AP (Thailand) to launch 15 projects on back of growing demand from middle and upper classes

Four of the new projects are condominiums worth Bt15.24 billion combined, six are townhouse projects worth Bt5.49 billion, and five are detached-housing projects together worth Bt3.29 billion.
They form part of the listed developer’s earlier business plan to launch 24 residential projects worth Bt25.62 billion this year, nine of which came on to the market in the first half.
The programme is expected boost overall revenue to Bt25.3 billion by year-end, up 9 per cent from last year’s Bt23.2 billion, chief marketing officer Vittakarn Chandavimol said at a press conference yesterday.
In its business plan, AP (Thailand) also set aside Bt10 billion for land purchases for residential development next year.
Some Bt4 billion of this amount was spent during the first six months, with the remainder available for further purchases during the latter part of this year.
Meanwhile, the company has reported presales worth about Bt18 billion through to July 20, and a Bt34.4-billion backlog of property waiting to be transferred to customers.
Up to Bt12 billion of the backlog will be booked as revenue this year, he said, adding that the company is confident or reaching its full-year revenue target. For the first quarter, AP (Thailand) reported revenue Bt5.23 billion and a net profit of Bt559.59 million.
Vittakarn said that although the economy had grown only slightly in the first half, residential demand had continued to expand in the middle- and upper-income market.
This has been the company’s main target segment, driving 2015 sales so far this year to Bt18 billion, while demand is expected to continue to grow over the remainder of the year.
Meanwhile, AP (Thailand) customers have faced a mortgage rejection rate of 12 per cent, well below the average of 30 per cent for the sector.
The chief marketing officer said most of its customers had been pre-approved by banks before making a decision to buy a property, as its targeted middle- to upper-income buyers still had sufficient purchasing power and financial status to be granted a mortgage.
“Although some customers at our Baan Klang Muang Ratchavibha project complained [about deflection] in June, it has had little impact on our general sales because customers understand the problem [and what AP (Thailand) is doing about it]. As a result, our sales from July 1 to July 20 still came in at around Bt1 billion,” he said.
He said the company had now finalised implementation of its “AP Standard” to control construction quality and after-sales service, and in particular to fix deflection problems arising from the construction process.
It had been working on the standard since 2012 and it was now fully up and running, he added.
“Following the AP Standard concept, we believe that we will be able speed up the resolution of customer complaints when they face the problem of deflection,” said Vittakarn.
Under the AP Standard and fix-it concept, customers will get a quick response within 24 hours of contacting a dedicated call centre, and will have their home repaired within seven to 15 days, depending on the extent of the problem, he explained.
The company has also set aside one per cent of its annual revenue since 2012 to support its after-sale service and repair deflection and other issues, he said. “We started to set this amount aside each year after the severe floods of 2011, and it can now be used for deflection and unpredictable situations,” he added.