Supalai plans more provincial projects, confident of achieving revenue target
March 24, 2014 00:00
By Somluck Srimalee
Developer plans debenture issue to raise funds for projects worth Bt32 billion
Supalai has set aside an investment budget of Bt16 billion to buy land and to develop 26 residential projects worth Bt32.02 billion this year.
More than half of the investment budget will come from the company’s cash flow and the rest from debenture issues worth between Bt2 billion and Bt4 billion, which will be proposed to a shareholders meeting next month, chief executive officer Prateep Tangmatitham said.
He said Bt5 billion would be used to buy land for development next year, and Bt11 billion to develop infrastructure for the 26 projects it will launch this year.
Eight of these will be condominiums, and the rest detached housing and townhouse projects.
Prateep said that despite the political turmoil’s impact on the economy, which would hold down overall growth of the property market, Supalai still believed it would reach its presale and revenue targets this year. This is thanks to the company’s backlog, homes already sold and set to be transferred to customers.
He said home prices would stay around the same level as last year’s despite higher land and raw-material costs, because of high competition and people’s lower purchasing power.
Supalai targets presales worth Bt22 billion and revenue of Bt20 billion this year, up 14 and 56 per cent respectively from 2013. It has a backlog worth Bt39.23 billion, Bt15.58 billion of which will be booked as revenue this year, Bt14.41 billion next year, Bt6.5 billion in 2016 and Bt2.6 billion in 2017.
The company is balancing its portfolio with launches both in Bangkok and upcountry. This will reduce its business risk from the political chaos, which so far has primarily affected the central business districts of Bangkok.
Supalai is active in six provinces upcountry: Chiang Mai, Phuket, Rayong, Chon Buri, Surat Thani and Udon Thani.
This year, it will also launch detached housing projects in Nakhon Ratchasima and Ubon Ratchathani provinces, company director Tritecha Tangmatitham said.
Outside Bangkok, Tritecha said the company would focus on developing detached houses and townhouses rather than condos because of an apparent oversupply of condominium projects in some provinces.
“We have to wait and see if most of condominium projects launched by other property firms succeed in transferring them to their customers this year or next before we launch condominiums in the provinces again,” he said.