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Published on February 15, 2008

Over the past few years, many big listed companies have declared their intention to dominate various markets by defeating their rivals.

Among the aggressors in the cut-throat competition of Thailand's "Red Ocean" has been Property Perfect, defending its position among the country's top three listed property companies by revenue by intimidating competitors with big-money invective.

But these days, analysts point out that Property Perfect has actually been quite a slow mover, considering its release of new products. Moreover, it seems bent on collecting only large plots of land. Compared with other players in the fiercely competitive property market, its marketing is described as "inert", while its product differentiation does not realty stand it apart from the rest.

CEO Chainid Ngow-sirimanee accepts this criticism.

"We can only push ourselves to stay among the top five property companies, and if we've ignored [the need] to adjust ourselves since 2005, we may even drop," he admits.

The company tried to create products with a "more modern" look in 2005-06, in a bid to meet customer demand.

In 2005, it created a new brand called Metro Park for its condominium business, with units selling for between Bt1.2 million and Bt2.5 million. In 2006, Property Perfect created another brand called The Villa, for townhouse and twin-house projects. Located near the Skytrain, the residences sell for between Bt1.7 million and Bt3 million.

Before these, Property Perfect had only Perfect Place, with single-detached houses selling for Bt3.5 million to Bt7 million; Perfect Park, with single-detached houses selling for Bt2 million to Bt2.5 million; and Maneeya Masterpiece, with prices starting at Bt7 million. But the company has been forced to change its strategy.

"We don't stick to traditional thinking any more," Chainid says. "Today, we create products to cover all segments and always set the position of new products precisely. The result of the adjustment will soon be obvious."

Property Perfect began to see a return from its business adjustments last year, particularly from its new condominium business. It believes the improving returns may soon enable it to start paying dividends again.

However, it achieved sales of only Bt6.5 billion last year, falling short of its Bt8-billion target.

Chainid says the reason for the shortfall was some customers failing to receive loan approval from banks after they had reserved houses. Also, the company postponed the launch of a new condominium on Ratchadaphisek Road in last year's fourth quarter.

However, this year has begun well. Property Perfect has established the Property Perfect Fund, with approval from the Securities and Exchange Commission. The fund will buy 17 single-detached houses at Property Perfect's Perfect Masterpiece project in the Ekamai-Ram-Indra area of Bangkok's Lat Phrao district and another 47 at the company's Perfect Place project on Ramkhamhaeng Road in Min Buri district. The houses have a combined value of Bt520 million, and Property Perfect expects to make an initial profit from the deal of 29-30 per cent per unit. This will give the company enough money to kick off six new residential projects this year, including two condominiums.

Property Perfect is also jointly investing with Timberline Investments of Singapore in a new subsidiary called Centrepoint Shopping Mall, with registered capital of Bt1 million. It holds a majority stake of 60 per cent in the venture.

Centrepoint Shopping Mall will occupy a 10-rai land plot on Ratchadaphisek Road. Construction will begin later this year and is expected to be completed in 2010. It will be managed by another Singaporean business partner.

As well, Property Perfect is planning to launch six new residential projects with a market value of about Bt16 billion this year. Two of them will be condominiums and the remaining four single-detached-house projects.

Diversifying the company's business is expected to strengthen its potential and add new business opportunities. It will also help with risk management, since the shopping mall will provide long-term returns.

In terms of business alliances, Property Perfect is working with the Siam Cement Group's Cementhai Home Marts to provide home-repair services for its customers. Its Counter Service has service points in 7-Eleven convenience stores, where Property Perfect's customers may redeem prizes won in the company's games. In the past, Property Perfect has also had co-marketing arrangements with Modernform furniture for customers of its single-detached houses, Index Living Mall for townhouses and SB Furniture for condominiums, as well as with Samsung for special promotions.

Property Perfect will spend more than Bt100 million over the next three years on marketing activities, including a design competition for university students.

Chainid believes condominiums and single-detached houses worth less than Bt5 million will continue to find strong demand and that customers will still want residences in central Bangkok.

He also believes single-detached houses worth more than Bt10 million are poised make a market comeback, because this residential category has been missing from the market for the past three years. However, such a comeback will depend on location. The category usually accounts for 5 per cent of the total market, or about 400 units.

On the other hand, he believes townhouse projects in central Bangkok will see low business opportunities.

Property Perfect expects to achieve Bt9 billion in presales and Bt8 billion in total revenue this year, up 30 per cent rise from last year. Revenue has reached Bt3 billion year to date.

The company wants to achieve Bt10 billion worth of presales next year.

Property reporters

The Nation