Inventory of top 10 firms jumps 15% in first 9 months
After the value of the Greater Bangkok property market dropped 15 per cent in the first nine months of this year, the top 10 listed property firms' total inventory as of September 30 was worth Bt269.34 billion, up 14.99 per cent from the same period last
They recorded total revenue of more than Bt5 billion in the period.
Inventory includes undeveloped land, homes under construction, and completed homes ready to sell.
According to the financial results as of September 30 as reported to the Stock Exchange of Thailand in mid-November, Sansiri had the highest inventory value of Bt57.04 billion, up 25.03 per cent year on year. Pruksa Real Estate’s inventory was worth Bt53.74 billion, up 10.39 per cent, and Supalai’s was Bt33.46 billion, up 26.15 per cent.
Meanwhile, AP (Thailand) reported inventory worth Bt30.21 billion, down 1.85 per cent from a year earlier. Quality Houses dropped 1.64 per cent to Bt22.18 billion, while Raimon Land reported only Bt8.28 billion, down 20.99 per cent. (See graphic for the others.)
"We cannot say all of the inventories are stock, because some are backlogs that are already sold but waiting for construction to be complete before transferring to customers. Under our accounting standards, they will be booked as revenue once they are delivered to customers," said Pruksa’s managing director for condominiums, Prasert Taedullayasatit, who is also president of the Thai Condominium Association.
He added that of Pruksa’s inventory worth Bt53.74 billion, up to Bt2 billion worth was completed homes for sale. The rest was undeveloped land and its backlog that will transfer to customers when construction is complete.
Pruksa reported a total backlog worth Bt38.79 billion as of September 30.
"Our backlog will generate revenue through 2017," he said.
Samma Kitsin, director-general of the Real Estate Information Centre (REIC) of Government Housing Bank, said it would take more than two years to sell off such a high inventory worth Bt269.34 billion. This is based on the annual valuation of the residential market of about Bt600 billion, half in Greater Bangkok and the rest upcountry.
The top 10 listed property firms hold about 35 per cent of total market value. They have about half of the Greater Bangkok market. This is based on the combined 2014 revenue target of the top 10 of nearly Bt214 billion.
According to a survey by the REIC, the residential market in metropolitan Bangkok dropped 15 per cent in the first 10 months of this year. The condominium market declined by 25 per cent in the period, while the market for low-rise homes – detached houses, townhouses and duplexes – in the metro area grew by 8 per cent year on year.
"Property firms delayed launching new residential projects, especially condominiums, because they had to shoulder high inventories as demand slowed," Samma said.
