Lombard reaps 7.1x returns for mall developer

The firm has exited Thailand's Central Pattana after eight years and generated $170m in the process.

Lombard Investments, one of a handful of firms actively engaged in Thailand, has once again demonstrated the potential of the Southeast Asian kingdom, reaping 7.1x returns on a $24 million investment in Thai shopping mall developer Central Pattana.

The firm generated $170 million in returns on the deal through an overnight placement  to Thai and international investors managed by Credit Suisse Group, it said in a statement.

Lombard invested in Central Pattana in 2003 and worked with the controlling family to implement the turnaround of CentralWorld Plaza, then Thailand’s largest financially troubled shopping mall, the statement said.

Central Pattana manages a portfolio of sixteen shopping malls, six office buildings, two hotels, and two residential projects. The company is also developing four additional shopping malls in Thailand, one in Bangkok and three in provincial markets to be opened in 2011-2013, and is expanding offshore.

In August last year, Lombard achieved similar multiples on its investment in Pruksa Real Estate when it diluted its holdings to overseas and local institutional investors in order to increase the stock's liquidity. Specific figures of that deal were not disclosed.

Founded in 1985, Lombard has invested in more than 90 deals in Asia and North America. In March the firm sold its 23 percent stake in Thai paper packaging company S.Pack & Print, which it acquired in 2003, and although financial terms of the deal were not disclosed, the sale was expected to generate a 3.5x return for the firm.

Thailand was once an attractive destination for foreign dealhunters looking to expand their Asian portfolio, but the Asian Financial Crisis and, more recently, political turmoil had caused the country to lose some of its lustre in the eyes of these investors.

“For the last five years, Thai politics has captured headlines globally while the underlying strength of the economy has been underreported. Despite political uncertainties in 2010, Thailand’s economy still grew at a nearly 8 percent rate, and the stock market was one of the best performing in Asia,” Pote Videt, managing director at Lombard, recently told PERE's sister publication PE Asia.