Developers take cautious approach

Developers take cautious approach

Several significant projects delayed

An artist's rendition of the Golden Neo Khon Kaen - Bueng Kaen Nakhon project that Frasers Property Thailand launched on May 8.
An artist's rendition of the Golden Neo Khon Kaen - Bueng Kaen Nakhon project that Frasers Property Thailand launched on May 8.

Property developers have become more careful in launching new residential project this year and are focusing on segments where demand is strong as the daily number of Covid-19 cases continues to escalate.

Thongchai Busrapan, chairman of Noble Development Plc, said the company delayed the launch of a new luxury condo project on Wireless Road -- The Embassy at Wireless -- from the second quarter to the fourth quarter as it is a big project worth 10.7 billion baht.

"This project was earlier planned to launch after the Songkran holidays. But with the recent pandemic, we have to wait and see but the postponement would be no longer than six months or when foreign tourists come back," he said.

Other delayed projects will be a low-rise condo and a townhouse project in the Don Mueang area worth a combined 2.2 billion baht, which have been rescheduled from the second quarter to the third quarter this year.

However, the delay of the launch will not have an impact on the company's projection in terms of its presales target this year at 16 billion baht, up 142% from 6.6 billion baht in 2020, as the majority of 2021 presales will come in the fourth quarter.

"At present, it is the bottom of the market but many people can adjust with it," he said. "If the situation in the third quarter is not better and we need to delay the launch again, we will revise down the target."

Noble will diversify to the housing market in the UK through a joint venture with Hong Kong-based Fulcrum Global Investments, one of its major shareholders. Both established Noble Venture Investment in which Noble holds 45% and Fulcrum has 55%.

The first deal worth 100 million baht will be inked by the end of this month which is an apartment project for rent in Manchester. The firm plans to resell individual units to foreign investment buyers, most of whom are Chinese.

It set an investment budget of 2.5 billion baht to invest in the UK residential market over the next three years and expects that profit from the UK investment would represent 25% of total net profit.

Thanapol Sirithanachai, country chief executive of Frasers Property Thailand Plc, said the company's plan to launch 10 new residential projects in the next six months remain unchanged, even though demand faces challenges in securing home loans.

"Before the third wave of the pandemic, we recorded a good presales from new projects launched in the first half," he said. "But now we need to refocus on new projects we plan to launch in the remainder of the year."

He said the firm will be more selective in launching new housing projects by considering locations where demand is strong and purchasing power is still good.

One is a low-rise housing project in Khon Kaen which was not a tourism destination. It recorded 300 million baht in presales on one weekend.

Mr Thanapol said the firm's platform with three different businesses comprising residential, commercial and industrial estate helped minimise the impact from Covid-19.


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