The Company engages in development and management of industrial properties which are Ready-Built Factory and Ready-Built Warehouse, with a strategic direction to pursue more development in Built-to-Suit Industrial property in order to cater for larger client base in accordance with its announcement of “Total Dimension” 3-year business roadmap underneath the transformation strategy to strengthen and enhance capability to compete in the long run, and stepping up to a leading provider of smart industrial platform. The Company has a plan to develop industrial property along with becoming total solution provider to drive for business sustainability. TICON is ready to move forward and promptly collaborate with strategic partnership to enhance its latency through a group network to create new revenue stream in order to add value to its core business. The Company actively focus on new growth over new business segment to meet customer’s demand in the Industry 4.0 business environment. TICON Group structure comprises 3 businesses;
Business Overview
The Company provides integrated development of industrial properties with a strong portfolio of factory and warehouse of over 2.7 million square meters under management in strategic locations nationwide. Factory and warehouse offered by TICON are both in Ready-Built and Built-to-Suit type by targeting to escalate Built-to-Suit development project. The Company’s factories and warehouses are located in strategic locations under various industrial estates, industrial parks, industrial promotion zones, logistic parks, and free-trade zones of Thailand.
Business Operations by Product Types
The Company develops Ready-Built Factory of international standard in order to facilitate demand of manufacturers and companies who want to set up a business in Thailand but do not want to own the factories in order to reduce investment cost and preserve business flexibility. The Company develops factories in many strategic locations of Thailand that can cater for manufacturers of different industries. The Company also provides other services related to setting up a business in Thailand since more than 90% of tenants are foreign companies.
The Company chooses locations of the factories based on demand of existing tenants as well as potential market demand in the near future. The Company also considers other factors when determining the locations including benefits under promotional zones, accessibility to international ports and airports, proximity to Bangkok as well as quality of infrastructure of industrial estates and/or industrial parks.
The Company develops factories in Export Processing Zone, General Industrial Zone as well as other areas as required by the tenants. The demand from tenants can be specific, for example manufacturer who wants factories in Export Processing Zone would also prefer to be within proximity of deep sea port.
Factories of the Company is a single storey building with mezzanine office, proper fencing and landscaping, and with attached guard house, parking spaces and truck loading area. The factories are of international quality and can be customized to the tenants’ specific requirement. The sizes range from 550 sqm. to 12,000 sqm. Typical sizes of the factories have been smaller over the years given rising demand of tenants with smaller-sized business operations. The factories have 1 - 3 tons floor load and is built on steel portal frame which does not require support from structural columns and hence provides more useable areas.
Leases between the Company and tenants are largely within 3 years. The Company will approach tenants for renewal closer to expiry date. Tenants also have an option to re-locate to other factory locations offer by the Company or rent factories of other sizes.
The Company also develops Built-to-Suit factories for tenants who want customized designs. Such tenancy is beneficial to the Company as the rental period is longer at around 5 - 10 years.
The occupancy rate of TICON’s factory at September 2018 was 57%, higher than 51% as at 2017. Demand of factories have been driven by medium-size tenants under electronics industry, automotive industry and consumer products. The popularity of factories in-demand locates in Eastern Economic Corridor (EEC).
The Company’s wholly owned subsidiary TICON Logistics Park Co., Ltd. (“TPARK”) is a leading developer in ready-built warehouses of international quality. Logistics is an essential business to distribute goods and supplies to other parts of the country and is a key to develop Thailand to become ASEAN hub. Presently, majority of logistics providers prefer to invest in technological software and logistics system. This creates an ideal opportunity for the Company to lease warehouses to these logistics providers.
The Company’s warehouses are located in strategic locations that are ideal to be distribution centers. The warehouses are designed to suit modern logistics management systems, with clear heights, wide column spans, dock levelers, and sufficient floor loads.
Typically, warehouse leases are around 3 years with option to renew. Going forward, the Company expects more contribution of Built-to-Suit warehouses which has leases of more than 3 years. The average term of Built-to-Suit contracts is 10 years. The Company also offers Sale and Leaseback option for its customers.
The Company develops industrial property of which its design meet customer’s requirement by focusing on the usage of each business operator in different industry. In addition, Built-to-Suit project could maximize factory and warehouse efficiency includes cost saving and to enhance productivity of business production as well as warehouse storage. TICON has a strategic location where ready to develop Built-to-Suit project under industrial estates, industrial parks, industrial promotion zones and others zone in Thailand. Built-to-Suit project has a long-term contract between 10 to 15 years which positively affect occupancy rate in terms of driving a sustain revenue whilst reduce expense and advertisement cost.
During the year of 2018, TICON sold investment property by delivering Built-to-Suit warehouse which built in strategic location to customer, the project as such could grab attention and spotlight TICON’s customers. Besides, TICON has Built-to-Suit project in pipeline for further development.
The Company has a policy to invest in real estate investment trust for not less than 20% of total investment units to receive recurring investment return which is in a form of annual dividend payment. In addition, the Company is also a property manager that manages property assets owned by TREIT. This provides another source of stable income to the Company in a form of property management fees.
The Company operates and manages real estate investment trust TREIT through its 70% owned subsidiary, TICON Management Co., Ltd. (TMAN). TICON converted 3 property funds; TFUND, TLOGIS and TGROWTH into TREIT on 28 December 2017. Additionally, TREIT acquired assets from TICON of 79,106 square meters, TREIT has become the largest industrial real estate investment trust in Thailand with total assets value of more than Baht 32 billion. TMAN, as a REIT Manager, receives management fee on annual basis and pays dividend to the Company.
The Company has an in-house design team, project development team and project management team. The Company is well positioned to assist customers in design and modification work of factory/warehouse as required by the customers.
The Company provides assistance to customers to procure utility services and other related assistance, as appropriate.
The Company provides assistance to customers to obtain relevant permits and approvals necessary to commence manufacturing operations swiftly such as operation permit. Moreover, the Company also assists the customers to procure work permits for any of their foreign employees and this is deemed as one-stop service to customers from other countries
As the Company has been in the business for a long time and has good relationship with many business partners in different industrial sectors, the Company is in a unique position to provide other relevant services to the customers e.g. introducing suppliers or potential employees to the customers.
Business Overview
Thailand has great potential in the race to digital transformation as demand for data center services grow, which stands at the frontiers of progress towards advanced stages of digitization, in conjunction with broadband technology, cloud computing, big data analytics and internet of things. Under the Thailand 4.0 national agenda, the Thai government has envisioned an economic model aimed at achieving advanced levels of digitization and fostering an incremental economic growth through a masterplan 2017-2021 that focuses on strategic ICT investments to drive the widespread adoption and usage of digital technology.
While the state of Thailand’s broadband infrastructure remains competitive, the country is thriving on other spheres of technology drivers especially the adoption of big data analytics to harness data streams from different sources, run analytics and getting significant value-add to the business from efficient information management. In an attempt to address these challenges, next level evolvement is gearing towards exploiting data center technology as a crucial IT infrastructure underlying the success of 4.0 industrialization era with an enhanced capability for entrepreneur to integrate real-time information and capture insights to win a competitive edge. In 2018, TICON made a preemptive move into the data center market via a strategic partnership with ST Telemedia Global Data Centres (STT GDC), a leading data center service provider headquartered in Singapore with global expertise and knowhow in data centre design, build and operations while meeting international standards and the demands of its customers.
Business Operations by Product Types
Data center colocation services are deployed within a data center facility, providing shared rental space for organizations to bring in network servers and other computing hardware. A data center operator must ensure uninterrupted operations at its facilities, including providing power back-up systems to avoid downtimes in the event of power outages. In addition, they provide cooling equipment to maintain specific temperature conditions to prevent overheating of the servers.
Data center development projects must consider location and infrastructure support, supported by a pool of technical experts to ensure optimal design and security. The ability to scale up is also a crucial feature to cater to customers’ requirements in the evolving digital marketplace.
As technology and internet activity continues to develop rapidly, data centers play an increasingly significant role in centering storage and connectivity. Emerging technology over the last few years has enabled data centers to take advantage of the better performance and energy efficiencies of newer and smaller IT equipment.
Business Overview
Smart solution is a new business venture utilizing advanced technology to enhance value proposition from multi-service integration and connectivity co-created by a strategic partnership’s sharing of resources, customer base, proprietary knowhow and expertise. Currently, there is a growing trend toward mixed-use development at the intersection of real estate, technology and community, which fosters combination of integrated features with modernized application to address changing lifestyles of new generation consumers. Fully embracing digital technology to optimize business solutions, TICON has taken further step to expand portfolio via strategic partnering setup of its new joint venture with JustCo, Southeast Asia’s largest premium co-working space provider specialized in data analytics, smart workplace technology and powerful CRM with enlarged customer base in regional countries.
Business Operations by Product Types
Co-working business provides rental service for a shared workplace, often an office that differs from a traditional commercial lease space usually employed by small organizations, with key distinctions in functionality and aesthetic design principle that allows for flexibility and scalability alongside high quality amenities to cater for variety of needs across all organizations. Co-working space is designed to accommodate a range of possible alternative uses, offering customer the ability to rent out only what you need either private meeting rooms or a suite of office-like amenities such as a dedicated desk, or ‘hot-desks’ which refer to a shared desk for on-demand uses by tenants with flexible working hours to maximize space efficiency.
Co-working is the new path of melding life and work in a sustainable fashion. Many of the benefits provided by an innovative fully-furnished facility includes shared common areas offering recreation space and café with barista, giving a sense of community under an entertaining and refreshing atmosphere to cater for the new generation lifestyles. The co-working environment is conductive to the truly organic collaboration and conversations, encouraging interaction and networking with new people to exchange ideas and expand business leads, as co-working spaces often run a variety of community events, workshops, and seminars for their members through branched co-working offices readily accessible for privilege member services which greatly superseding the typical serviced office model.
Through the strategic partnership with JustCo, the Company has launched its first co-working service facility located at the edge of Bangkok’s central business district, AIA Sathorn Tower with a combined space of 3,200 square meters. spreading over two storeys, followed by the second venue across 3,500 square meters occupying three levels of the Capital Tower at All Seasons Place.