THE PROPERTY sector is likely to generate high returns next year, according to researchers at brokerages.
Tisco Securities Co Ltd suggests that investors should move into property sector now that the sector has shown signs of recovery that point to strong growth in 2018. The company especially likes Land & Houses Plc, Quality Houses Plc and Pruksa Holding Plc.
Tisco notes that these developers have built low-rise housing such as single-detached houses, twinhouses and townhouses. This strategy will help them generate income faster than would be the case with condominiums, which typically take more than two years from a construction start until the transfer to customers. As well, share prices in the sector this year are lower than that suggested by the companies’ fundamentals, the brokerage said, adding that this could stoke the interest of some investors.
The Tisco research also said that the government’s proposed investment in big infrastructure projects – due to start in 2018 – would boost demand for residential projects around the new mass transit routes.
Property firms also plan to launch more new residential projects, including for condominiums and low-rise resident projects such as single-detached house, twinhouses and townhouses in 2018 around existing and proposed mass transit routes.
This trend would spur their presales growth next year. The developers also show signs of boosting their revenue in 2018, compared with this year, as most of their property backlog will be transferred to customers over the coming year. This is especially so for condominium projects that launched in 2016, the research said.
Yuanta Securities (Thailand) Co Ltd forecasts that Quality Houses Plc will announce net profit Bt961 million for the fourth quarter of this year, up 13 per cent from the third quarter of this year and 42 per cent from the same period of last year, thanks to the transfer of its condominium projects – the Trust @ BTS Erawan startion, worth Bt3.4 billion, and Casa @ MRT Bangyai station, worth Bt1.7 billion. This would drive Quality Houses Plc’s total revenue and net profit in the last quarter of this year to a record high.
Bualuang Securities Plc analyst Naramol Eaksamut said that in November, most of the listed property firms launched more residential project to boost their sale in the last quarter of this year, compared with the first three quarters of this year. This will boost their presales in the last quarter to growth of up to 15 per cent from the same period of last year. The top nine firms that launch more residential projects in the last quarter of this year include Ananda Development Plc, AP (Thailand) Plc, Land & Houses Plc, LPN Development Plc, Pruksa Holding Plc, Quality Houses Plc, SC Asset Corporation Plc, Sansiri Plc, and Supalai Plc, Naramol said.
Sansiri Plc’s chief operating officer Uthai Uthaisangsuk said that the company had sold out its two condominium projects under the brand D Condo at Chiang Mai and Phuket, for a total of Bt3.3 billion. The success comes as it seeks to hit a presales target of Bt40 billion by the end of the year.
“Demand in the residential market in both Bangkok and suburban areas is still strong in the last quarter of this year. This will boost our presales to achieve the target at the end of this year,” he said.