AP commits to condo projects worth B13bn
Recent presales up 250% year-on-year
As Bangkok condo market sentiment improved earlier this year, SET-listed developer AP Thailand has committed to five new condo projects worth a combined 13 billion baht in 2022.
Kamolthip Bumrungchatudom, chief of the condominium business group, said the Bangkok condo market showed good signs over the past six weeks as AP recorded 1.08 billion baht in presales from Jan 1 to Feb 15, soaring 250% year-on-year.
"Our presales were entirely from existing projects as we had no new condo projects launched during the period. Most were either completed or nearly completed projects," she said.
"Condo supply and demand almost match in some locations as developers cut new launches during the past two years."
According to the Real Estate Information Center, the number of new condo supply launched in Greater Bangkok in 2021 and 2020 reached 21,463 units and 29,773 units, respectively, down from 54,769 units in 2019 and 77,289 units in 2018.
The condo absorption rate in Greater Bangkok this year was forecast at 46.5%, improving from 38% last year despite a larger amount of new supply being launched in 2022.
In 2022, the number of new condo supply being launched would total around 37,000 units worth 150 billion baht, up 71% and 146%, respectively, from 2021.
"Condo market had bottomed out since the fourth quarter of last year. With the government's property tax incentives, we will see a significant recovery this year," said Ms Kamolthip.
The five new condo projects AP slated for this year is 61% higher than those in 2021. Three of them will be joint ventures with Japanese developer Mitsubishi Estate Group. Their combined sales value will be 10.4 billion baht.
In the first half of 2022, AP will launch three new condo projects in locations it is confident that there will be strong demand, comprising the Pin Klao-Arun Amarin area, Ratchayothin area and Sukhumvit-Rama IV area with unit prices starting from 2 million baht.
"Mass market condo with prices of 2-3 million baht a unit is in high demand. To avoid mortgage lending rejection, we will work with financial partners to help pre-approve customers' financial qualifications before the transfer period," she added.
As the condo market will be not as intense as its peak period before 2018 or prior to the pandemic, AP aims to have a take up rate of 30-40% during the launch period for low-rise projects and 25% for high-rise ones.
In the Pin Klao-Arun Amarin area, the sales rate of 11 new condo projects launched during 2017-2021 stood at 75%.
It was 87% in the Ratchayothin area from 15 projects and 76% in the Sukhumvit-Rama IV area from 21 projects.