Developers plan projects in flood-free areas of Bangkok

Small and medium-sized property firms plan to launch their new residential projects in Bangkok locations that did not face last year's severe flooding.

MK Real Estate plans three projects worth a total of Bt1.9 billion on Rattanathibeth, Charan Sanitwong 3, and Vibhavadi-Rangsit roads.

Narai Property plans four projects worth a total of Bt5 billion on Srinakarin Road.

Ananda Development will launch four condominium projects worth a total of Bt10 billion on Sukhumvit Road.

"We decided to launch our new projects in locations that were not hit by the flood because many home-buyers are still concerned about flooding," MK Real Estate president Chuan Tangmatithum told a news conference yesterday.

He added that the company's presales last year missed the target of Bt2.8 billion, reaching only Bt1.6 billion, as it could not build homes and deliver them to customers on time because of the shortage of construction materials due to the flooding in Bangkok and neighbouring provinces.

However, most of its customers have maintained their contracts and are waiting to take possession of their homes this year. As a result, the company has a backlog worth Bt1.2 billion of homes awaiting transfer to buyers this year, he said.

He added that MK Real Estate targeted sales revenue of Bt3 billion this year, up nearly 100 per cent over last year. This will come both from its 17 existing projects worth Bt4 billion and the rest from the three new projects worth Bt1.9 billion that will launch this year.

To meet its presale target, the company has set aside a marketing and promotion budget of Bt240 million, or about 8 per cent of its total sales target, Chuan said.

The company has also budgeted Bt1 billion to buy undeveloped land this year for projects to be launched in 2013, plus another Bt1 billion for construction of this year's projects.

MK's board of directors and shareholders have approved the issue of debentures worth Bt3 billion. This will provide flexibility for the company to manage its cash flow to serve its business expansion over the next two years, he said.

Meanwhile, Narai Property deputy managing director Jenchai Limwattanakul said demand for homes in flood-free locations was growing strongly, as seen from its presales of its Bt670-million townhouse project on Sathupradit Road last month, which were 90 per cent of total project value. As a result, the company believes that when it launches its four new projects this year in areas that were not flooded, it will enjoy positive feedback from the market. This will drive its revenue to Bt2.5 billion this year.