SC Asset in talks for joint venture

"This will facilitate our growth averaging 20 per cent a year to revenue of Bt20 billion by 2019," chief executive officer Nuttaphong Kunakornwong told the press launch yesterday of its latest luxury condominium, Saladaeng One, worth Bt4.7 billion.

He declined to disclose the name of the firm in an Asian country but said it was an expert in the property industry and would help develop SC Asset’s business in the long term.

SC Asset does not plan to expand overseas at this time because there are still foreign-exchange and legal risks, although the Bank of Thailand is relaxing rules for investment overseas, he said.

"We will focus on Thailand. Demand for homes is still strong, especially in the luxury market at prices over Bt10 million for both detached houses and condominiums," he said.

In the first four months of this year, the company doubled presales to Bt3.5 billion from the same period of last year. About 40 per cent of the total was for luxury homes.

In the first quarter, the company increased revenue by 33 per cent to Bt2.07 billion and net profit by 79.5 per cent to Bt159.73 million from the same quarter of last year.

Although rising household debt continues to dent demand for homes costing less than Bt10 million, the luxury market is still booming.

For example, the company succeeded in selling Saladaeng One worth Bt900 million after introducing the project to its customers last week before it opens booking to the public on May 23.

This shows that demand for luxury homes is still strong from both foreign and domestic buyers. Up to 70 per cent of its customer target for Saladaeng One, which offers units starting at Bt13 million, or Bt310,000 per square metre, is domestic, with the remaining 30 per cent foreign.

"When the baht weakened, that challenged foreign buyers to expand their investment in residential projects in Thailand," Nuttaphong said.

All of its foreign buyers are from mainland China, Hong Kong, Singapore and Taiwan, so the company is going on a roadshow for Saladaeng One to Singapore and Hong Kong next quarter.

This will boost presales to 50 per cent of the project’s Bt4.7 billion value this year. The company has submitted the Environmental Impact Assessment for the project and expects to get it approved next month. Construction should commence this year and be completed in 2017.

The company plans to launch five residential projects worth Bt8.15 billion in the second half of this year. Two will be condominiums worth Bt4.16 billion and three will be detached-housing projects worth Bt3.99 billion. They will help boost its presales to Bt14 billion and revenue to Bt13.9 billion this year, Nuttaphong said.