Aug. 09--Ticon Industrial Connection Plc, a SET-listed developer of ready-built factories and warehouses, expects rental revenue to fall below last year's level on effects from prolonged political instability and weak economic activity.
Managing director Virapan Pulges said revenue from rentals would drop slightly from last year after the poor conditions caused some companies to delay investments planned for the first half.
"Also, most of our clients are SMEs and part of the supply chain for the automotive and electronics sectors, which have slower growth compared with last year," he said.
"So they're waiting for large companies to expand before they do."
Ticon estimates a first-half net profit decline of 64% year-on-year to 149 million baht. It has cut its 2014 outlook for factory rental space to 70,000 square metres from 100,000 sq m.
Mr Virapan said improvement was likely in the second half as the country's political situation improves further and clearer investment policies are put in place.
But full-year revenue will depend on the amount of assets the company can sell to a real estate investment trust (REIT) to be created in October, he said.
"If the Securities and Exchange Commission approves the 5-billion-baht asset transfer to the REIT, there will be some revenue growth," Mr Virapan said.
"But if we're only able to transfer 4 billion baht worth, it will drop slightly from last year."
Ticon achieved 6.68 billion baht in revenue last year.
The company has maintained a capital budget of 8 billion baht this year for expansion of factories and warehouse space.
As of June 30, Ticon managed overall space of 2.1 million sq m.
Patan Somburanasin, managing director of Ticon Logistics Park, said warehouse rentals still grew satisfactorily despite the weak economy in the first half, buoyed by rising purchasing power upcountry.
Rising demand spurred convenience stores and hypermarkets to set up regional warehouses.
TICON shares closed yesterday on the SET at 17.70 baht, down 40 satang, in trade worth 156 million baht.
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