2014/07/08 in Latest news - 34
Sansiri backs revival with rash of launches
Projects worth B23bn reflect new confidence
SET-listed property developer Sansiri Plc (SIRI) is confident revenue will reach 34 billion baht this year, as it is launching 13 new residential projects in the second half based on a market recovery.
Apichart: Market on way to recovery
The 13 new projects will be worth a combined 23.6 billion baht, with eight condominiums and five projects with detached houses or townhouses.
"The overall property market is improving after political tensions eased late in the second quarter, and this will encourage potential buyers to make a purchase," said chief executive Apichart Chutrakul.
The company believes if the market recovery continues for the rest of the year, it can meet its revenue target of 34 billion baht, up from 23 billion last year when net profit was 1.92 billion.
During the first half, Sansiri introduced only six new projects and generated only 4 billion baht in sales as the economic slowdown and political turmoil led to poor market sentiment.
The company has a presales backlog worth 54 billion baht, mostly from condominium projects, which it is expected to realise over the next 3-4 years.
Of the total, 19.5 billion baht will be booked this year, 23 billion next year, 10 billion in 2016 and 1.5 billion in 2017.
It also adjusted its sales policy by selling more off-plan residential units to reduce its large inventory.
"We want to diversify risks because the economic slowdown and political uncertainty negatively affected consumer confidence and made us carry more finished units as inventory," said Mr Apichart.
Sansiri's unit inventory is valued at 8 billion baht.
Over the past two years, Sansiri has developed 166 residential projects worth a combined 146 billion baht. Among them, 116 projects worth 60 billion are under construction while the rest are fully completed. Of the total units, 58% have been sold.
Mr Apichart said the property industry had notably slowed since the third quarter last year as increasing household debts and political instability affected consumer confidence.
Moreover, the rejection rate on housing loans by banks has risen to 8-10% from 6-8% last year, particularly for those who bought houses worth 1-1.5 million baht.
The company expects to launch 19 new projects in 2014.
SIRI shares closed yesterday on the SET at 2.20 baht, down four satang, in trade worth 353 million baht.
Source: Bangkok Post
