One Bangkok, a decade in the making, the largest development in the city and possibly all of Southeast Asia, opened on Oct 25. Two out of five office towers are operational. Committed occupancies for operational spaces are 55% for both office towers collectively, and 85% collectively for two retail components that opened.
Altogether, the development comprises three dynamic retail experiences, five premium office towers, and five luxury and lifestyle hotels, including Bangkok’s first Ritz-Carlton and Andaz. Additionally, it boasts three upscale residential towers and a vibrant arts and culture scene, all set within 8ha of welcoming, sprawling greenery.
The development’s 17ha site is viewed as the Thai capital’s newest neighbourhood connecting the business districts of Sathorn and Silom with Rama IV Road. According to Frasers Property TQ5 (FPL), the project’s investment value is US$3.2 billion ($4.3 billion). FPL holds a 19.9% stake in the development, and its parent and major shareholder, TCC Assets, owns 80% of the project.
The official opening to the public on Oct 25 was largely a celebration of retail offerings on display. The retail area comprises three malls: Parade and THE STOREYS, which opened on Oct 25. POST 1928, comprising 40,000 sq m of upscale stores and fine-dining establishments, will open at a later phase. Parade is the largest of the three, with 85,000 sq m and includes the Japanese supermarket and food hall Mitsukoshi Depachika. Isetan Mitsukoshi, which operates the Japanese supermarket, has also taken a stake in one of the office towers.
According to Forbes, the final completion, initially slated for next year, has been pushed back to 2027 because of the pandemic. Thailand’s highest skyscraper, at 436m (a reported 92 floors), is scheduled to open in 2027. The signature tower (still officially unnamed) will combine office space with a hotel and is expected to be among the 10 tallest buildings in Southeast Asia — and far higher than the 315m (70 floors) of Bangkok’s current tallest building. Another six buildings in the complex are said to be 50 floors or higher.
The Singapore connection to One Bangkok started when FPL acquired a stake in the development in 2017. The relationship goes back further. In 2013, TCC Assets acquired Fraser & Neave, then the parent of Frasers Centrepoint, which was renamed Frasers Property on Feb 1, 2018. In 2014, Frasers Centrepoint acquired Australand Property Group and renamed it Frasers Property Australia (FPA).
In 2016, Panote Sirivadhanabhakdi became the group CEO of FPL. In an exclusive interview with The Edge Singapore on Nov 13, he recalls that discussions started on One Bangkok as far back as 2011.
“We started the project with land consolidation in about 2011,” Sirivadhanabhakdi remembers. “The land wasn’t as large as the current site. We aggregated the different parcels of land by 2014 to the size the site is today.”
Only after aggregating the land parcels did Sirivadhanabhakdi, who led the project for TCC Assets and FPL, start planning the development. “There are pros and cons of taking on a larger project. Cash flows from the project may be more lumpy. But Bangkok is our home base.” Sirivadhanabhakdi says.
Thailand’s risk-free rate (10-year government bond yield) is hovering around 2.42%, compared to 2014, when risk-free rates were as high as 4% as TCC Assets started agglomerating the land sites.
How Bangkok One fits into FPL’s plans
According to CBRE, in 3Q2024, average rental rates in Thailand for Grade A+ office space increased from 2Q2024, rising by 2.6% q-o-q to THB1,180 ($45.98) psm per month. “Grade A+ transactions primarily occurred in buildings with rising occupancy, enabling landlords to raise rents,” CBRE says. As at 3Q2024, 709,312 sq m of office space is under construction, with completion expected between 4Q2024 and 2028.
The retail landscape in Bangkok should be more active in 4Q2024, driven by increased domestic and tourist spending during the holiday season, according to CBRE.
“The government’s economic stimulus measures will further boost domestic spending, contributing to a more vibrant retail market,” CBRE adds.
Although One Bangkok is far from stabilising, it fits in with FPL’s refreshed strategy, which was announced in May.
On Nov 13, when discussing FPL’s FY2024 ended Sept 30 results, Sirivadhanabhakdi said the group’s strategy is to increase development exposure, drive higher returns for its investment properties, unlock value and improve capital efficiency.
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“Residential and non-residential development will offer us a better risk-adjusted return, aligning with structural trends. The second part is focusing on and leveraging our core capability in asset management to drive returns from an investment property. The third part is to continue ongoing capital recycling through the divestments to our REITs and third parties and collaboration with our strategic capital partners,” Sirivadhanabhaki recounts.
Loo Choo Leong, FPL’s group CFO, adds that development profit may be from residential development, as well as through FPL’s industrial and logistics portfolio, which comprises a significant pipeline of 211,700 sq m of development pipeline in Australia, and 160,000 sq m in Netherlands and Germany. FPL has a total landbank of around 2.9 million sq m for development.
“For development, we have primarily industrial and logistics properties which we develop, that creates a development profit,” Loo says, adding that the gain from One Bangkok is likely to be a fair value gain when the integrated development moves from a project under development to an integrated investment property.
One Bangkok fits neatly into all three of FPL’s refreshed strategy. Units in the three residential towers are likely to be sold and recycled. One office tower is partially divested to Isetan Mitsukoshi, which also operates the speciality supermarket. FPL has a stated strategy of raising capital efficiency by co-investing with capital partners. Its main partner in One Bangkok is TCC Assets. One Bangkok also fits in with FPL’s property, project and asset management abilities as it is likely the group’s largest project.
Integrated developments
In addition to everything that One Bangkok is to FPL, the integrated development is also Thailand’s first and largest fully integrated district equipped with state-of-the-art sustainability features and smart-city living.
Sirivadhanabhakdi says learning how to develop One Bangkok came from his experience with Central Park, Sydney, an urban redevelopment project purchased by FPA or Australand as it then was, in 2007, from Foster’s Group, which is now Carlton & United Breweries.
“That was an A$2 billion development planned by Norman Foster. It started in 2008, and we completed it,” Sirivadhanabhakdi describes. One Central Park, which is part of Central Park, was designed by French architect Jean Nouvel and was conferred the best tall building award in 2014. The mixed-use tower was a joint-venture between FPA and Sekisui House and was constructed as part of the first phase of the Central Park urban renewal project.
Central Park Sydney comprises residential units, student living, a multi-level shopping centre, commercial office space, childcare facilities and hotels.
In Singapore, FPL developed an integrated development, Northpoint City South Wing, a shopping mall, and North Park Residences, comprising 920 units, which was completed in 2018. In 2020, FPL divested 50% of NorthPoint City South Wing to TCC Assets for $1.1 billion.
None of FPL’s previous integrated projects are on the scale of One Bangkok. The foundation work took two-and-a-half years, during which the project boasted the largest concrete pouring in Southeast Asia.
Each pouring took 33 continuous days, and the project had five such pourings. “We built more than five million sq ft underground. The project is connected to the MRT. We worked with the largest concrete manufacturer in Thailand to create a new recipe for the pouring. It was such a large pouring that we generated a new low-heat concrete, which released less carbon. The manufacturer developed a GPS system for the concrete trucks so they could be positioned for the continuous pouring,” Sirivadhanabhadki describes. As he tells it, Malaysian, Korean and Singaporean engineers worked on the project day and night.
As soon as Covid-19 restrictions were lifted in Thailand, the One Bangkok project was the first in the county to restart construction.
“We had a design competition which resulted in One Bangkok. We appointed four international architects to design the project and paid them for their designs. At the final submission [for the project], the winning design would be given to all the designers,” Sirivadhanabhakdi says.
In Thailand, architects are a protected profession. Foreigners are prohibited from working in Thailand as architects.
“The condition is, at the final submission of the competition, because it is a paid design competition, I will be able to give the winning design to all the designers so they can consider what should be in the final submission. We learnt a great deal from these global architects; we are building a city masterplan. What isn’t stated is that we built a four-city block. If you go to the Grand Palace, there is an open field, like a courtyard. That’s the resemblance mapped into how One Bangkok was designed,” he indicates.
Additionally, with One Bangkok, Sirivadhanabhakdi says the joint-venture companies “learned how to integrate different parts of the projects, to connect better, to create a secure environment, without compromising the strength of what each component needs but to extend and innovate such that each component of the development connects with other parts.”
Smart development
Two certifications reflect One Bangkok’s smart building credentials. Achieving the highest level of both certifications places One Bangkok among the top 1% of the certified buildings.
WireScore certification is a global rating system for building infrastructure recognising best-in-class digitally connected buildings. SmartScore certification is the global smart building certification for technologically advanced intelligent buildings. This achievement signifies that the offices at One Bangkok meet the highest international standards for physical resilience and digital connectivity features, including Wi-Fi and mobile internet.
The entire One Bangkok district is equipped with over 250,000 sensors and 5,000 CCTV cameras for real-time monitoring and data recording, enhancing security and traffic control. Smart poles provide lightning and high-speed Wi-Fi connectivity throughout the project. Additional features and measures can optimise internet and mobile connectivity.
“In the design stage, we looked at the customer journey and designed and built One Bangkok around the customer journey. We have a control room in One Bangkok called One Power. Here, One Bangkok is divided into 16 different components, where we have 5,000 cameras and 250,000 sensors. Being smart is about having data,” Sirivadhanabhakdi says.
Accenture was brought into One Bangkok as a consultant at the design stage. “We wanted to frame the connected architecture for the different asset classes within the development. The project with Accenture was about building the customer journey with the built space,” Sirivadhanabhakdi says.
Hitachi Consulting was brought in to design a smart building. It was responsible for the high-level design of One Bangkok’s Smart City Platform and Sensor Grid. Everything in the development runs off an IoT-driven platform with smart services integrated into energy, water, telecommunications, predictive maintenance, security, traffic and parking. Sensors and analytics allow property management to adjust and optimise One Bangkok’s operations.
The benefits of smart building services at One Bangkok include optimal temperature, noise and air quality adaptation through sensors, as well as sensor-based predictive maintenance to reduce building system costs and downtime. Hitachi’s Platform also allows for highly efficient energy and water usage and enhanced security from property-wide CCTVs.
“When technology is smart, you’re not supposed to feel it. You’re supposed to use the technology,” Sirivadhanabhakdi adds. For example, automatic, heat-sensitive lights turn on when people enter a room. At night, the light should dim down. The temperature should remain constant, irrespective of the day’s temperature range.
Taking shape
One Bangkok has yet to be fully completed. However, it has taken shape. Sirivadhanabhakdi says it was a dream come true to build One Bangkok at such a scale, to an international standard in his hometown. “I could not imagine the physical form, but it took shape. It is an accidental marriage, a perfect match, a strong local base, creating a unique design of a large mixed-use development.”
There was a concern that the entire development would create unwanted noise and too much wind, but he points out that it now has good airflow because of its elevation, the stairways, escalators and open spaces.
The design was tested for safety in Canada. “This became a design for safety for the flow of people. We went to Canada to test the entire model in a wind tunnel,” Sirivadhanabhakdi reveals.
“I still need to make sure the baby can walk; it can then run, and the nutrients will help it grow. The built form is large; the open space is useful, not just for design purposes but for safety, for the flow of people,” he explains.
On a granular scale, Sirivadhanabhakdi points out that developers such as FPL value properties for their ability to generate income. “Investment properties are a natural hedge to inflation. We picked the office sector because it is stable. And retail can be very dynamic. We are going to be one of the most competitive spaces. We have a competitive advantage with our entry cost.” He reiterates that One Bangkok’s retail is in the very centre of town, akin to ION Orchard.
Loo says the property will ultimately be valued on a discounted cash flow (DCF) valuation, which depends on the income (and rent) that One Bangkok can generate. “To get a return on our investment, the return must exceed our weighted average cost of capital.”
One Bangkok has many facets, all at once, for FPL. To Sirivadhanabhakdi, who oversaw it from an empty piece of land, “One Bangkok is an example of modern real estate in the core CBD. I need this project to be authentic to Bangkok and worthy of what Bangkok deserves, a sense of place and a sense of structure, improving the quality of life in the city.”
