Residential Property
Record-high low-rise presales in October
Residential Property
New launches fuelled supply and presales MoM in October. What stands out is the record high for low-rise presales thanks to strong response to LH’s Nantawan Bangna
- Presales in 10M15 were Bt151bn, +15% YoY, accounting for 80% of our 2015F. More new launches in November means presales will continue solid. In our universe, only LPN may miss its presales target due to its postponement of new launches.
New supply increase driven by condo. AREA reports higher new supply in Bangkok and vicinity in October, with new launches up 35% MoM to Bt44.6bn, of which 57% is condo (+347% MoM) and 43% low-rise (-31% MoM). Major condos were The Line Ratchatewi from BTS SIRI Holding, The Esse Asoke from S Estate, Life Pinklao from AP and Happy Condo Donmuang The Terminal from Infinite Real Estate, a non-listed company. The low-rise supply included Nantawan Bangna from LH,
Supalai Prima Villa Budhamonthon 3 from SPALI, and Laddarom Bangna from QH. The best sales were seen for condos priced at Bt10-20mn, where 87% of the new units sold; condos priced above Bt20mn saw sales of 78% and TH priced at Bt3-5mn saw 60%. New supply in the 10M15 grew to Bt332.8bn, +19% YoY: 58% condo (+34% YoY) and 42% low-rise (-25% YoY).
Low-rise presales a record high. The good response to LH’s Nantawan Bangna (17% sold) led October aggregate low-rise presales up to a record of Bt10.9bn, +28% MoM, for the seven lead property developers (AP, LH, LPN, PS, QH, SIRI, and SPALI). Condo presales nearly doubled MoM to Bt6.9bn, boosted by the rapid sell-out of The Line Ratchthewi
. This pulled aggregate presales up a strong 47% MoM to Bt17.8bn in October and 10M15 presales up to Bt151bn, +15% YoY, accounting for 80% of our 2015F.
Steady November. We look for steady presales in November with more launches:
- AP: AP sold 20% of Life Pinklao, missing its target of 30-40%.
- LPN: LPN sold 30% of Lumpini Ville Sukhumvit 76, in line with target. It will launch Lumpini Township Rangsit Klong 1 phase 2 in December but has put off Bang Wak to next year. This suggests presales downside of 10% to Bt15-16bn for 2015.
PS: Take-up rate for Plum Condo Central Station phase 2 slowed to 10-15% after selling out the Bt2.4bn phase 1 quickly.
- SPALI: Supalai Riva Grand is located on land originally destined for Sahaviriya City. SPALI will demolish four old buildings and build new three ones on the land. It sold 50% of the project, above its expectation of 40%.
- LH: It launched five projects that brought in total presales of ~Bt1bn: Laddawan Rama II, Indy Pracha-u-tid 3, and three projects ranging from high- to low-end (Mantana, Chaiyapruk and Indy on Bangna-Trad km 7). LH has raised the value of Mantana Bangna to > Bt2bn from Bt650mn after buying more land.
Top picks: LH and LPN. We like LH for its turnaround story in 4Q15 and its growth outlook for next year. Adding to its attraction is the one-time gain of ~Bt800mn from an asset spin-off in 4Q15. We continue to like LPN for its good 2016 growth outlook.
