Presale, revenue growth target set at 10-20% year on year
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LISTED PROPERTY firms target presale and revenue growth of 10-20 per cent compared with last year thanks to demand in the market recovering and high backlogs built up since 2011 being booked as revenue this year.
According to the business plans and financial targets for this year announced by the 17 listed developers, they target total presales of Bt291.95 billion and total revenue of Bt264.03 billion, up by an average of 15 per cent from 2014.
That revenue target accounts for 44 per cent of the nationwide property market worth Bt600 billion.
Pruksa Real Estate takes the lead by targeting presales of Bt47 billion and a similar amount in revenue this year, up 20 per cent and 10 per cent respectively from the Bt39.09 billion and Bt42.7 billion posted in 2014.
Sansiri is next, targeting presales between Bt30 billion and Bt32 billion and revenue of Bt35 billion, up 255 per cent and 18 per cent respectively from presales of Bt9 billion and revenue Bt29.5 billion in 2014.
Land & Houses ranks third in terms of targeted revenue at Bt28 billion, but second in forecast presales at Bt34 billion (for others, see graphic).
“We are confident that the property market this year will recover with overall growth of 5-10 per cent. “As a result, we are confident our revenue will meet the growth target this year,” Pruksa Real Estate president and chief executive officer Thongma Vijitphongpun said.
As of the end of last year, the company had
a backlog of projects worth Bt34.22 billion, Bt22.86 billion of which will be booked as revenue this year, said the company chief.
Sansiri president Srettha Thavisin said the company had revised its business plan to focus on the middle- and upper-income markets because of a decline in purchasing power among lower-income people this year.
Sansiri has a total backlog worth Bt45 billion, up to Bt35 billion of which will be booked during 2015, and as a result the company’s revenue will meet the target, he said.
Land and Houses president Naporn Sunthornchitcharoen said the company believed the property market this year would see single-digit growth as the economy grows by 3-3.5 per cent. This is assuming implementation of the government’s infrastructure projects and revived consumer confidence.
However, the property market continues to face business risks as the commercial banks have tightened their provision of mortgages. Prospective L&H customers were hit by a mortgage rejection rate of 15-20 per cent last year, compared with just 12 per cent in 2013.
“With the business risk, we are forecasting presale and revenue growth of only one digit this year,” Naporn said.
LPN Development targets revenue of Bt16 billion this year. Up to Bt14 billion worth of its backlog of condos will be transferred to customers this year, and the rest will come from new residential projects, managing director Opas Sripayak said.
The company also targets presales worth Bt20 billion this year from both existing and newly launched projects. It bases this target on indications that the economy will recover, after the overall property market declined by about 10 per cent last year compared with 2013, he said.
Amid that decline, LPN’s presales last year missed the target of Bt20 billion, ending up at only Bt17 billion, Opas said.
He added that the company saw its mortgage-rejection rate increase from an average of 10 per cent to 15 per cent last year, especially for its condominium projects in the provinces, where the rejection rate was higher than in Bangkok.
Given the market trend, the company has revised its business plan to focus on Bangkok rather than upcountry. It will open only one project outside the capital, in Hua Hin, where there is demand from both Thai and foreign investors, he said.
AP (Thailand) is one of property firms with strong confidence that the market will recover this year. It is launching the highest number of new residential projects since it was established in 1991 – 24 projects worth Bt20 billion.
The company targets presales at Bt28.3 billion, up 24 per cent from 2014, and revenue is put at Bt25.3 billion, up 10 per cent.
“We are confident that the market will recover, especially the demand for condominiums,” AP (Thailand) CEO Anuphong Assavabhokhin said.
Good two months
Confident of a market recovery, most developers started launching new residential projects early this year.
In the first two months, Pruksa Real Estate recorded presales worth Bt8.6 billion, up 145 per cent from Bt3.5 billion in the same period of last year.
LPN Development posted presales of Bt2 billion in those two months, up 10 per cent year on year.
AP (Thailand) recorded presale of Bt3.1 billion in January and February, up 160.9 per cent.
“The first two months of this year saw higher presales than the same period of last year because at that time, the country faced a political problem that had an impact on the residential market in the first half,” said Thai Condominium Association president Prasert Taedullayasatit, who is also managing director of condominiums for Pruksa.
