Noble lays down tracks for Bt30 bn goal in BTS focus

The investment budget is planned to help underpin a goal of pulling in revenue of Bt30 billion over three years by targeting more Chinese buyers.
 “There are currently five projects in the pipeline that will be launched in 2019, with a total sales value of Bt15 billion,” Thongchai Busrapan, chairman, co-chief executive and president of Noble Development, said at a press conference yesterday.
Under the three-year revenue target, the company aims to boost its take by Bt10 billion for each of those years. This would mark a doubling of last year’s total revenue of around Bt5 billion.
The firm also plans to increase its return on equity from last year’s 15 per cent to 32 per cent in the next three years, while maintaining its profit margin at around 20 per cent. 
These goals were set by Noble’s new management team, which was formed after a recent shake-up in the shareholding structure.
The company’s major shareholders include Thongchai, who holds 23.3 per cent of the shares, and Fulcrum Global Capital, which is wholly owned by Frank Leung, and has a 24.9 per cent stake in the company through nCrowne Pte. Ltd. BTS Group Holdings Plc has a holding of 9.9 per cent.
Thongchai said that given BTS Group Holdings’ involvement, there is the potential for future cooperation on projects with BTS. However, he did not reveal any concrete projects for such cooperation.
 
Frank Leung, vice chairman and co-CEO of Noble, said: “To achieve this revenue goal, Noble is aiming to target more foreign customers, particularly from mainland China.”
According to research by CBRE, Chinese make up the biggest source of foreign buyers of property in Thailand. The research suggests that purchases by Chinese accounted for up to 30 per cent of the total in 2018.
In 2018, Noble’s share of the overseas market for Bangkok condominiums stood at only 8 per cent. This has increased to 28 per cent in the first quarter of 2019.
 “In the span of only two years, mainland Chinese buyers have overtaken buyers from Singapore and Hong Kong as the main driver of growth in Bangkok’s overseas property market,” Leung said. “Our goal is to continue to build on this progress and further target the growing overseas market of Chinese buyers.”
To do so, Noble will aggressively focus on realigning its product mix, which includes expanding its land acquisition locations further from the central business district and diversifying its portfolio. 
Thongchai said the expansion of the BTS network to the north of Bangkok presented potential locations for Noble’s upcoming projects.
“Chinese buyers are looking to invest in the long-term,” Thongchai said. “They understand that land plots that are one hour or less away from the city centre can grow in value quickly as the BTS lines expand. Hence, land plots along the new BTS lines going up into the north of Bangkok are a potential location for the future.”
This thinking is behind the Bt3 billion investment budget for land acquisition in 2019. Thongchai said the company would maintain this outlay each year.
To help reach its ambitious target revenue of Bt10 billion a year, Noble will divest itself of some assets to generate immediate funds. It has entered into a sale and leaseback transaction for Noble Pleonchit Tower D, which will free up cash for redeployment, Leung said.