Since it was established in Singapore in 1963, the Frasers Property brand has become synonymous with luxurious residential, retail and hospitality projects around the world.
Five years ago, the company set itself a new challenge – to position itself as a force in the area of industrial properties, with its sights set on Thailand.
“Frasers Property saw the tremendous interest and considerable industrial development underway in Thailand, driven by production networks from Japan and China, and we naturally saw this as a great opportunity,” Frasers Property Industrial (Thailand) CEO Sopon Racharaksa tells The CEO Magazine.
As part of this undertaking, it acquired TICON Industrial Connection in 2017, rebranding it as Frasers Property Industrial (Thailand) two years later, with Racharaksa instrumental in steering the company under its new identity.
“There is always some concern with acquisitions and companies coming together,” he reflects.
“My job was to effectively combine our teams and integrate all aspects of the operations, notably TICON Industrial Connection’s work culture, into Frasers Property. I was thrilled to see the commitment and collaborative spirit throughout the process from our teams; we really are forging a stronger and unified path forward.”
Turnaround king
Racharaksa’s primary mission was to embark on a transformation of the new acquisition.
“When we assumed control, the company was already 28 or 29 years old, so quite mature,” he explains. “It had been engaged in the same activities, namely standard factory building and warehouse building, for many years.”
While the company was performing well, establishing itself as the leading player in the industrial property space thanks to its large portfolio, occupancies were starting to decline – a downturn Racharaksa attributes to the maturity of both the market and TICON’s products.
“When we first went in, occupancies were 67 percent, which showed both risk and opportunities,” he says. “So our transformation plan was centered on improving this performance, especially with regard to occupancy.”
We’ve been through two integration cycles and a lot of transformation along the way to improve the company’s performance.
The scale of Frasers’ global network meant Racharaksa had access to a number of experts from Australia and Europe who specialized in the same asset class – industrial.
“By leveraging Frasers Property’s global experience, we were able to expedite the transformation by working with a dedicated Thai team,” he says.
“We carried out strategic workshops with all of the senior management and enlisted consultants to make sure that this transformation would elevate the company to a whole new level.”
Having boosted occupancy rates to an impressive 86 percent as of July 2023, while also enhancing business operations, Racharaksa is confident he has achieved his objective.
As for his integration mission, he is also proud to claim success. Not only has he integrated what was formerly TICON into the Frasers family, he has also welcomed another company, Golden Land, specializing in residential and commercial developments, into the fold.
“We’ve been through two integration cycles and a lot of transformation along the way to improve the company’s performance,” he says.
Expansion mode
The focus is now shifting to growing its portfolio.
“We now have roughly 3.5 million square meters of asset under management, making us the largest provider of industrial property in Thailand,” Racharaksa says, adding this tally includes areas in Karawang, Makassar and Banjarmasin in Indonesia, as well as Binh Duong in Vietnam.
“The plan for the next few years is to generate at least 150,000 square meters annually, which should allow us to reach four million square meters as planned by 2026.”
By hitting that ambitious figure, Frasers Property Industrial (Thailand) will be in a position to keep investing in Thailand as well as neighboring countries.
“South-East Asia is very important for us because some of our customers are asking for spaces in Thailand, but also in Indonesia and Vietnam,” Racharaksa says. “So we have to be able to deliver and have the capacity to synergize with these countries as well.”
This has become a very competitive market now, so we have to retain our leading position.
Working within the latest trends is also crucial for the company’s ongoing success, with ecommerce booming, technology fast evolving and sustainability climbing up the corporate agenda post-pandemic.
“We are going to develop a lot of innovative solutions for our customers, incorporating the two S’s: Smart and Sustainable product innovation. Our approach will focus on quality, alongside quantity.”
Because Frasers Property Industrial (Thailand) has made such significant strides to date, it has seen a growing number of competitors entering the same asset class in pursuit of similar success.
“This has become a very competitive market now, so we have to retain our leading position,” Racharaksa reflects.
But he is confident Frasers Property Industrial (Thailand) will manage this, thanks to its organizational capabilities and its wealth of resources, including access to land banks. In fact, he sees the competition as healthy.
“With this influx of competition, we are improving and upgrading both the industry and the market,” he says.
“So as a result, I would say the market space is expanding; spaces are growing larger, which will be a collective benefit for everyone.”