Property Perfect plans 10 projects in 2014 amid fall in under Bt2m market

Property Perfect plans to launch at least 10 new residential projects worth more than Bt20 billion next year, targeting presale and revenue growth of up to 30 per cent compared with this year’s levels.

Meanwhile, the company has lowered this year’s presale target from Bt16 billion to Bt14 billion. This is the second adjustment in the target as demand for home purchases has slowed, especially in the under-Bt2-million market, chief executive officer Chainid Adhyanasakul said.

The company recorded presales worth Bt8 billion in the first nine months of the year and targets Bt6 billion in final quarter, for a total of Bt14 billion.

To boost presales in the current quarter to achieve the target, the company plans to launch five projects worth Bt9 billion in the remaining months of the year. They are iCondo Bangna worth Bt1 billion, iCondo Salaya worth Bt700 million, Metro Riverfront Rattanathibeth worth Bt1.8 billion, Metro Sky Prachachuen worth Bt4 billion, and a new-brand condominium project at Khao Tao, Hua Hin, worth Bt1.5 billion. 

“The first-car scheme absorbed purchasing power of [potential] home-buyers with salaries ranging between Bt20,000 and Bt30,000 until they could not buy a residence. This had a direct impact on the market for homes priced up to Bt2 million,” Chainid said. 

Property Perfect’s investment budget will come from cash flow, bank loans, and a property fund.

Yesterday it appointed One Asset Management as financial adviser and underwriter of the Uniloft Property Fund worth about Bt520 million. The property fund will manage its dormitory Uniloft Salaya.

“Our income from the property fund will be used to pay back loans worth Bt200 million, and the rest will be our cash flow for investment in new residential projects,” he said.

The company also plans to launch a real estate investment trust (REIT) worth up to Bt1.5 billion once its dormitories Uniloft Chiangmai and Uniloft Bangna start to operate in 2014 and 2015 respectively, he said. 

The 10 projects launched next year will include detached houses, townhouses and condominiums. 

About 40 per cent of the projects will be condos. For these, the company will focus on relatively low-rise designs of only eight storeys, because these will require less labour than high-rises and also take less time to construct, at 12-18 months. This will generate income faster than a high-rise condominium project. 

The company expects home prices next year to jump by at least 10 per cent. This increase will be partly due to higher land prices, while the cost of labour will also rise because of the shortage of workers. This year saw more than Bt100 billion worth of condominium projects launched, swelling the demand for construction labour, and in the near future the government’s Bt2 trillion worth of infrastructure projects will also need workers. 

Rising demand will also put upward pressure on construction-material prices.