Four Pattana expects 20% revenue growth

President Pramote Teerakul said Thailand's predicted meagre growth this year would have little impact on land-owners planning to build a house on their own land.

Most of these people had been planning for a long time before deciding to build.

"We accept that the overall market for home-builders this year will be 5 to 10 per cent lower than last year because customers are delaying their decision to build new homes out of concern that their earnings could drop. But that affects small- and medium-sized [building] contractors more than home-building firms who are members of the Home-builders' Association, because customers now trust us to build their residences," he said.

The association believes that the market for home-builders in Thailand will be worth Bt51.4 billion this year - a contraction of 5 per cent from last year's Bt54.5 billion. But it also believes that its members, rather than building contractors generally, will enjoy an increase in business this year, from last year's value of Bt9.8 billion to Bt10.5 billion. This is because customers wanting to build new homes are increasingly opting for home-building firms rather than dealing with small- and medium-sized building contractors, the association says. In doing so, it claims they are avoiding the risk of losing money or not having their new home completed on schedule.

Four Pattana is aiming for total revenue of Bt610 million this year. Of this, Bt510 will come from its home-building business. Another Bt60 million will come from a new residential project called Baan Busaba, and Bt40 million from a new business unit which will build homes for customers according to their own design.

"We believe that our sales will meet this target because we now have customers who have signed up for new homes worth Bt247 million that will be delivered this year. We also have new customers who are planning to sign contracts with us for homes worth nearly Bt500 million. This will be enough to meet our revenue target this year," he said.

He said the residential project, Baan Busaba, was the company's latest joint venture with a landowner. The project was to be launched early last year, but was delayed by design and licensing issues.

Baan Busaba will now be launched in the current quarter. It will have only 40 detached houses with a collective market value of about Bt200 million. Prices will start at Bt3.7 million per unit. It is Four Pattana's second detached-house development. The first was the successful Baan Chun Ratchada, launched two years ago.

"We decided to launch Baan Busaba this year even though demand for residential projects generally has fallen. However, demand for residences priced between Bt3.7 million and Bt5 million has continued to grow. This project will be a small one, and we expect to sell between 10 and 15 units this year," he said.

Meanwhile, Four Pattana will set up a new subsidiary with registered capital of Bt3 million to build homes under contract to customers who have their own building design.

"We see strong demand from customers who have the design for their house prepared by an architect but they cannot find a good contractor to build it. Earlier, we were approached by some customers asking us to build homes according to their own design but we didn't have the staff to support this demand. Now we have enough staff, so we have decided to establish the new business to serve these customers," he said.

Four Pattana currently has three subsidiaries: Four Development, which builds homes priced between Bt2 million and Bt4 million; Four Interior, which focuses on interior design; and Four Pattana Color Line, which is responsible for advertising and media.

The new business, to be set up in the present quarter, will be the group's fourth subsidiary. It has yet to be given a name.