Supalai downsizes next year's budget for land purchases

The Nation

Supalai has cut it 2009 budget to acquire land for residential projects to Bt2.5 billion from Bt3 billion this year, due to the poor economic environment.

"We have to play it safe next year because we realise that the economic situation will not be good. We'll monitor developments closely and may increase the budget if the property outlook and economic situation recovers," deputy managing director Atip Bijanonda said yesterday.

Supalai's sales in October dropped from the third quarter

due to the impact from the global

financial crisis, he said.

The company will launch four projects worth Bt2.2 billion this month to stimulate sales this quarter.

However, one condominium - Supalai Ville Tiwanon, which has about 1,000 units worth Bt1 billion - has been postponed after the market turned sour. The project will be sold early next year, he said.

"We have been also affected by the economic slowdown. But we don't want to assume that sales in the last quarter of this year will be lower than in the other quarters, because we want to see the result of the four new projects that will be launched this month," he said.

The company is pressing ahead with new projects worth Bt8 billion next year in the hope of boosting revenue by 10 per cent to Bt11 billion, while the overall property market would grow at only zero to 5 per cent, he said.

Supalai's cancellation rate next year might not increase significantly from the current rate of less than 10 per cent, although banks seem to be tightening their loan approvals, as most of its buyers are middle-income and still have good credit, he said.

Supalai is working on both low- and high-rise projects worth Bt14.9 billion that are expected to be booked as revenue over the next three years.