Land & Houses Bank plans to spend Bt10 billion to acquire land and existing projects in Thailand and the United States while lining up 24 residential projects worth Bt43.29 billion for launching 2013.
The developer targets growth of 19.5% in sales to Bt30 billion 2013 after sales jumped 30.8 to Bt25.1 billion 2012.
More than half of the capital-expenditure budget, Bt7 billion, will be for land for development next year, while Bt2 billion will be for rental projects such as serviced apartments or retail centres in Bangkok and Bt1 billion for an apartment building in California.
To support its business plan this year, the company will likely issue three-year debentures worth Bt6 billion - half the issue this quarter and half in the third quarter. The coupon rate will not go over 4, he said.
L&H might float a property fund this or next year, if demand is better than expected.
"Our properties going into the fund are mixed-use Terminal 21, which combines retail and a luxury hotel, Centre Point on Wireless Road and Grande Centre Point Ratchadamri. They cost Bt9.9 billion," he said.
Under its financial plan, the company is confident that it can control its debt-to-equity ratio at only 0.9 time, slightly over the current 0.81.
Thailand Border provinces
L&H makes money in three ways - developing residences for sale, earning recurring income from rental properties such as serviced apartments, hotels and office buildings, and receiving dividends from its holdings in both listed and non-listed firms.
"Nearly half of our net profit comes from recurring income and dividends from our subsidiaries," said Naporn Soonthornjitcharoen, another senior executive vice president.
Of the 24 residential projects debuting this year, 10 will feature detached houses, 10 will be condominiums and four will be townhouse projects. Of the 24, 15 will be in Greater Bangkok and nine upcountry.
Two will be in Udon Thani and Chiang Rai because both provinces will be gateways to the Asean Economic Community(AEC)in 2015.
"We believe that demand for residences in border provinces especially Udon Thani and Chiang Rai has growth potential. Both provinces have facilities such as expressways, and the government also has a policy to invest in high-speed rail. This will support both provinces in becoming hubs for investment in the AEC," Naporn said.
The company uses prefabricated modules to build at least 2,500 units a year and signs long-term contracts with construction companies to reduce the risk of labour shortages in the real-estate industry, he said.
Read More: Thai Real Estate Association: Labour Shortage will Affect Thailand Property Market Seriously
Thailand Property Market Has No Bubble
The demand for Thailand residential projects is still real, not speculation. This is manifested by the registrations of 79,720 new residential units in the first 11 months of last year. Registrations for all of 2012 are projected at 89,000 units, up 44 from 61,728 units in 2011. That is still much lower than the peak of 146,735 units in 1995 during the real estate boom in Thailand before the financial crisis broke out in 1997.
Thailand Banks are also restricting both project loans and mortgages to prevent a real estate bubble forming as it did in the mid-1990s, Naporn said.