Rung Pattana braces for demand

Rung Pattana Property plans to launch three or four new property projects worth between Bt2 billion and Bt2.5 billion a year from now, when it expects to see strong demand in the market.

“We believe that demand for home-office and town-home projects in eastern Bangkok will continue to grow. As a result, we have an aggressive investment plan to launch new property projects in the area, including Romklow Road and Suwinthawong Road,” said the company’s managing director, Visit Kittiudom.

The company has set aside an investment budget of between Bt100 million and Bt300 million to buy a land with which to develop three or four new projects a year, he said.

Currently, the company has a land bank of 46 rai; 20 rai of that is located at Hatairat in Minburi district, and the remainder on Suwinthawong Road. Both areas are slated for residential projects in the next year.

The company also plans to buy undeveloped land to develop residential projects in the next year.

This year, the company plans to launch four new property projects worth Bt2.75 billion. Last week saw the launch of the Bt950-million RK Biz Centre, a home-office project with just 177 units. Also due to launch this quarter is the Bt650-million RK Office Park at Ramindra-Ramkhamhaeng. The next two projects, due to launch in the third and fourth quarters of this year, are RK Office Park on Shathairat Road and RK Office Park at Kubon, worth Bt700 million and Bt450 million, respectively.

Most of its investment budget comes from the company’s cash flow, Visit said.

“We have made a huge expansion in our investments for this year and next, because we see business opportunities and demand in the market,” he said.

Visit said that the recent 5- to 10-per-cent increase in the price of construction raw materials had not impacted the company’s construction costs, because the company has signed long-term materials purchase contracts to help manage costs. The firm’s return on investment averages between 10 and 15 per cent, he said.

“Our business risk is controlled using cash-flow management. When we succeed in selling out property projects, we use that cash, rather than borrow from banks, to reduce risk,” he said.

The country’s economic and political situations also represent business risks, but are out of the firm’s control. The company can manage its cash flow, however, in such a way that helps it survive, he said.

Rung Pattana Property is a property firm with origins in the construction business. It has more than 10 years experience in developing residential projects, especially home-office projects in eastern Bangkok under the Rung Kit brand.

The company now has three subsidiaries focusing on different types of residential projects. They include RK Housing and Space Co, with registered capital of Bt5 million, which develops home-office projects. Rungkit Real Estate Co, which has registered capital of Bt50 million, develops single-detached housing projects. RK Office Co, a developer of home-office and town-home projects, has a registered capital of Bt50 million.

SOURCE: The Nation