AP turns to low-rise houses
SET-listed housing developer AP Thailand plans for low-rise houses to drive sales this year, preparing to launch 32 new projects worth a combined 47.2 billion baht and aiming for 33.5 billion in presales.
Vittakarn Chandavimol, chief of corporate strategy and creation, said low-rise houses including single detached houses, duplex houses and townhouses will boost presales this year on real demand from buyers with healthy purchasing power.
"This is a challenging year for all business sectors, not only real estate," he said. "We will give more weight to the low-rise segment and will explore opportunities in provinces."
In Nakhon Si Thammarat the company is launching its first low-rise housing project since AP was established 28 years ago. This project will be a mix of single detached houses and duplex houses priced from 1 million baht, projected to launch in the second half of the year.
AP launched condo projects in Udon Thani and Phitsanulok almost a decade ago.
"The low-rise segment remains healthy. Our first eight weeks saw good presales, mainly from low-rise houses," said Mr Vittakarn.
During Jan 1 to Feb 15, 2020, AP recorded 4.23 billion baht in presales, down from 4.4 billion in the same period last year.
Of the amount, 3.5 billion baht was from low-rise houses, a slight drop of 3.2% from 3.6 billion in 2019.
Condo presales in the period posted a decline of 8% to 737 million baht from 800 million as there were new condo projects launched in the same period last year, but none this year.
Of the total new projects being launched in 2020, 33 projects worth 35 billion baht will be low-rise houses.
AP plans to launch four condos worth 12.1 billion baht. Two of them will be joint ventures with Mitsubishi Estate Group, one of Japan's largest property firms.
This year's presales target of 33.5 billion baht has been raised from 32.9 billion in 2019, with the biggest share expected to come from low-rise houses at 22.5 billion, up from 18.4 billion last year. Condos are expected to drop from 14.4 billion baht to 11 billion.
Revenue is projected at 40.6 billion baht, up from 32.4 billion last year, which was 3% lower than the 35.7-billion target.
Revenue from low-rise projects will increase from 56% of total revenue to 67%, while condo revenue will drop to 33% from 44%.
Since 2011 the company's revenue from low-rise houses has grown every year from 6.36 billion baht to 18.1 billion last year.
As of Feb 23, AP had a sales backlog of 51.9 billion baht. Of the amount, 8.3 billion baht was from low-rise houses, which is expected to be completely realised this year.
Some 43.5 billion baht was from condos, with 16.6 billion being realised this year. AP has only 3.2 billion baht worth of unsold completed condo units remaining.