Sansiri plans B24bn domestic expansion

SET-listed developer Sansiri Plc (SIRI) plans to invest 24 billion baht this year in property development and aims to launch 45 new housing projects worth a combined 61 billion baht.

President Srettha Thavisin said yesterday that the new projects would cover all unit price ranges and segments on a nationwide scale as a part of the company's three-year strategic plan to focus on the domestic market.

Of the total investment, 20 billion will be slated for project construction, with 4 billion for land acquisition. Some 30% of funding will come from cash flow, with the rest bank loans.

Sansiri's debt-to-equity ratio was 1.5 times in late 2012, compared with 2.18 in 2011 and 2.30 in 2010. "The domestic market is our focus because demand there is still healthy," he said, brushing aside any expansion plans outside Thailand.

Of the new projects, 70% will be located in Greater Bangkok, with the rest in the provinces.

Mr Srettha said Rayong, Udon Thani, Nakhon Ratchasima, Maha Sarakham, Si Racha, Bang Saen and Hat Yai will be new destinations this year. It will also continue launching new projects in Phuket, Chiang Mai, Hua Hin, Pattaya, Khao Yai and Khon Kaen.

"With stable politics, the country's economy will continue to grow and provincial incomes will rise," he said, predicting the highest growth in low-end property segments.

Srettha: Expects incomes to rise

However, he noted Sansiri is committed to resuming high-end projects after it lost market share in this segment in recent years to SC Asset Corporation, Quality Houses and Land & Houses.

The developer plans to launch four new single-housing projects worth a combined 8 billion baht in this segment at Rama II, Phuttamonthon, Srinakarin and Bang Na areas.

Sansiri targets 36 billion baht in revenue this year, up 30% from 2012. Trinity Securities estimated its 2012 revenue at 26.8 billion with a net profit margin of 10.24%, up from 9.81%.

To support construction of new condo projects and avoid a labour shortage, the firm will apply precast construction techniques to allow a capacity of 42,000 square metres a year, or 10 buildings.

"This should accelerate the construction period to 14 months from the current 16-18 months, excluding waiting for an environmental impact assessment," said Mr Srettha.

Sansiri has a precast factory in Pathum Thani on 47 rai with a maximum capacity of 52,000 sq m, or 150 units a month.

"We will expand the precast factory to build units priced at 10 million baht after it supports the mid to lower-end tiers," he said.

Shares of SIRI closed yesterday on the SET at 3.84 baht, up four satang, in trade worth 533 million baht.

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Writer: Kanana Katharangsiporn
Position: Business Reporter