BANGKOK: Thai property perfect has targeted revenue of Bt20 billion in 2015, Bt18 billion from residential sales and the rest from hotel business.
The firm’s acquisition of Thai Property will be complete by mid-2015, which will give it a major stake in Grande Asset Hotels and Property by July 22, Property Perfect chief executive officer Chainid Adhyanasakul told a news conference yesterday.
He said as much as Bt27 billion of its revenue in 2017 would be from residential sales, and Bt3 billion from hotel business in Thailand and Japan. It plans to launch 24 new residential projects worth Bt29.5 billion this year, 20 of which will feature detached houses and townhouses worth Bt25 billion, three condominium projects worth Bt3 billion, and a villa in Nakhon Ratchasima’s Khao Yai area worth Bt1.5 billion. Of this year’s investment budget of Bt10 billion, Bt2 billion will be used to purchase undeveloped land and the rest spent on construction.
For next year, Property Perfect targets revenue of Bt25 billion, and Bt30 billion in 2017. The company’s 2015-17 investment budget will come from internal cash flow, capital markets, a real estate investment trust (REIT), and bank loans. It aims to reduce its debt-to-equity ratio from 2:1 this year to 1:1 in 2017, Chainid said. Last year, Property Perfect reported revenue of Bt12.78 billion and net profit of Bt363.92 million, up 13 per cent and 689 per cent respectively from 2013.
The firm plans to establish an REIT this year with an initial Bt500 million, selling Uniloft Chiangmai, a dormitory, to the REIT in the second half. It also plans to sell undeveloped land at Krungthep Kretha worth about Bt900 million, which will be booked as revenue this year. Shareholders in April will be asked to approve an increase in the company’s registered capital from Bt5.96 billion to Bt7.9 billion. This will be used to acquire Thai Property. The company also plans to set up an REIT worth between Bt2.8 billion and Bt3 billion next year through the sale of hotels in Japan and Thailand.
Property Perfect will dilute its equity in V Retail from 100 per cent to only 60 per cent. About 40 per cent will be sold to a strategic partner. “All of this is meant to raise capital to support our business expansion between now and 2017,” Chainid said. He said the company was confident of achieving its revenue targets, especially through income from its residential projects, as it has a backlog worth Bt6 billion, half of which will be booked as revenue this year. It also targets presales of Bt18 billion this year, up to 80 per cent from low-rise homes, both detached houses and townhouses.
“The country’s economy has shown signs of recovering, while interest rates may also be lower than last year. These are positive factors to boost demand for homes this year, especially in the middle to upper market, which still has more purchasing power than the lower-priced market, less than Bt2 million per unit,” Chainid said. He added that demand to buy homes costing less than Bt2 million had dropped as household debt rose. As a result, the company will focus this year on the middle-to-upper-income market, people who can afford homes costing more than Bt3 million. There is strong demand in this segment.
