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Thai Realty Growth Continues Despite Political Conflict Featured

The Thailand political conflict has not yet thrown a wet blanket on the real estate industry as residential demand is still sizzling, according to Pruksa Real Estate Plc.

"The property market continues to grow at 5% in the last quarter of this year thanks to the high demand in the market in the first nine months," Thongma Vijitpongpun, CEO of the leading residential developer, said.

However, if the political unrest tends to take a long time and affects the economy, that will have an impact on the market next year, he said.

"We have to take time to forecast and set our strategy for next year by monitoring the country's political situation for whether it will be a short-term or long-term conflict. If long term that will impact our business estimates for next year. If not, we will maintain our growth. Right now we cannot say what our business plan will be next year," he said.

However, the company is studying issuing debentures worth Bt6 billion-Bt7 billion next year to prepare for expansion, said Edward Cooper, chief financial and risk officer.

The company aims to maintain financial sustainability and control its cost of funds at not over 4%. Its cost of funds is presently only 3.7% - lower than other property firms in the market.

The company has revised its presales target for this year from Bt35.42 billion to Bt39 billion-Bt41 billion and its revenue target from Bt33.97 billion to Bt36 billion-Bt37 billion after realising presales of Bt36.92 billion in the first 10 months and revenue of Bt25.26 billion in the first nine months, which is up 35% from the same period of last year.

Net profit

The company's net profit also leapt 34% to Bt3.5 billion in the first nine months.

The company lowered its new residential project launch target for this year from 78 projects worth Bt55 bil?lion to 50-55 projects worth Bt48 billion- Bt50 billion because its presales were better than expected.

Following its aggressive growth in the first nine months, the company raised its share of the Greater Bangkok market worth Bt254.53 billion in the first nine months from 9% last year to 13%.

"We target the property market in Greater Bangkok to reach Bt330 billion this year and Bt290 billion in the provinces," he said.

Pruksa has continued to focus on Greater Bangkok as demand is still stronger than upcountry. Outside the metropolitan area, the company will focus on main centres such as Chiang Mai, Phuket, Pattaya and Chon Buri. The company also is studying developing residential projects in Surat Thani.

"Our projects in the provinces will be low-rise residences including single family homes and townhouses rather than condominiums," he said.

Overseas, the company will delay its investment in Indonesia out of concern over the global economic uncertainty from quantitative easing.

This will impact that country's currency, he added.

Last modified onTuesday, 26 November 2013 22:18
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