Q&A with Chairman
Strong corporate governance and board leadership is mandatory for any successful company in the 21st century. With the Thai property sector facing increasing consumer demands, fast moving technology and further competition with the impact of AEC in the next 24 months, PACE is very proud to have seen highly respected business leader Khun Kraithip Krairiksh appointed as Chairman of PACE Development Corporation PLC. Graduating from Tufts University with a Bachelor’s Degree in Economics, then with a Master’s Degree in Development Economics from North Eastern University, U.S.A., PACE’s new Chairman brings an outstanding track record in finance. Serving as Chief Operating Officer at TMB BANK Public Company Limited until 2008, and more recently having led the board as Chairman of KT ZMICO Securities Company Limited, in this issue of Momentum we sit down with Khun Kraithip to understand how he sees the future of Thai property, and the role PACE will play in that evolution.
Q. Thank you for your time. As Chairman, where do you see PACE positioning itself in the Thai market place where we have not only large incumbent Thai real estate firms, but also where we will see the likely future impact of new foreign players to the Thai market place?
A. PACE has already cemented a strong position in the Thailand property market, through a consistent commitment to leading design, high quality, innovation and ultimately the kind of homes that any resident would be very proud to live in. The future for Thai business, not just real estate but across the board, is one of increased competition combined with growing sophistication from the consumer side; whereas 20 years ago land was plentiful and Bangkok was fast expanding outwards, now we are seeing the same trends as international developed markets. By this I mean we see gentrification of the truly prestigious neighbourhoods, an influx of inner city residents and increasingly, a growing number of internationally educated Thais and expats who have tastes based on what they see is available in London, New York or Hong Kong. So competition in the market place is growing, and at the same time consumers are better informed than ever before.
Q. So what is the best strategy for PACE – change or stay the same?
A. It’s both. For PACE, the current strategy of best developments in best locations should continue longterm – that is the strength of the company because PACE understands this end of the market better than almost any other Thai firms, proven through the prices and resale prices of the PACE properties in the market. So the goal should be to continue the vision of delivering design-driven, best quality developments in the high-end segment of the market. Easy to say, not so easy to execute, the focus must be evolving to stay ahead of the changing consumer landscape – to be able to read and forecast where the Thai market will go, and having first mover advantage in delivering properties which match those needs.
Handling competition is something that should be embraced, not resisted. Competition encourages innovation, maintaining delivery of superior value and gives a level playing field where the best companies can rise above their peers. It is my hope that in future, PACE will be recognised as the leader in luxury and high end real estate development and retail, not just in Thailand, but in the region. I see the real opportunity is in becoming a global player rather than only being in Thailand.
Q. What attracted you to PACE?
A. One of the main attractions here at PACE is a very passionate and hard working team. The CEO Sorapoj Techakraisri is dedicated, experienced, ambitious and representative of the new generation of business leaders who will take Thailand to the next level in development. He is supported by very able staff and managers, who, from what I have seen, are willing to push very hard to see new ideas come to the market.
That energy is what is needed in a competitive market place. I’m also impressed to see a commitment to proper corporate governance and company social responsibility; initiatives such as the PACE Learning Centre and support of charity at the MahaSamutr unveiling are examples of how PACE is also playing a positive role in the community.
Q. As Chairman, you are charged with maintaining the highest standards of corporate governance. From your experience as a Chairman and Director in a variety of industries, can you tell us more about how this actually occurs?
A. It starts with a mindset that good corporate governance is a longterm asset to be nurtured, not an obligation. Great companies, and there are many in Thailand, all share this mindset. Good governance is not just adherence to laws and controls for the organisation, but rather a desire at all levels to ensure that stakeholders are looked after in the best possible way via organisation decisions. The controls, checks and balances are means to ensure this, but the mindset of the directors, senior management and employees is key.
PACE has an experienced board of directors, and importantly there are strong independent directors. This links to a management team who are focused on generating long term shareholder value as well as looking after other relevant stakeholders at the same time. From an accounting perspective, the property business has a quite volatile profile, and there are big investments and costs to create a development, all of which must be done in the right way. The recent retail acquisition will help smooth that volatility.
From a customer perspective, their home is the largest asset they will likely ever purchase. From a community perspective, good design and legal compliance are vital to ensuring Thailand’s longterm development. There are many other aspects and impacts of governance, but most important at each step the right process ensures appropriate questions focusing on how to generate the best possible solution which leads to the revenues and the bottom line.
Q. Final question. What will the next 6 months bring for PACE?
A. We have our MahaNakhon development well underway, already at the 60th floor [at time of publication Nov 2014]. The retail CUBE at MahaNakhon is now open, delivering Bangkok’s best dining in a single location. Construction of MahaSamutr began last year, and is on schedule, and the management team will be picking the most appropriate time to start selling the Country Club memberships and the Villas in due course. I am also very excited to see Langsuan well into the planning stage with presales beginning within this year. Integrating the global brand of Dean & DeLuca into the business, and maximizing synergies between real estate and food & beverage will be an exciting challenge also.
Chairman Kraithip, thank you for your time.