr Kwant. "There is no destination shopping mall in Vietnam and ours would be the first."

ECC plans to invest $105 million in a shopping mall that would have 82,000 square metres, in collaboration with Singapore's GuocoLand Group.

Singapore@Canary, a project similar to Promenada Chiang Mai, will be located on the outskirts of Ho Chi Minh City. Phase I is expected to be completed in the third quarter of 2011 and Phase II in the fourth quarter of 2012. It would be Vietnam's first international standard destination mall.

Mr Kwant said ECC aimed to have at least a few malls in Vietnam as there was a major demand but the number of sites was very limited.

To help finance its projects in Southeast Asia, the group established ECC Invest in 2007. It is launching a fund, ECC Retail Investment Holding, with a total size of $250 million. The group says that its investment in Asia is likely to be financed mainly through internal sourcing.

Source: Bangkok Post 9 May 2009