Business as usual for MK despite turmoil

Business as usual for MK despite turmoil

Developer puts focus on low-rise projects

The SET-listed developer M.K. Real Estate Development Plc will launch four low-rise projects worth a combined 3.2 billion baht this year because it believes single houses and townhouses are more secure and flexible than condo projects amid the political uncertainty.

Assistant managing director Chutima Tangmatitham said the number of new projects and their value will outnumber those in 2013, as the company will do business as usual despite the crisis.

"We will do business under the short-term ups and downs of the economy. If the political crisis ends quickly, we will launch a condo project by the end of the year. If not, it will be next year," she said yesterday.

The condo project worth 1.8 billion baht will be located on six rai in Bangkok's southern zone near the Chao Phraya River. Unit prices will be 60,000 to 80,000 baht a square metre.

The company will maintain liquidity and cap its debt-to-equity (D/E) ratio at lower than 0.5 times as it faces an economic and property slowdown caused by the prolonged political crisis.

As of Dec 31, its D/E ratio was 0.33 times, probably the lowest in the industry. It also had 1 billion baht in liabilities but is confident it can survive any potential crisis as severe as the 1997 financial crisis.

The developer will manage processes and improve construction methods to get faster results with fewer defects.

Ms Chutima said housing demand remained strong but was pent up as prospective buyers were in a wait-and-see situation. The number of visitors to project sites has dropped by 10-20%, while sales have declined to 150-160 million baht a month from 200 million.

A townhouse project on Sukhumvit Soi 62 with 58 units worth 430 million baht will be launched in the first quarter.

Another three projects will be launched in the second half. Single-house projects on Ram Intra Road and near Ekkachai Road will have 105 units and 89 units worth 445 and 650 million baht respectively. The other project will be on Vibhavadi-Rangsit Road with 246 townhouses and single houses worth 1.71 billion baht.

The company expects to have 2.8 billion baht in sales and revenue this year, up from 2.1 and 2.76 billion baht respectively in 2013. In 2012, it posted 1.8 billion baht in sales and 1.72 billion in revenue.

It has a sales backlog of 900 million baht, of which 800 million will be realised this year.

Shares of MK closed yesterday on the SET unchanged at 3.50 baht in trade worth 2.37 million baht.

Do you like the content of this article?
COMMENT