Property Perfect takes prudent approach as Thailand’s real estate conditions get tough

With just seven new housing projects slated for launch, the developer is navigating the complexities of a market grappling with the aftermath of the Covid-19 pandemic. 

At a media briefing on Tuesday, Property Perfect’s managing director Wongsakorn Prasitvipat acknowledged the subdued outlook for Thailand’s property market this year. 

Citing lingering impacts from the pandemic, including cautious customer spending and high-interest rates, Wongsakorn outlined the company’s strategic plans for this year in response to prevailing market conditions.

He noted that the high rate harmed the supply side as well, resulting in a burden for real-estate developers. Plus, he said, bad news about corporate bond defaults is also making it tough for developers to raise funds. 

“At the end of the day, the scenario tells us [Property Perfect] to be more prudent and cautious when expanding this year. As a result, rather than investing more money in new projects, we are focusing on balancing our balance sheet and selling assets to reduce our debt burden,” he said.

The company’s measured approach entails launching seven new housing projects, valued at 7.7 billion baht, targeting the middle- to upper-income segment. The projects have single houses, semi-detached houses and townhomes with price tags starting at 5 million baht.

“We will not launch any new high-rise projects because we have seen no positive rise in market demand,” Wongsakorn said, adding that the company will focus on selling existing condominiums while maintaining a diversified portfolio of 65 projects across 23 brands, encompassing residential, commercial and hospitality developments. The projects are worth nearly 120 billion baht and comprise 21,781 units. 
There are 8,146 units valued at about 57.04 billion baht that have not been sold yet. 

To fortify its financial position, Property Perfect aims to reduce its debt by 7 billion baht within this year, and an additional 2 billion over the next two years. 

By the end of 2026, the company expects to reduce its total debt from 16 billion baht to 11 billion. 

Initiatives to alleviate debt burdens include selling some of its land assets and one of its hotels in Bangkok. 

“We currently have three hotels in Bangkok and some two or three companies have shown interest in them. We have set our initial price at 5 billion baht,” he said. 

Wason Srirattanapong, chief business development officer, underscored the strategic significance of the new housing projects, which offer easy access to Bangkok’s city centre. These projects are poised to bolster the company’s revenue stream and cash flow.

“Our revenue target for this year is 18 billion baht, with 8.6 billion baht coming from housing, 2.38 billion from condominiums, 3.77 billion baht from joint venture projects, and 3.25 billion from hotels," he said.

Property Perfect currently has three joint venture projects with Hongkong Land, Sumitomo Forestry and Sekisui Chemical. 

It also hopes that the rapid tourism recovery will boost revenue from its five hotels – three in Bangkok and two in Hua Hin – by 22% this year. 

Despite prevailing market challenges, Property Perfect remains optimistic about Thailand’s property landscape, buoyed by forthcoming urban development initiatives, improved transportation and mega-projects by major developers. 

Wason pointed out that the new city plan would open the door to potential opportunities for developers, with improved public transport connectivity expanding demand in suburbs and boosting the overall industry sentiment.