SC Asset trims back on projects

"The downsizing includes cutting units and the budget for each project," Kree Dejchai, chief operating officer, said last week.

The plan to purchase 12 plots for development has also been reduced to nine to conserve cash, he said, adding that the company has to be cautious with new projects to keep abreast of the changing situation.

SC Asset still plans to develop nine projects worth a combined Bt6 billion. Five are single-family home projects worth Bt5 billion, three are townhouse projects worth Bt300 million and one is a condominium project worth Bt700 million. Two out of the nine projects will be launched next quarter.

President Yingluck Shinawatra said the company would reserve about Bt1 billion to buy land for development over the next two years.

SC Asset has no plan to purchase more land this year in order to reserve cash for investment after the economic recovery.

"But if the economic situation gets better, we will evaluate the additional investment again, because we are positive that there is real demand in the market," she said.

SC Asset's land bank holds 250 rai in Bangkok worth Bt2 billion, she added.

Kree said some of the Bt1 billion land budget will be used to acquire a site in Hua Hin for an eight-storey condominium.

This condominium will be SC Asset's first upcountry project. It will be priced at Bt80,000 per square metre. If the land purchase is completed, SC is ready to develop the project this year, he said.

SC Asset has eight projects that are expected to generate revenue for this year. The company has work on hand worth Bt1.5 billion, which will be gradually recognised as revenue from this year to next year.

Yingluck said SC Asset had to act as a middleman between homebuyers and banks in order to help its customers to successfully conclude home-loan negotiations. The company faced a high rejection rate of 28 per cent in the last quarter of 2008, but the rate has gone down to only 5 per cent after the company started helping its buyers secure financing from banks.

"As far as I'm concerned, the government's measures to stimulate the property business are good. However, banks are still cautious about lending. If the government can negotiate with banks to ease lending conditions, it will help home purchases as well as developers to expand ," she said.

Yingluck targets SC Asset's revenue this year to grow at a single-digit rate after rising last year by 20 per cent over the Bt3.5 billion posted in 2007.