[Tommychrk]

The operator of the Jungceylon shopping complex in Phuket will borrow 2.6 billion baht from Kasikornbank and Bank of Ayudhya to further expand its shopping complex and hotel at Patong Beach. Phuket Square Co is scheduled to sign the loan deal with the two banks today.

About one-third of the loan proceeds will be used to renovate and adjust some internal store designs, a company executive said. The remaining funds will be spent to complete two wings on the Millennium Resort Phuket, due to open sometime this year. The six-storey, five-star hotel will have 435 rooms.

Kasikornbank and Bank of Ayudhya will each provide half of the loan to Phuket Square with a repayment term of five to six years. Phuket Square will use its shopping complex as collateral.

A source from one of the banks said that it decided to back Phuket Square because it saw huge potential for the shopping complex, which is the largest retail centre on Patong Beach, with a five-star hotel.

Prawit Janyasittikul, Phuket Square's deputy chief executive officer, said Jungceylon had received a warm response from shoppers in its first three weeks.

''We have been very happy to see more than 10,000 shoppers visiting our stores each day,'' he said.

About 90% of the 75,000 square metres at Jungceylon have been leased and all tenants plan to open by next month.

According to Kasikorn Research Center and the Tourism Authority of Thailand, tourism businesses in tsunami-hit provinces such as Phuket and Phangnga have been improving, driven by marketing activities arranged by the private sector and the government.

''The expansion of a lot of new hotels and villas for sale developed by both local and overseas investors has lifted Phuket's reputation among foreign tourists, as well as the expansion of low-cost airlines and direct flights to Phuket,'' added Mr Prawit.

According to CB Richard Ellis Thailand, a property consulting firm, tourist arrivals in Phuket rose by 60% year-on-year from August 2005 to August 2006, according to the latest data available.

Kasikorn Research Center expects that the number of tourists in Phuket this year will increase by 11% to 5.2 million, while the income from tourism will also rise by 19% to 74 billion baht.

Tourism in Phuket recovered last year with the number of tourists increasing by 87% to 4.7 million people. Income rose 120% to 62 billion baht.