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Developers put off launches – Third-quarter results better than expected

The financial results of Thailand’s top 10 stock-exchange-listed property firms show continued growth in the third quarter of this year, despite a lengthy “quiet” period as home-buyers delayed the transfer of finished residences while waiting for the government to finalise its first-home stimulation scheme.

Meanwhile, developers have opted to delay the launch of some new residential projects that were earlier scheduled for later this year. With financial results running above estimates, they now plan to launch the delayed projects next year. They say they also have to investigate how “new rules” will impact their construction costs. These include the minimum daily wage rising to Bt300 and the possible reduction of corporate income tax from 30 per cent to 23 per cent next year and to 20 per cent in 2013.

Sansiri’s chief operating officer Wanchak Buranasiri said his company’s presales and revenue in the third quarter of this year were between 5- and 10-per-cent better than estimates. This is because market demand has grown beyond the company’s forecasts.

He said the market trends could lead Sansiri to delay the launch of some projects this year and begin them next year. The company has launched 12 new residential projects in the first nine months of this year. Originally, it planned to launch 23 projects in 2011.

One new project that Sansiri will launch in the last quarter of this year is a luxury condominium project on Wireless Road, for which it bought land at a price of Bt1.5 million per square wah (four square metres) earlier this year. The project will be developed in cooperation with luxury fashion and design brand Ralph Lauren, which will be responsible for the entire project’s interior design. The condominium will offer the most luxurious residences on Wireless road, Wanchak said.

Sansiri is aiming for presales worth Bt26 billion and total revenue of Bt20.5 billion in 2011. However, it believes the figures may be 5 or 10 per cent above its estimates.

LPN Development’s managing director Opas Sripayak said his company’s presales and revenue in the third quarter of this year had maintained growth over the third quarter of 2010.

“Some of our customers delayed their transfer process by waiting to see what the government’s policy would be. Others didn’t worry about this because they had already got a zero-per-cent interest rate for the first two years from the existing policy of the previous government,” he said.

Following third-quarter financial results that are better than its estimates, the company has decided to delay the launch of one new project at Bang Na from the last quarter of this year to next year.

“Our presales and revenue will be enough to drive our business growth in 2011,” Opas said.

LPN Development has revised downwards its presales target, from Bt16 billion to Bt15 billion this year, but the company’s total revenue appears certain to end the year 5- to 10-per-cent higher than in 2010, he said.

Pruksa Real Estate’s director and chief business officer Prasert Taedullayasatit said his company’s presales in the third quarter reached Bt26.4 billion – lower than its estimate of Bt30 billion because home-buyers had delayed their decisions to buy in the third quarter. However, the figure shows continued growth over 2010.

Pruksa continues to aim for presales of Bt42 billion and revenue of Bt30 billion in 2011.

Asian Property Development tells a similar story of continuing growth in presales and revenue.

“Although some customers delayed their decisions, most of them went ahead with purchases,” said senior vice president Pumipat Sinacharoen. “As a result, our presales and revenue will meet our targets.”

Meanwhile, more than 100,000 people visited the 25th House and Condo Show last weekend, and the home-buyers among them made purchases totalling more than Bt3 billion. As well as the financial results of property firms, the outcome of the four-day show illustrates the fact that the property market is continuing to grow

Source: The Nation

ThaiVest Editorial Team

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