AP (Thailand) has maintained its launch schedule for 19 residential projects worth Bt23.7 billion this year after residential demand re-emerged this month and shows signs of picking up throughout the year.
“We saw the market starting to recover in the last two weeks. The number of customer visits [to AP projects] increased by about 20 per cent. More than 20 per cent of them were ready to make the decision to buy. This is better than the last six months during the political conflict,” chief marketing officer Vittakarn Chantavimol said yesterday.
Seven of the projects worth Bt10.52 billion came out in the first five months, boosting presales by 26 per cent to Bt7.5 billion from the same period of last year.
About 44 per cent were for condominiums and the rest for detached homes and townhouses. This shows that residential demand has continued to gain momentum despite the political turmoil and economic stagnation.
Four projects worth Bt5.32 billion will debut this month, leaving the last eight projects worth Bt7.86 billion for the second half. They will lift presales 38 per cent to the target of Bt21 billion this year from Bt15 billion last year.
The company is also keeping its 2014 revenue target at Bt21 billion after recording revenue of Bt3.5 billion and net profit of Bt259.7 million last quarter.
AP was carrying a backlog of Bt24 billion as of May 31, of which Bt15 billion will be booked as revenue this year and the rest in the next two years.
“Our reject rate was only 10 per cent on average. That is still lower than the industry, so we believe that we can transfer our units and generate revenue to meet our target,” Vittakarn said.
Three of the four launches this month are three-and-a-half-storey townhouses worth Bt4.27 billion under the Baan Klang Muang brand. The project at Suksawat is worth Bt2.2 billion, while Vipawadee is worth Bt1.29 billion and Radchayothin Bt780 million. They will open for reservations from June 28-29.
The last project this month will be Palazzo Ratchaphreuk worth Bt1.05 billion, consisting of detached homes.
Overall, new residential projects in Greater Bangkok dropped 17 per cent in April and May, but this was still better than the first quarter, which declined 40 per cent. This means developers had gained enough confidence to start rolling out residential projects this quarter, especially with the coup, as they believe the country’s political situation will become more stable than before.
However, the military’s ruling National Council for Peace and Order has a policy to crack down on migrant workers. This directly hits the real-estate industry, which depends heavily on foreign labour.
“We will discuss with our subcontractors what to do if they face a labour shortage from this policy. However, at this time we can manage our construction on time,” Vittakarn said.