Supalai sticks to full-year targets despite sluggish first quarter

Real Estate March 15, 2014 00:00

By Somluck Srimalee
The Nation

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Listed property developer Supalai is maintaining its presales target of Bt30 billion and total revenue goal of Bt20 billion for this year, even though presales in the current quarter are about 5 per cent below the estimated level due to many home-buyers d

“Our presales in January were down by about 15 per cent from the same period last year, while February demand recovered to nearly the same level as a year ago. As this month looks to be better than the first two months of the year, we believe our presales will be only 5 per cent below target during the first quarter,” said managing director Atip Bichanond. 
   However, Supalai expects its first-quarter total revenue to hit the target of nearly Bt4 billion, thanks to customers having continued to have their homes transferred on time.
   “Only 4 per cent of our customers have been unable to get a bank mortgage, which is well below the market average of more than 20 per cent. This means most of our customers have financial statements qualifying them for a housing loan from the banks,” he said. 
   Having delayed the launch of new residential projects in the first two months of the year, the developer has now launched three projects worth Bt3.17 billion combined. 
   Two of the projects – together worth Bt1.9 billion – are for detached housing on Bangkok’s Srinakarin Road and in Rayong province, while the third is the Supalai Loft Chang Wattana condominium .
   They will boost Supalai’s first-quarter presales to Bt4 billion, he said, adding that they are part of its 31 residential projects worth Bt30 billion set to be launched over the course of the year.
   Twenty-four projects will be developed by Supalai itself, and the remaining seven by its subsidiary. Fifteen will be located in the provinces, as the others in greater Bangkok. 
   Twenty-two of them are detached housing and townhouse projects, and the other nine are condominiums. 
   Atip said the company had decided to launch projects in accordance with its business plan over the remainder of the year despite the ongoing political turmoil.
   “Our business must go ahead in spite of the country’s political turbulence, as we had already been waiting [for a resolution of the problems] in the first two months of the year,” he added.
   The three projects that have been launched so far this year have received positive feedback from the market, with presales worth Bt2 billion from these as well as existing projects. 
   The MD said the Monetary Policy Committee’s decision this week to cut the policy interest rate by 25 basis points would help home-buyers to reduce their costs by about 2 per cent on average. 
   That would normally give a solid boost to residential demand, he said, but it is now likely to have less of an impact on the market as many home-buyers are delaying their purchasing decisions out of concern over their future earnings amid the prolonged political uncertainty.