Property developer the Tana Group will invest a total of Bt800 million to expand its business upcountry, focusing on Pattaya and setting a sales target of Bt500 million for the year.

Two projects have been launched: Silk Road Place and Ratchaphruek 2 Road, both on Pattaya's Jomtien Beach.

Chairman and managing director Thana Sangmitr said the company had to expand new property projects to tourist destinations, because demand for resort homes was increasing among foreign retirees from Europe, especially Scandinavia, and from Asian markets like Japan, Hong Kong and Singapore.

"Purchasing power to buy housing in Bangkok's middle market has dropped slightly from 2005.

The bank did not approve mortgage loans for half of our customers, because most of them had bad credit ratings recorded at the Credit Bureau," he said.

The market trend now is for customers who had planned to buy property projects in Bangkok, such as Discovery Bali Hai and Discovery Balica, have delayed making a decision.

As a result, the company must expand new property projects upcountry by focusing on tourist destinations like Pattaya, Phuket, Hua Hin and Koh Samui.

The first project is Silk Road Place in Pattaya, with an equal focus on foreign and domestic buyers.

"We set up a marketing budget of Bt3 million for a road show on the Pattaya project in Hong Kong, Singapore and the UK that will start on May 8," Thana said.

The company will offer foreign investors a 30-year contract that can be renewed twice for a 90-year lease.

The company has currently succeeded in selling 40 per cent of 51 units in the Pattaya project's first phase.

That has generated sales of Bt160 million in this year's first quarter.

"We expect the first phase will complete sales in the third quarter and will launch a second phase of 49 units in the fourth quarter," he said.

Meanwhile, the company plans to launch a condominium project in Pattaya worth Bt50 million in the second half of the year.

The company also will launch a second property project in Phuket in the fourth quarter that will focus on both domestic and foreign investors. It is also interested in investing in its first condominium project on Sukhumvit Road in Bangkok next year, worth up to Bt500 million.

"We must wait and see before launching our new property project in Bangkok, because home-buyers continue to be concerned about political risk and their future earnings.

"As a result, demand for housing this year has continued to show slight growth," Thana said.

The Tana Group announced total sales of Bt400 million last year from its housing projects on Vibhavadi-Rangsit Road.

The company also expects sales growth

of up to 25 per cent this year, or Bt500 million.

"We're confident our sales will meet the target after the residential projects in Pattaya are launched, because most customers there have the purchasing power to buy and don't have credit problems like our customers in Bangkok," Thana said.

Somluck Srimalee

The Nation