Supalai plans to expand in the provinces

Tritecha Tangmatithum, the new managing director, told a press conference last week that the 14 projects comprise 13 low rises such as single family homes and townhouses and one condominium.

The new projects would increase the presales target in provinces from 22 per cent of total presales last year to 25 per cent this year.

Over the past two years, demand for housing upcountry remained high especially for low rises, while supply was reduced as not many projects were launched. 

However, demand for condominiums was still low because the market was still in oversupply.

The property market in the provinces is gradually growing as presales in those areas are stronger than eight years ago. Presales eight years ago were just 5 per cent.

Although its target customers have been hit by the drought, that would not affect the company’s plans as people in the provinces have real demand and better purchasing power.

Another interesting figure in the provincial market was the market share of foreign customers.

Five per cent of Supalai Monte, the condominium in the northern province of Chiang Mai, was bought by Chinese, South Koreans and Japanese, while only 2 per cent of the firm’s condominiums in Bangkok were bought by foreign customers.

The foreigners bought units for occupancy rather than for income, as people know that Chiang Mai is a holiday destination. However, there is still more room to grow for foreigners if the country’s politics is more stable than at present.

Supalai already has developments in 10 provinces – Chiang Mai, Surat Thani, Songkhla, Phuket, Udon Thani, Khon Kaen, Chon Buri, Rayong, Ubon Ratchathani, Nakhon Ratchasima and this year it is expected to launch a single family home project in Nakhon Si Thammarat.

The areas that the company would choose for development must have high potential, high population growth and the capacity for at least three projects.

The company aims for growth in presales of 6.2 per cent to Bt24.5 billion and in revenue of 5 per cent to Bt22 billion this year from 29-35 new projects worth Bt36.57 billion.

About 22-25 projects are low rises and seven to 10 are condominiums marketed this year. It would be a company record for new projects.

The company saw good demand late last year, especially for low rises. Presales in the fourth quarter averaged Bt1.3 billion per month, up from Bt1 billion in the same quarter of 2014. 

Last year, the company earned Bt4.3 billion.

Although no projects broke ground early this year, the company’s low-rise presales for January and February surged 27 per cent to Bt3.13 billion from the same two months of last year. 

The company is looking for presales of almost Bt5 billion this quarter. The government’s measure to stimulate the property industry as well as the low increase in the rejection rate helped boost presales.

The company now has enough land nationwide to develop residential projects valued at Bt120 billion over the next four and a half years.

The company has set aside a Bt21.2-billion capital expenditure budget for this year, of which Bt8 billion is for buying land and Bt13.2 billion for constructing infrastructure at its project sites. Half of the budget will come from internal cash flow and the rest from issuing three- and three-and-a-half year debentures worth Bt7 billion-Bt8 billion, he added.