SET-listed developer Major Development Plc (MJD) remains confident about residential demand in the luxury segment, planning to launch a new condo project worth 2.8 billion baht on Sukhumvit Soi 23.
Managing director Suriya Poolvoralaks said although condo buyers in the high-end segment are limited, their purchasing power remains strong despite the economic slowdown. Meanwhile, new supply launched each year has declined due to a lack of plots in prime locations.
Property consultant CBRE (Thailand) said new condo supply in the luxury segment in the inner city, comprising units priced more than 250,000 baht per square metre, fell by over 40% to 2,961 units in the first half from 5,304 in the same period last year.
"Despite the sharp drop in new supply launched in the first half, there are a lot of new projects that developers will launch in the second half as they were busy selling inventory in the first four months to benefit from the property tax incentives," said CBRE managing director Aliwassa Pathnadabutr.
CBRE expects the total number this year will drop by 20% from 9,400 units to 7,000 units as land plots became rare and land prices were so high that developers were reluctant to spend.
Major Development will launch Muniq Sukhumvit 23, a luxury condo project worth 2.8 billion baht, next month. The 36-storey building will be located on Sukhumvit Soi 23, comprising 201 units priced from 6.9 million baht. It expects to have 60% sold by the end of the year.
The project follows Marque Sukhumvit, a condo project worth over 7 billion baht it launched three years ago in a joint venture with two Singaporean investment groups -- GMM Singapore Real Estate Pte and Must International Trading Pte.
Major Development expects to see revenue growth of 40% this year to 5 billion baht after it recorded 3 billion in the first half, up by 50% from 2 billion in the same period last year.
One of the key drivers of first-half revenue growth was the property tax incentives that boosted new sales in the period for completed, unsold units and stimulated unit transfers of some projects that were completed in the first four months.
During the first half, it posted 1.7 billion baht in presales and expects to have 5 billion baht by the year-end, a rise of 20% from 2015.
As of June 30, the company had a sales backlog of 9 billion baht. Of this amount, around 2 billion will be realised in the second half.
MJD shares closed yesterday on the SET at 3.26 baht, unchanged, in trade worth 12.8 million baht.