Thailand leading property developer Pruksa Real Estate has raised this year's revenue target from Bt33.97 billion to more than Bt40 billion thanks to strongly growing demand in the property market in the first half.
The company has set aside an investment budget of Bt2.5 billion for the current third quarter to build three new prefabrication plants in Rangsit near Navanakorn Industrial Estate Pathum Thani. The new plants will have enough monthly production capacity for 450 detached houses with usable space of about 150 square metres each. This will increase its house-construction capacity to 1,100 a month, up from 650 a month from its five existing prefab plants at Klong 5, Pathum Thani.
The three new plants will start operating next August, chief executive officer Thongma Vijitpongpun said. As a result, the business cycle from sale to transfer would be reduced from the current 148 days.
"Although the economy shows signs of slow growth in the second half, that will have little impact on the property sector because the demand for homes is real," he said.
Pruksa estimates that the property market in Greater Bangkok will grow by 7-10% in the current half, contributing to full-year growth of about 10% to more than Bt325 billion. Up to Bt51.4 billion worth will be townhouses, Bt77.9 billion detached houses, and Bt196.4 billion condominiums.
"We target our share to be at least 13% of the total market value in Bangkok and its suburbs," he said.
13% of total presale value
As of the end of the first half of 2013, the company recorded presales worth Bt22.67 billion, or 13% of the market's total presale value of Bt172.49 billion. In the same period last year, its market share was only 9%.
Pruksa also recorded revenue of Bt15.33 billion in the first half of 2013, up 33.9%, and net profit of Bt2.18 billion, up 33%.
The company's customers have a mortgage-rejection rate of 25%, but Thongma said 7% cancel their own applications, and only 18% are actually turned down by the commercial banks. In those cases, Pruksa tries to negotiate with the banks to find a solution.
He added that the government should help prospective home-buyers get mortgages, such as with loan guarantees like those for small and medium-sized businesses under the Thai Credit Guarantee Corporation.
Pruksa has a deal with Thanachart Bank on easing mortgage applications and is also negotiating with other banks to do the same, the company's chief operating officer Lersak Chuladesa said.
- Residential Rents for Expatriates in Bangkok is Expected to Increase
- Certain Buyers Left Dissatisfaction as Thai Developers Fail to obtain EIA Approval
- Rates of Housing Units increases to 48% during 4 Years
- Developers welcome the ideas of Finance Ministry to Tax the Vacant and New Land
- No Risk of Property Bubble in Thailand