Sansiri turns focus upcountry
Developer to launch 45 projects covering all segments
Property developer Sansiri will focus its business this year upcountry and introduce new products to cover all segments, with housing units ranging in price from Bt1.5 million to Bt20 million.
Revenue is targeted at Bt34 billion to Bt36 billion, the highest since the firm was established in 1984, and up by 15-20 per cent over last year. Sansiri recorded revenue of Bt16.03 billion and net profit of Bt1.19 billion in the first nine months of 2012, and transferred Bt13.75 billion worth of homes to its customers in the last quarter.
The company plans to launch 45 new residential projects worth Bt61 billion this year, 24 of which will be condominium projects worth Bt35.32 billion, 13 will be detached-house projects worth Bt22.5 billion, and eight will be townhouse projects worth Bt2.72 billion. It expects presales of Bt48 billion, up 14 per cent from Bt42 billion last year. Its construction budget is Bt20 billion.
Sansiri has set aside an investment budget of Bt4 billion to buy land for development of residential projects in 2014, president Srettha Thavisin told a news conference yesterday. Half of the investment budget will come from the company's cash flow, and the rest from bank loans and debentures.
The company's senior manager for business development and investment, Varangkana Artkarasatapon, added: "We will issue a debenture worth Bt3 billion this month that will offer interest of not more than 5 per cent."
This will maintain its debt-to-equity ratio at not more than 2.5:1. Currently, the ratio is only 1.5:1.
Srettha said the company's business expansion upcountry would be key to driving its presales to the target of Bt48 billion. Sansiri is already active in such places as Hua Hin, Phuket, Khao Yai, Chiang Mai, Pattaya and Khon Kaen, and will expand into seven new locations: Rayong, Udon Thani, Nakhon Ratchasima, Maha Sarakham, Sri Racha and Bang Saen in Chon Buri province, and Hat Yai district in Songkhla.
He said strong sales and presales upcountry last year showed the demand for homes in the provinces, both for second residences and for investment.
He added that the company would also expand into new segments to cover every market from Bt1.5 million per unit to more than Bt20 million. For example, the company plans to launch dCondo Campus Concept in Chiang Mai and dCondo Old Town Concept. The first project of the Old Town series is in Bangkok's Phran Nok area near Siriraj Hospital.
The company will also launch four new Narasiri projects worth Bt8 billion with units priced at more than Bt20 million in Bang Na and on Rama II, Buddha Mondhol 1 and Srinakarin roads.
"Our business strategy is to develop residential projects in locations close to mass transit, and in communities where there is strong demand to buy homes," he said.
Sansiri also plans to target foreign buyers who do business in Thailand and base their offices here in preparation for expanding their investment in the upcoming Asean Economic Community, Srettha said.
Currently, only 3 per cent of its sales are to foreign customers. It targets raising that proportion to 10 per cent within five years, selling foreigners homes in Bangkok and such upcountry locations as Hua Hin, Phuket, Pattaya, Khon Kaen, Chiang Mai, Udon Thani and Hat Yai. The company is studying expansion of the production capacity of its prefabrication plant, currently 42,000 square metres a year, enough to build about 150 detached houses or 10 condominium buildings.
"The prefabrication system helps us reduce our risk from labour shortage, because it cuts dependency on labour by half from the conventional system. It also speeds up our construction process from an average of eight to 12 months to only 75-90 days," he said.
Currently, the company uses the prefabrication system to build about 60 per cent of its residential projects.
The company may decide to expand its production capacity this year. If it does, Varangkana said, it will spend Bt500 million to build a new prefab plant in the same location as its existing plant in Pathum Thani province.