Central Groups Form $2.3B JV for Super-Luxury Central Embassy

Central Group and Central Pattana Public Company Limited unveiled a historic joint venture plan for 'Central Embassy' to become a one-of-a-kind Super-luxury Mega Mixed-use Landmark in the city center, with a total investment value exceeding 83 billion baht, elevating Bangkok to a world-class metropolis.

The two companies announced a 51:49 joint venture investment plan to invest in the current Central Embassy shopping center project and the future new expansion (Central Embassy 2 on Witthayu Road and Soi Somkid, Bangkok) on prime freehold land with the highest potential in the city center, linking the two projects into one fully integrated Super-luxury Mixed-use Mega Landmark of world-class standard. The total project investment value exceeds 83 billion baht, comprising retail space, office buildings, and residences to strengthen the real estate business and expand the luxury portfolio for long-term investment returns. Details are as follows:

1. Investment structure under the joint venture company to develop a world-class mega mixed-use project - The joint venture company will purchase all shares from Hong Kong Land group companies in the Central Embassy 2 project, increasing the shareholding proportion in the project's development from 51% to 100%. - The joint venture company will invest in the 30-year long-term leasehold rights of the current Central Embassy project (the scope of the joint venture's investment does not include the Park Hyatt Bangkok hotel portion).

2. Strong capital structure combining real estate expertise and global luxury portfolio - This investment is part of Central Group's strategy to expand its luxury business portfolio, which operates luxury retail in more than 18 countries and 140 cities in Europe and worldwide, and is a global strategic partner of world-leading luxury brands with massive annual sales. Combined with Central Pattana's experience in developing and managing luxury shopping centers like Central Phuket, the two will jointly manage and develop a world-class project, elevating Thailand's mixed-use development to another level.

3. Investment in quality assets with appropriate value and conditions, generating good returns - Central Embassy is a luxury shopping center project that has operated for more than 12 years with profitable performance and consistently positive operating cash flow, maintaining an occupancy rate above 90%, revenue growth exceeding 10% per year over the past 5 years, and luxury brands accounting for more than 50% of rental income, reflecting asset quality and potential for long-term investment returns. - The joint venture considered the investment based on the potential of the prime freehold location in central Bangkok, combined with the agreed-upon share purchase price from Hong Kong Land group reflecting the project's cost basis for shareholders. - This investment has passed relevant consideration and approval processes, adhering to good governance principles and the appropriateness of investment value, returns, and benefits for the joint venture and shareholders. Additional project development details will be disclosed in the future.

With the vision of creating a world-class mega mixed-use Central Embassy project linking two buildings into one, the total project Gross Building Area (GBA) will reach 600,000 sq.m., with the current Central Embassy comprising 150,000 sq.m.