L&H chief upbeat on this year's economic prospects

With the global economy showing signs of recovery this year and Thailand well placed to benefit from being a hub within the upcoming Asean Economic Community (AEC), Land & Houses president Naporn Sunthornchitcharoen is generally positive about the Kingdom’s 2014 economic outlook.

The domestic political crisis is the one key factor that could damage this year’s prospects, he told The Nation in a recent interview.

In relation to the government’s planned infrastructure mega-project, which could be delayed by the Constitutional Court, he said: “Thailand really needs the infrastructure spending to prepare ourselves for the AEC [in 2015] and improve our logistics. So I think we will finally see the project taking place.”

He added that in both the United States and Japan solid economic data pointed to stronger economic momentum this year, which was a positive factor for global economic growth and should drive an improved Thai export performance.

Meanwhile, with the AEC coming into effect in a year’s time, many foreign businesses will expand their investment within Asean, and especially in Thailand, which is at the heart of the regional grouping, said the listed property developer’s chief.

“We see good signs for the country’s economic growth [in 2014], as long as its political problems can be solved,” he said.

Naporn added that the political crisis was currently the only major negative factor for Thailand’s economy over the course of the next 12 months.

If the impasse can be broken and the best solution found for the country’s political system, he believes the economy this year can grow by more than the estimated 3.5 per cent for last year’s gross domestic product – and this would also drive growth in the property market.

Property-sector expansion normally follows the country’s economic growth because people make the crucial decision to purchase a home when they are confident about their future earnings, he said.

Assuming GDP growth of at least 4 per cent, Naporn said L&H expected to maintain double-digit revenue growth over the next 12 months. 

The company plans to launch 20 residential projects worth more than Bt35billion combined, up to 50 per cent of them for detached housing, and the other half condominium and townhouse projects.

Meanwhile, the company will wait and see whether the government’s Bt2-trillion infrastructure mega-project makes progress when the country has a new government after the general election scheduled for February 2.

“If the country expands its investment via Bt2 trillion of infrastructure, it will change the property market,” he said.

A go-ahead for construction under the transport-infrastructure project would open up new locations for development, some of which would also link the Kingdom to neighbouring countries. This would present a welcome challenge for property firms to expand their investment in provinces close to the country’s borders, he explained.

“When the government invests in the infrastructure project, it will boost foreign confidence in the country’s economy, and also boost foreign direct investment in Thailand,” he said.

 

Core businesses, new blood

Even if there were to be a delay in the Bt2-trillion infrastructure programme, L&H’s 2014 business plan would not be affected, he insisted, as the developer would continue to launch new projects in line with its current plan.

The strategy is to continue to focus on three core businesses: the development of homes for sale, which is its main income stream; its investment arm in Thailand and overseas, which generates income for the long term; and rental income.

Overseas, the company continues to focus on the US market, but it is also studying the possibility of investing in Europe.

As to neighbouring and other AEC countries, Naporn said the company would have to study the foreign-investment law in each market before deciding on whether to invest.

“We accept that the AEC will open up opportunities for our business expansion, but we have to take time to study the opportunities and business risks before making any decisions,” he said.

Meanwhile, in line with the changing business environment, the president said the company’s strategy was to find new blood for its middle management by operating a training system for new employees who were top students at university. 

They will receive training in all of the company’s business units in an overall programme taking about two years. This will support the company’s future business expansion.

“We started this programme in 2012, and it will support long-term business growth in our three core businesses,” he said.