New AP projects will be worth B10bn

BackJan 18, 2008

Asian Property Plc (AP) plans to launch at least 10 projects worth 10 billion baht to help it achieve revenue growth of about 10% this year, says chief executive Anuphong Asavabhokin.

"We will launch more low-rise projects than last year to have revenue realisation within the year as revenue from condominiums will be booked over the next few years," he said. "Sales from low-rise units will improve cash-flow management in the short and medium term."

This year competition in low-rise project development would likely be higher on Bangkok's outskirts as the number of land allocation permits rose last year. At the same time, competition in the condominium market would remain stiff among large developers.

In the first quarter of the year, AP plans to launch two low-rise townhouse developments in the Krungthep Kreeta area and home offices on Soi Lat Phrao 71 worth between 300 million and 400 million baht each.

Meanwhile, two of the 10 new projects to be launched this year would be joint-venture condominiums with partner Pacific Star, which holds 49% in a new joint venture with AP holding 51%. They are The Address@Sathon 12 and Life@MRT near the Ratchadaphisek MRT station, worth three billion baht each. AP hopes to launch them by the third quarter of the year.

"Local knowledge is not enough," said Mr Anuphong. "There are many new property investment models overseas. In the next five years, competition in the property market will be beyond the border. We have to get ready for it and take one step in advance."

The company this year plans to visit property projects in which Pacific Star has invested. It would start with projects in Singapore and Malaysia in March and Shanghai in April and May, he said.

"If we get a good government, 2009 will be a good year for the country and the property industry. But competition will get higher," he said.

The overall economy would affect the gross margins of property developers this year, he added. Some firms might see net profit margins in the single digits.

Mr Anuphong said he did not believe a possible rise in interest rates this year would have a strong impact on buying decisions.

At the end of 2007, AP had a sales backlog worth 17.5 billion baht and existing projects for sale worth 6.5 billion baht. It expect to increase revenue to about eight billion baht by the end of 2008, up from around 7.5 billion in 2007.

AP shares closed yesterday on the Stock Exchange of Thailand at 5.30 baht, up 6%, in trade worth 51.7 million baht.

 

Source: Bangkok Post by Kanana Katharangsiporn
Friday January 18, 2008