Jarken has launched a series of upscale homes called “Mine” in a move that is expected to drive its revenue up 11 per cent to Bt300 million this year.

Kuldej Sinthawanarong, managing director of the local architectural and construction firm, said yesterday that the new series would target customers who want to build a residence fit for a unique lifestyle by offering a price of Bt35,000 per square metre, or at least Bt60 million per unit.

Although the economy faced a hard period, demand for luxury homes has continued to grow, so the company introduced a product to serve this market.

More than 75 per cent of its business is walk-in clients who appreciate its residential designs, while 25 per cent is from hospitality firms.

Half of its clients are foreigners who want a home in Thailand.

The company also designs residences for overseas clients in places like Malaysia, Egypt, Hong Kong, Finland and Bahrain, Kuldej added.

SOURCE: The Nation

The entire property market except the industrial sector and serviced apartments is showing signs of recovery as the political situation, the government’s stability and policies to promote foreign investment are helping revive foreign demand.

Aliwassa Pathnadabutr, managing director of the property consultant CB Richard Ellis Thailand, said 2010 had begun with better market sentiment. The improving global economic outlook and brighter perceptions of Thailand’s political situation, together with lower prices than other mature property markets had restored confidence in investing in Thai property.

In the first nine months of 2009, foreign buyers making transactions through CBRE plunged from 35% of buyers in 2008 to just 16%. But the proportion picked up in the fourth quarter to 20%.

”Foreign demand is strong but they wait and see,” she said. ”They [foreigners] are keeping an eye on Thai politics, the government’s stability and policy on foreign investment.”

Meanwhile, property funds and overseas developers will come back later than foreign investors as they consider return on investment, which is influenced by the market outlook.

Last year brought a significant change in condominium purchases. While the value of sales conducted through CBRE last year fell by 30% to 14-15 billion baht from the peak of 20 billion baht in 2008, the number of transactions dropped by only 10% year-on-year.

”Investors diversified risks. They bought smaller-sized units but many more units in various projects, instead of buying large ones and fewer units,” she said.

As high-end condominium prices rose by 5.6% last year to 124,539 baht a square metre on average, developers should offer units sized 15-20% smaller to maintain affordable prices, she said.

”We see a positive sign in the real estate market this year from the government’s initiatives for this sector. The government plans to establish Thailand as a hub for regional offices,” she said.

Ms Aliwassa said the government should consider extending lease terms from the current 30 years to 90 years to stimulate the market and make large-scale commercial projects viable as freehold development is not feasible due to higher land cost.

The supply of downtown condo units rose to 61,522 units as of September, up 14% year-on-year. In total, 17,664 units are under construction in downtown Bangkok, of which 78% are reportedly sold, leaving 3,879 available units, either completed or under construction.

In 2010, CBRE expects a much more competitive market, with project launches from developers who have delayed projects since the onset of the economic crisis in late 2008. New supplies are expected from large developers who have acquired land for development.

”We are very worried about the industrial sector as it is a huge investment. Foreigners are waiting for the government to solve the Map Ta Phut case. If they are not confident, they will hold back investment for a long time,” she said.

SOURCE: Bangkok Post

SET-listed Sansiri Plc plans to develop 20 projects worth 27 billion baht this year with sales projected to grow by 21% to 20 billion baht.

Of the total projects planned, eight will be condominium developments located in prime business areas or near mass transit routes.

The first three projects, worth about 7 billion baht, are due for launch in the first quarter.

In the latter part of the year, Sansiri plans to build its first low-cost condominium under the Board of Investment Home programme, on a 10-rai site in Rattanathibet. The project will mark the developer’s entry into the lower-end market to support its targeted revenue growth of 15% to 20% each year.

President Srettha Thavisin said this year would bring a slight improvement in the value of the Thai property market of about 5% to 10% year-on-year. But political uncertainty will continue to cloud the market outlook and remains the main factor damping sentiment.

”The economic figures have shown that the economy is going in a good direction,” he said.

”Fund managers are most concerned about the political issues. Without such issues, Thailand would be one of the most appealing countries for investors.”

Sansiri delayed its earlier plan to finish raising its registered capital by the end of last year, because of poor market sentiment. The company expects the fundraising, through the issue of 1.473 billion shares, to resume next month providing there is no increase in political risk.

Mr Srettha said the company would not be affected if the capital raise was unsuccessful as it has no liquidity problems and the project finance can rely on bank loans as well as issuing debentures.

Sansiri forecast its sales this year would grow by 21% to 20 billion baht from 16.5 billion baht last year. Revenue is projected to rise to 18 billion baht, a 6% increase from the 17 billion baht expected in 2009.

Net profit in 2009 is estimated to have risen by 64% to 1.5 billion baht from 914 million in 2008.

The company currently has a presales backlog of 16.5 billion baht to be realised in three years.

Sansiri and its subsidiaries currently have about 70 projects to support sales throughout 2010.

Sansiri expects its net profit margin to reach double digits this year as the cost of marketing declines due to more efficient management and media targetting.

The company also delayed its plan to sell a six-unit condominium near London’s High Street Kensington to the second or third quarter this year. The residence costs about 15,793 to 16,722 per square metre. Other overseas projects, including those in Vietnam and New York, are under review.

Sansiri has a 2.4-billion-baht budget to buy land this year. The company is considering plots in Pattaya and Phuket.

Sansiri shares (SIRI) closed yesterday on the Stock Exchange of Thailand at 4.46 baht, up two satang, in trade worth 44 million baht.

SOURCE: Bangkok Post

Thailand’s third largest developer has said it is aiming for a 30 per cent rise in revenues during 2010 as a direct result of rising demand.

Quality Houses is estimating revenues of Bt15 billion from 13 planned projects, according to Senior Executive Vice President Suwanna Buddhaprasart. The company has plans to build two or three mid- and high-end condominium projects during the next 12 months, with prices between Bt80,000 and Bt100,000 per square metre.

Ms. Suwanna added her company expects to book revenues from condominium projects of about Bt3 billion from two city-centre condominium projects that are expected to launch in the second quarter of the year.

The listed developer Raimon Land will continue building luxury condominiums but with a new focus on larger projects and Thai buyers, a shift from its previous focus on foreigners, says chief executive Hubert Viriot.

The previously troubled company has almost completed a financial restructuring, resolved its “internal issues” and is ready to move forward with greater confidence, he said.

Mr Viriot was appointed CEO in March, replacing Nigel Cornick who resigned under a cloud of controversy and falling sales figures. At the time, the company postponed the launch of three projects and industry observers speculated that its flagship project The River, a 15-billion-baht 838-unit development, was in trouble.

Since then, the former vice-president of investments and acquisitions at Kuwait-based IFA Hotels and Resorts, Raimon Land’s major shareholder, has implemented a “sound, but substantial” rehabilitation plan that has cut the company’s operating costs by 40%.

The most significant part of the plan is to repay or refinance the developer’s short-term debt with banks, which stood at 1.67 billion baht at the end of the third quarter. The company expects the process to be completed by next March.

“That [starting to repay/refinance the debt] gave a lot of stability to the company and enabled it to look beyond the week after next,” he said.

Raimon Land in August bought back a 25% stake in Taksin Hotel Holdings, The River’s holding company, from Lehman Brothers Bangkok Riverside Development Ltd, which was unable to fulfil its debt obligations. This increased the developer’s stake in the company to 85%, with IFA holding 15%.

Raimon Land also slashed its marketing budget in 2009 to 4% of revenue from 11% the year before.

“We had to create a more efficient organisation to take care of fewer projects and get ready for a year that we knew would be tough,” he said.

In the first nine months of the year it reported a net loss of 55.6 million baht compared with a profit of 145.78 million for the whole of 2008.

As of September, the company had 9.57 billion baht in assets, liabilities of 6.91 billion, equity of 2.57 billion, and paid-up capital totalling 3.25 billion.

“While we will finish the year on a loss, Raimon Land now has a sound business plan with sound projections and we will continue to build our position within the market,” he said.

IFA increased its stake in the developer by 14.92% to 41.08% when Isthitmar Hotels Fze – a subsidiary of the beleaguered investment arm of Dubai World – divested its shares last August. The buyout effectively reduced the developer’s direct exposure to the Dubai market crash to zero, he said.

The developer is currently consolidating its assets as the final step of its rehabilitation plan. The firm currently owns from 51% to 100% of its projects.

“We realise this has caused some confusion in the market over whether we are a fee developer or an investment developer,” said Mr Viriot. “We’re currently somewhere in the middle and we will have to go one way or the other.”

After more than a decade of developing foreigner-focused projects, and having closed its sales office in Russia, the firm will now target Thai buyers.

“We will continue focusing on luxury but we are now looking at 28- to 40-year-old Thais … in Thailand’s biggest, most sustainable market, which is Bangkok.”

The firm will also focus on large-scale projects, such as The River. The 200,000- square-metre project with 105,000 sq m of saleable space has sold 62% of its units, passing the 9-billion-baht break-even point, he said.

With two years to go before transfer, Mr Viriot said he has no concerns about the project failing to sell out.

The value of The River is equivalent to Raimon Land’s six other projects in Phuket, Pattaya and Bangkok.

The developer has also acquired a plot on Phloen Chit Road for about 2 billion baht, where it plans to develop another large-scale property.

“These kind of projects may require partners simply because, due to their size of 150,000 to 250,000 sq m of floor area, they may include different components [residential, retail and commercial],” he said.

Outside Bangkok, Raimon Land is still selling completed units at Northpoint in Pattaya and The Heights in Phuket, which have about 20% of units left unsold.

SOURCE: Bangkok Post