Supalai Optimistic On Middle Market Development
Supalai continues to be buoyant about the property market in 2009 and plans to launch 12 housing projects in 2009 with a market value of almost Bt16 billion, its president, Prateep Tangmatitham, said.
"Though Thailand's economy will get a pessimistic impact from the global financial crisis in 2009, I believe that local demand for housing property will continue to develop as some economic factors are helping home purchasers to save their money. These take in lower interest rates, a drop in construction expenses and the government's tax incentives for home purchasers," he said.
On the other hand, Supalai will modify its product mix by raising its number of low-rise projects. Currently, the company makes 68% of its revenue from condominium projects and 32% from low-rise projects, together with town houses and detached houses. In 2009, the percentages will change to 50% from each.
Prateep said the company had to alter its product mix for the reason of the construction procedure and market command. When building condominiums, the construction period takes 1 ½ - 2 years, which means the company has to bring in money into a project for that time prior to expecting any returns.
Detached houses or townhouses, in contrast, take approximately 6-8 months to build and are producing income much more quickly.
As a result, eight of Supalai's 12 new housing projects in 2009 will be detached houses and townhouses and just 4 will be condominiums.
The company will also reduce on the total money it will spend in 2009 to purchase undeveloped land, from its normal budget of Bt3 billion to approximately Bt2 billion, as it now holds 7 undeveloped plots in Bangkok - enough for new housing projects until 2011.
The company also has a excess of housing units of value Bt14.9 billion which are presold and waiting for the end of construction ahead of being handed over to consumers. Of this amount, Bt1.5 billion will booked to the company's revenue before the end of 2008.
The company also has an account of housing properties of value Bt11.8 billion that it look forward to sell over the coming three years. This will be enough to uphold Supalai's business growth in 2009.
"Though Thailand's economy will get a pessimistic impact from the global financial crisis in 2009, I believe that local demand for housing property will continue to develop as some economic factors are helping home purchasers to save their money. These take in lower interest rates, a drop in construction expenses and the government's tax incentives for home purchasers," he said.
On the other hand, Supalai will modify its product mix by raising its number of low-rise projects. Currently, the company makes 68% of its revenue from condominium projects and 32% from low-rise projects, together with town houses and detached houses. In 2009, the percentages will change to 50% from each.
Prateep said the company had to alter its product mix for the reason of the construction procedure and market command. When building condominiums, the construction period takes 1 ½ - 2 years, which means the company has to bring in money into a project for that time prior to expecting any returns.
Detached houses or townhouses, in contrast, take approximately 6-8 months to build and are producing income much more quickly.
As a result, eight of Supalai's 12 new housing projects in 2009 will be detached houses and townhouses and just 4 will be condominiums.
The company will also reduce on the total money it will spend in 2009 to purchase undeveloped land, from its normal budget of Bt3 billion to approximately Bt2 billion, as it now holds 7 undeveloped plots in Bangkok - enough for new housing projects until 2011.
The company also has a excess of housing units of value Bt14.9 billion which are presold and waiting for the end of construction ahead of being handed over to consumers. Of this amount, Bt1.5 billion will booked to the company's revenue before the end of 2008.
The company also has an account of housing properties of value Bt11.8 billion that it look forward to sell over the coming three years. This will be enough to uphold Supalai's business growth in 2009.
Labels: condominium projects, housing property, property market
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