Siamese Asset charts out a new course

Siamese Asset has entered the scene with the ambition of shaking that mantra. Led by Kajohn SaeAng, managing director, it has introduced a new mantra – “Location, quality and affordability”. Starting business last year as the development arm of four shareholders in construction firm Ritta Group, including Kajohn, Siamese Asset has already surprised those in its peer group. Its first project emerged on Sukhumvit Soi 39, one of the prime locations for residential developments. Despite quality designs and construction work, the condominium units were 30-per-cent cheaper than those in the neighbourhood.
“I only want a 10-per-cent margin, compared to 30 per cent elsewhere. I want to prove that a premium product can be affordable. My mission here is to set a new residential development standard in Thailand, whereby middle-income earners can afford the luxury usually preserved for the wealthy,” Kajohn said in an interview.
He was inspired by the tremendous response to the firm’s first project, Siamese Gioia. Aside from the affordable price, which helped close sales quickly after its launch in January, the project was among the four finalists for the Thailand Property Awards in the Best Luxury Condo Development (Bangkok) category. It put the project on a par with The Residences at The St Regis Bangkok, which quoted Bt250,000 per square metre, against the Bt80,000 lowest price tag for Siamese Gioia. Due to the comparative quality, Kajohn was not sad that his project did not win the title.
Siamese Thirty Nine was launched in November as the second project. Though located in a luxury residential area, Sukhumvit Soi 39, the average price is Bt94,000 per sqm, again, 30-per-cent cheaper than others in the area. The strategy was successful, as more than 80 per cent of space was sold in two weeks.
Having been involved in the construction industry for over 30 years as a co-founder and former chief operating officer of Ritta Group, Kajohn was aware of the excessive margins enjoyed by property developers. Against the contractors’ normal margin of 6 per cent of construction value, developers usually enjoy a margin of 30 per cent of project value. To Kajohn, Siamese Asset’s 10-per-cent margin is more than enough, given that based on the project value it is five to six times higher than the margin enjoyed by construction firms. And all three other shareholders – who are also shareholders of Ritta – share this view.
And this business strategy will be applied to all new projects, which include a mixed project at Soi Rajakru to be launched this year, as well as a commercial-cum-residential project on Ram-Indra Road.
While having Ritta as its sole contractor, Siamese Asset also benefits from other connections with the construction group. The company now has fewer than 50 employees, as the back office is handled by Ritta for a fee. Ritta also assists the design and construction team. Of five Japanese staff, three are permanent employees of Ritta who help select the best raw materials and construction techniques for Siamese Asset’s projects.
To keep financial costs low, the company has a policy not to accumulate a land bank. Location comes first. And then once the company spots a potential site, the design team is ready to devise a project suited to the site while the process to buy the land plot is kicked off.
“Buying land for a particular development project could be costly. However, a land bank comes with an interest burden. Eventually, when the development actually takes place, the land plot would cost as much as the current market value,” Kajohn said.
Competitive pricing ensures quick sales, and the proceeds well cover the construction cost.
Thanks to the low operating and financing costs, even with a low margin, Siamese Asset is to break even when the second project’s sale comes to an end, Kajohn said.
Now, without the financial |burden to worry about, Kajohn enjoys the freedom to follow his dream. While location, quality |and affordability remain the keys, he is inspired to come up with in-novative residential designs to improve residents’ quality of life. The first low-rise project in Ram Intra will feature nouveau-style townhouses. They are designed |for maximum air ventilation with a big garden, so that no air-conditioning is needed. The multi-layered townhouses are designed for all functions, and include garage space.
On the launch date, he vowed |to surprise the market. Aside from the design and prices, he would have all buyers sign an agreement
 that no extra refitting would be introduced to the units. He has been delighted to discover that many architectural and design firms are ready to join his dreams to develop innovative projects.
In the future, he dreams of developing a hotel-cum-residential project. Like hotel guests, residents are treated with luxury hotel-quality accommodation and services.
“I want to prove that our pro-|ducts can shake the industry. Call this my intention to return something to society. Yes, we can do that, as profit is not the point here. We’re not a listed company,” the engineer-by-training said.