Residential property market

Big spending in preparation for 2010Economic recovery leads to Bt100|billion splurge on|land and infrastructure

Thailand’s leading property developers are preparing to spend more than Bt100 billion in readiness for a fully recovered property market next year.

For example, Sansiri plans to spend Bt17.5 billion to buy 30 plots of land and expects to develop 18 residential projects next year.

LPN Development says it will invest between Bt2 billion and Bt3 billion to develop residential projects with a market value between Bt8 billion and Bt10 billion in 2010, while Quality Houses has set aside Bt3.2 billion to buy undeveloped land in the final months of this year and in 2010. It plans to develop 13 new residential projects next year worth Bt15.61 billion.

Supalai is planning to invest between Bt2 billion and Bt3 billion to buy land for new residential projects in 2010, and Preuksa Real Estate says it will spend between Bt3 billion and Bt5 billion to prepare for the coming year.

Quality Houses president and CEO Rutt Phanijphand said his company would spend Bt700 million to buy land before the end of this year, and the rest of its land-buying budget, totalling Bt3.2 billion, would be spent in 2010.

The company believes the economy will recover and the political situation will be stable next year, so it has plans for the aggressive marketing of 13 new residential projects, worth Bt15.61 billion, in 2010, he said.

“We expect sales growth of 10-15 per cent next year, compared to our revenue target of Bt10 billion this year, because two condominium projects will be complete and ready to transfer to customers in 2010. That will generate revenue of Bt6 billion,” he said.

Sansiri president Srettha Thavisin said that after doubling its registered capital, his company would spend Bt8.5 billion to buy land. Another Bt9 billion will be spent on infrastructure for 18 new projects with a combined market value of Bt22 billion.

This will drive the company’s revenue to Bt50 billion by 2014. It is expected to grow by 10-15 per cent next year, 27 per cent in 2011, 29 per cent in 2012 and 25 per cent on average in 2013 and 2014.

The company is also studying opportunities in New York, Vietnam and the United Kingdom, after expanding into international markets with the Bt600-million purchase of a condominium in London this year.

“We may start by investing in Vietnam in the third quarter of next year,” Srettha said.

The company is preparing for big investments next year because it believes business opportunities will arise when the economy recovers.

“We are concerned only about political problems. If the country’s politics are stable, we believe the economy will recover strongly,” he said.

LPN Development managing director Opas Sripayak said his company believed the economy would recover in the final quarter of this year and early next year. LPN is consequently planning to expand its investments next year and has forecast stable growth of 10-15 per cent in 2010.

SOURCE: The Nation