Sammakorn may turn to condos, townhouses

“We may launch our townhouses and condominiums in the last quarter of this year or next year,” managing director Kittipol Pramoj na Ayudhya told The Nation last week.
The company has revised its five-year business plan and is now ready to propose it to its board of directors this month.
The company had always developed single family home projects and did not have staff with experience in townhouses and condos, but now demand has changed. If the company wants to continue growing at 10 per cent a year, it will have to enter the new market.
Its condo projects will have to be located near mass transit and be priced at not more than Bt2 million per unit. Townhouse projects will also have easy access to public transport and offer units at not more than Bt3 million each.
The new business plan will require a budget of at least Bt1 billion, financed by internal cashflow and bank loans. The firm is studying issuing debentures the next time. That will keep its debt-to-equity ratio at not over 1 time.
If the board approves the plan, total revenue can be over Bt1 billion a year. This year, the company believes that it can transfer units worth Bt1 billion to customers after booking pre-sales of Bt800 million in the first half. This is the first time the company will hit Bt1 billion.
Sammakorn’s retail business, which now has three branches in Khlong 2 Rangsit, Ramkhamhaeng and Ratchapreuk, will generate net profit of Bt5 million-Bt10 million a year.
“We have no plan to develop another retail branch this year and next year, as we have to wait and see the three branches’ operations, whether they will meet the target or not. After that we will reconsider,” he said.
Kittipol, who also president of the Thai Real Estate Association, said the property market had recovered by May after the devastating floods of last year. The recovery covers both locations that faced floods and dry areas.
According to a survey by the Real Estate Information Centre, new residential registrations in Greater Bangkok in the first four months were worth Bt90 billion, down about 1 per cent from the same period of last year. That is better than estimated, while the market also shows it is returning to normal. New registrations in May and June will be better than the first four months.
The residential property market in Greater Bangkok now is not facing a bubble because new projects match with demand except in some locations where supply exceeds demand. But that is location by location. It cannot be said that the whole property market is in a bubble.
“Most commercial banks have restricted both mortgage loans and projects loans to home-buyers and developers. Meanwhile, only 10 per cent of home-buyers in the market are buying for speculation. That is still lower than the time of the economic crisis in 1997. That is why we believe that the property market will not grow into a bubble now,” he said.
The main problem of the real estate industry now is the labour shortage. There is unfilled demand for about 300,000 workers.
“The association will discuss with two other property associations, the Business Housing Association and the Thai Condominium Association, and related businesses such as the construction association and other property associations nationwide, to find a way to solve this problem,” he said.
The association will urge the government to revise the restriction on foreign labour moving from one location to another because the property business by nature moves from site to site. When property firms cannot take their work crews to a new construction site, it is |difficult to solve the labour problem, he |added.