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Listed developers see sharp Q1 rise in inventory

Average increase of 9% over end-2013 level, with Pruksa, Sansiri and Land & Houses topping the table

Twenty listed residential property firms have reported a combined inventory worth Bt339.84 billion as of March 31, comprising projects under development, undeveloped land and ready-for-sale projects.

The stock is worth 9.29 per cent more than their inventory at the end of last year, and would take more than three years to sell out if no new projects were to be launched during the period.

Meanwhile, residential demand in the first quarter fell by 40 per cent.

According to their first-quarter financial results, most listed developers saw their inventory rise compared with the December 31 level.

The average rise in value of more than 9 per cent covers new residential projects that have been launched, land bought for residential development in the future, and existing projects for sale.

Pruksa Real Estate and Sansiri posted the joint-highest inventory value at Bt51.88 billion as of March 31, up 6.57 per cent and 13.72 per cent respectively from the end of last year.

They were followed by Land & Houses, whose inventory of Bt42.02 billion was up by 9.17 per cent, and AP (Thailand) with Bt32.17 billion, 4.51 per cent higher.

Pruksa Real Estate president and CEO Thongma Vijitphonpun said the rise in the company's inventory was due to its expanded investment, after it had bought land for developing 50 new projects set for launch this year, while ready-for-sale stock was worth less than Bt1 billion.

"All of our inventory is in the construction phase, either for infrastructure or the development of residential projects for sale," he said.

This ties in with the company's total backlog worth Bt38.02 billion as of March 31, while presales came in at Bt10.3 billion in the first four months of the year, he added.

Quality Houses president and CEO Rutt Phanijphand said the company's higher inventory matched its Bt9-billion backlog of homes undergoing construction and set to be delivered to customers this year and next.

"Our inventory has risen in line with demand growth," he said.

Lalin Property CEO Chaiyan Chakarakul said the company's inventory as of end-March had increased only 2.4 per cent from the end-December level.

This is because the developer delayed the launch of new residential projects from the first to the second quarters of this year. It plans to launch between six and eight projects worth Bt4 billion combined over the course of the year.

Lalin Property transferred homes to customers in line with its business plan during the first quarter, generating revenue of Bt655.6 million in the process - up 5 per cent from the same period last year, he said.

Meanwhile, Tisco Securities' analysis of the property sector found signs of a recovery in the second half of the year, with the securities house targeting full-year presales of Bt181 billion.

This represents more than half of the listed developers' inventory at this time. However, all listed property firms will add to their inventory by launching new residential projects worth more than Bt250 billion combined this year.

Asia Plus Securities senior vice president Terdsak Thaweethiratham said the financial results of listed property firms for the first quarter had showed only slight growth because, out of the condominium backlog worth Bt88 billion scheduled for transfer this year, only Bt14 billion worth of units were delivered to customers in the first quarter.

Meanwhile, overall inventory has risen in the current quarter after most property firms began to launch residential projects deferred from the first quarter, he said.

However, demand has risen more slowly than the number of units coming onto the market during this period, he added.


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