Goldman Sachs and Apollo invest in Thai developer
United States-based global investment heavyweight Goldman Sachs and Apollo Global Management of the U.S. are investing $236 million in Thailand’s Pace Development Corporation, the builder of Bangkok’s tallest skyscraper and a firm that has plans for other high-profile real estate developments in the near future, Pace’s CEO said last week.
“The investment reflects increasing confidence from international investors in Thailand, its business opportunities and the future of its tourism industry,” said Sorapoj Techakraisri, chief executive officer of Pace Development.
In October last year, Pace unveiled its flagship development, MahaNakhon, a mixed-use skyscraper with luxury residences, retail, offices and a hotel in the Silom business district of the Thai capital Bangkok. The 77-storey 1,031-foot tower is the tallest in Thailand and its unusual architectural design, described as “the shape of a square prism with the appearance of a rough spiral with cuboidal surfaces cut into the side of the building’’ makes it a unique and unmistakable presence on the city’s skyline.
The injection of funds by Goldman Sachs and Apollo will improve the liquidity of Pace, which is planning four other high-profile projects worth roughly $850 million that have already kicked off construction or are about to begin.
“With the [U.S.] investment, Pace will strengthen its equity position significantly and will greatly reduce the company’s debt-to-equity ratio,” Sorapoj said. “Meanwhile, Pace will continue construction on its four residential properties under way, namely the Ritz-Carlton Residences, Bangkok at MahaNakhon, MahaSamutr Villas, NIMIT Langsuan and the new Narathiwat-Ratchanakarin project.”
Apollo will make the larger of the two investments by the U.S. firms, throwing in $166 million, while Goldman Sachs will invest roughly $70 million.
“We look forward to working with Pace for many years to enhance the value of what we believe is one of the best real estate assets in Asia,” said Philip Mintz, head of Apollo’s real estate portfolio in Asia. He said that working with a developer with the experience of Pace, and the opportunity to have an ownership stake in a ‘trophy tower’ in Asia were strong attractions for his firm to invest.
Goldman Sachs is expected to take a 49-percent stake in the Bangkok Edition Hotel, which is part of the MahaNakhon tower. The tower boasts the tallest roof top bar and observation deck in the country.
Apollo describes itself as “a leading global alternative investment manager … a contrarian, value-oriented investors in private equity, credit and real estate, with significant distressed expertise.” As of August 2016, the company was managing $188 billion investments.
Goldman Sachs had in excess of $861 billion in assets as of 2015 and is arguably the world’s premier investment bank.