By SOMLUCK SRIMALEE
PACE Development Corporation plans to spend a staggering Bt6 billion-Bt7 billion to buy land for future development and build condominiums this year.
Up to Bt5 billion will be used to develop two high-end residential projects – MahaNakhon and Mahasamutr.
MahaNakhon is a mix-used project that is scheduled to be completed and transferred to buyers this year, while Mahasamutr is a single family home estate in Hua Hin worth Bt3 billion.
Presales of Mahasamutr would start this year, Sorapoj Techhakraisri, chief executive officer, told a press conference yesterday.
About Bt1 billion-Bt2 billion would go to acquiring vacant land in Bangkok to develop residential projects next year.
This year, the company plans to launch only two projects – Mahasamutr and Nimit Langsuan, which is worth Bt7.5 billion.
Half of its capital expenditure budget will come from internal cashflow and half from banks.
The bank loans will boost the company’s debt-to-equity ratio from lower than 3 to higher than 3 this year.
However, the company’s raising of its registered capital from Bt2.05 billion to Bt3.19 billion this year would bring its debt-to-equity ratio back down to nearly 3.
The company expects revenue to reach Bt2 billion this year after MahaNakhon starts to turn its units over to customers in the last quarter.
This project has recorded presales of about 70 per cent of its Bt12 billion project value.
The company suffered a net loss of Bt345.09 million last year, of which Bt67.36 million was lost in the first nine months.
It targets presales of Bt3 billion-Bt4 billion this year thanks to strong demand for its latest luxury condo project, Nimit Langsuan, which is already 70-per-cent sold after bookings opened last week.
“This beat our estimate. We have to close our presales to adjust our condo prices in the next round,” he said.
Nimit Langsuan was offered at Bt260,000 per square metre. After positive feedback from the market, in only one week the price was increased to Bt300,000 per square metre.
The project has only 187 units, |of which five penthouses have already been sold. Construction |will commence at year-end and |will be completed in 2018.
The project is applying for approval of its environmental impact assessment and for a building permit.
About 90 per cent of Nimit Langsuan’s customers are Thai investors and the rest are foreigners from such places as Hong Kong, Singapore and Europe.
“This proves that demand for luxury residences is still strong if the project is designed to match with customer demand and is in the right location,” he said.
The company’s Bt13 billion backlog will be booked as revenue from this year to 2018.