Goldman and Apollo Team Up for $235M Investment in Thailand’s Tallest Tower

While Vietnam and the Philippines may be the southeast Asian markets getting the most attention from real estate investors this year, Goldman Sachs and Apollo Global Management have headed to Bangkok for a $235 million investment in a project that includes Thailand’s tallest building.

The investment bank and the private equity heavyweight are investing $216 million in equity and $18.8 million in financing in return for a 49 percent stake in a pair of companies that are developing the hotel and retail portion of the 77-storey MahaNakhon Tower and the adjacent MahaNakhon Retail Cube.

The project between Sathorn and Silom Roads in Bangkok’s traditional banking district is being developed by local builder Pace Development Corporation Public Company Limited, which announced the investment to the Stock Exchange of Thailand earlier this week.

Pace Gets Help to Complete Mixed-Use Complex

Under the terms of the agreement revealed to the stock exchange, Apollo subsidiary Apollo Asia Sprint Holding Company Limited invested $165 million in the deal, with Goldman Sachs Investments Holdings (Asia) Limited contributing $70 million to the Ole Scheeren-designed pixellated complex.

Pace’s MahaNakhon complex includes a 154-room Ritz-Carlton managed hotel, 209 luxury residential units, and 10,000 square metres of retail space. The 314 metre high tower was officially completed last year, with work ongoing on the adjacent seven-storey retail building.

In its statement, Pace indicated that the investment from Apollo and Goldman would be used to complete the MahaNakhon complex and to repay existing loans. The transaction is expected to close in February of this year.

Pace Hopeful of More Projects with Apollo

Once a global investment hotspot, Thailand has struggled to regain the attention of international investors following years of political turmoil and tepid economic performance. In 2014 the country’s economy grew at just 0.7 percent following floods that damaged the manufacturing industry, but conditions have improved with the Bank of Thailand estimating 3.2 percent GDP growth in 2016 with the same predicted for 2017.

In an interview with the Bangkok Post, Pace CEO Sorapoj Techakraisri sounded optimistic about the potential for future opportunities with Apollo. “We are eyeing a long-term partnership with Apollo as it has a head office in New York,” Sorapoj said.

Pace plans to launch sales of at least two new residential projects this year according to the Bangkok Post account, with Sorapoj saying that the company will look to replenish its land bank once the investment from Apollo and Goldman is completed.