LISTED PROPERTY firm AP (Thailand) Plc has allocated an investment budget of up to Bt10 billion a year from the year 2019-2022 to achieve total revenue of Bt60 billion in 2022, the company’s chief executive officer, Anuphong Assavabhokhin, said.
This year, the company has budgeted Bt9.5 billion for purchase of land to develop residential projects in 2020.
Meanwhile, the company also has plans to invest Bt1 billion over the next three years in three new businesses that it expects will generate recurring income of Bt6 billion in 2022, he said.
To support the aggressive investments this year, the company plans to raise Bt4 billion from the issue of debentures to meet its target of keeping cost of finance at not over 3 per cent. The current interest cost is 2.8 per cent, he said.
The three new businesses are SEAC, Vaari, and Claymore in which AP (Thailand) Plc holds a 100-per-cent stake.
SEAC is a learning centre that creates training courses for people who want to gain experience and also improve their professional skills at a time of rapid digital and technological changes in their businesses. This company has a registered capital of Bt300 million. Set up last year, it operates in collaboration with a world class university in setting up training courses.
Vaari is the creator of an ecosystem that supports quality-of-life management. It will offer property management services that match the demand of customers by collaborating with other service providers and startups. The company has a registered capital of Bt30 million.
Claymore is a creator of design innovations that meet the different needs of residents. This will be a collaboration with startups both here and overseas to serve the different needs of residents. The company has a registered capital of Bt5 million.
“We expect the three new business to generate recurring income of up to Bt6 billion in 2022, or about 10 per cent of our total revenue target of Bt60 billion in that year,” Anuphong said.
He added that the company had decided to expand and try a new business model by targeting sustainable growth over the long term as technology and digital developments are disrupting all industries. He said property firms also have to move to disrupt themselves and find ways to sustain growth over the long term.
“Developing residences for sale will remain our core business as it generates up to 90 per cent of our total revenue. However, a new business model will drive sustainable growth in the long term,” Anuphong added.
In keeping with the growth of its core business, the company plans to launch 39 new residential projects worth a combined Bt56.8 billion this year. Five of the 39 new residential projects will be condominiums worth Bt22.4 billion. Three of five condominium projects will be developed as a joint venture with its Japanese partner, Mitsubishi Estate Group. The projects will be worth about Bt18.3 billion. It will develop the other two projects, worth Bt4.1 billion, on its own. The balance 34 projects will be low-rise residences, including single-detached houses, twin-houses and townhouses worth a combined Bt34.4 billion, he said.
The company expects its total presales this year to see 10-per-cent growth over 2018, with record total presales of Bt41.3 billion. The company also expects total revenue to grow by up to 15 per cent this year compared to last year.
In 2018, the company was successful in transferring its residential projects to customers, clocking up a 30-per-cent growth year on year, thanks to strong demand in the market. Up to 50 per cent of them came from condominium projects and the balance from low-rise residences.
Meanwhile, up to 60 per cent of condominiums transferred to its customers in 2018 were developed as a joint venture with its Japanese partner, he said.
At the end of 2017, the company had reported total revenue of Bt22.85 billion and net profit of Bt3.15 billion. In the first nine months of 2018, the company reported total revenue of Bt19.98 billion with net profit of Bt2.9 billion, up 36.75 per cent and 62.92 per cent respectively year on year.