Bangkok: The State Railway of Thailand (SRT) board has approved a 30-year lease extension for Central Ladprao on Nakhon Ratchasima land, which is valued at over 33 billion baht. Mr. Anan Pothinimdaeng, Deputy Governor and Acting Governor of SRT, revealed that the SRT Board of Directors meeting approved the results of negotiations for the lease of a 47.22-rai (approximately 7.8 hectares) plot of land in the Phahonyothin Triangle area. This land will be used for the Central Ladprao shopping center, with Central Inter Development Co., Ltd., as proposed by its subsidiary, SRT Asset Co., Ltd. (SRTA). The new contract will last from December 19, 2028, to December 18, 2058, with SRT receiving a total return of over 33,000 million baht throughout the contract period.
According to Thai News Agency, Central Group has proposed an additional investment of at least 4.5 billion baht for renovating the existing building and updating related systems, such as electrical, ventilation, communication, sanitary, and fire suppression systems, which have been in use for nearly 50 years. The renovations will also include modifications for enhanced earthquake resistance, with a plan to complete these updates within 4 years from the start of the contract.
Previously, the SRT board tasked a subcommittee with overseeing and reviewing the management of SRT's assets to ensure the accuracy of the negotiation results. After reaching a decision, they will scrutinize the accompanying documents and opinions. This process is expected to take approximately two months, with the new contract expected to be signed by March 2026. The signing will include two parts: a land lease agreement between SRT and SRTA, and a contract between SRTA and Central Group.
The revenue that SRT will receive from SRTA will be in the form of land lease fees, calculated at Net Present Value (NPV) based on the project's current value, totaling 33 billion baht over 30 years, payable annually. SRTA will manage the leased land through a contract with Central Group, generating revenue exceeding 33 billion baht, which SRTA will receive as the difference.
Mr. Anan stated that after Central's current lease expires in December 2028, the entire building will become the property of the State Railway of Thailand (SRT), valued at approximately 7.6 billion baht. Calculating the return on investment for SRTA to further develop the property, he believes it will be at least one times the initial investment, given the high potential of the area. The original 20-year lease yielded approximately 21 billion baht, while the new 30-year lease increases the value to approximately 33 billion baht, an amount considered appropriate for the extended lease term.