Property firm Prinsiri is negotiating the establishment of a joint venture with a US counterpart, to develop new projects in Thailand in the second half of the year.

Financial director Namchai Vanapanubet said Prinsiri would hold 51 per cent of the joint venture but declined to disclose the name of the US firm.

"Foreign investors have strong confidence in expanding their investment in the Thai property market, because our residential prices continue to be lower than in neighbouring countries in the region," he said.

Namchai said the company was considering developing a property project in Pattaya in the second half of the year that would focus on the foreign market.

"Demand for condominium projects at tourist destinations has shown strong growth, especially among foreign investors buying second homes in Thailand. As a result, we're interested in expanding our investment in Pattaya this year," he said.

He said the company would invest Bt3 billion this year: Bt2 billion for 14 property projects - eight in the first four months of the year and six in the second half - and Bt1 billion to buy land for development next year. To support its investment plan, the company will raise funds from the capital market by launching 335 million new shares under public offering in the second half of the year, which would balance its debt-to-equity ratio at 1:1 for the year.

The company increased its registered capital from Bt670 million to Bt1.34 billion in the first quarter by selling 335 million shares to existing shareholders. As a result, the company's paid-up capital increased from Bt670 million to Bt1.005 billion.

Namchai said the property market had shown slight growth from last year to this year's first quarter. However, this will not affect Prinsiri's financial projections this year, because the company has developed new products to match home-buyers' demand by focusing on the middle market, which has the purchasing power to buy housing priced at less than Bt3 million a unit.

"Our presales in the first four months of the year amounted to Bt2.5 billion, more than our previous estimation. As a result, we believe our presales will reach Bt6 billion by the end of the year," he said.

He added that the reason Prinsiri surpassed its presales target for the first four months was that the company had introduced three condominium projects, on Rajprarop, Phaholyothin and Narathiwat roads and offering prices between Bt1.4 million and Bt2 million a unit. Positive feedback was received from the market, resulting in the company beating its target.

With the growth in presales, the company believes this year's revenues will book at Bt4 billion by year-end.

Of that total, Bt1.8 billion will come from last year's presales projects that transfer to customers this year and Bt2.2 billion from presales of detached houses this year.

Prinsiri announced total sales of Bt2.9 billion and a net profit of Bt447.8 million for last year.

Somluck Srimalee

The Nation