In its best bid to avoid a construction delay amid a contractor shortage, the SET-listed developer Asian Property Development Plc (AP) has assembled a contractor management team to attract contractors and persuade them to finish their jobs.
An example house of AP’s Soul Ekamai-Ladpraw project.
Vittakarn Chandavimol, the chief marketing officer, said the team was set up six months ago under the company's supply chain management unit to deal with contractors directly.
"Five years ago it was a developer's market, as we had more bargaining power. Now it belongs to contractors," he said.
"To draw contractors, not only are better incentives and welfare such as higher cash advances needed but also good management."
The team's job includes managing the construction work and circulating the jobs so each contractor will have regular work.
A major demand for contractors is consecutive jobs in order to sustain their business, said Mr Vittakarn.
Vittakarn: Contractors have the upper hand
Another is standard design, which helps them construct projects faster with fewer defects.
"Many contractors prefer constructing buildings with a general or standard design they are familiar with, something they can construct without opening their eyes," he said. "They don't like to fix jobs later."
The team is derived from the company's procurement and supply chain management divisions, supervised by a Thai former supply chain head at Mead Johnson Nutrition in Singapore.
The group will find more labourers if contractors need them. However, AP will try to apply precast construction techniques as much as possible to reduce the labour shortage problem.
Low-end condos and townhouses use precast methods, while high-end condos and single houses still use conventional methods.
In a related development, AP will next month launch the 1.5-billion-baht Soul Ekamai-Ladpraw next month.
It will be located on a 26.3-rai site near Bodindecha School on Ramkhamhaeng Soi 43/1 or Lat Phrao Soi 112, with 82 three-storey single houses priced at 18-25 million baht each.
Though condos priced 1.8 to 1.9 million baht could be built there, AP chose to develop high-priced single houses instead due to the high land prices of 60,000 baht a square wah.
Condo development generates a higher gross margin and net profit, but single houses have a higher initial return rate, as condos take at least three years to realise revenue where a single house takes only six months.
During this year's first quarter, AP recorded 3.8 billion baht in presales, beating its target of 3.6 billion, as low-rise housing contributed 2.2 billion baht.
It expects 9 billion in sales in the first half and 24 billion for the whole year.
In mid-May, AP will change its name to AP (Thailand) Plc, spending 300 million baht on rebranding.
Shares of AP closed yesterday on the SET at 8.50 baht, down 25 satang, in trade worth 111 million baht.