SET-listed developer AP Thailand Plc continues its focus on single houses and townhouses to drive presales growth for another year, planning to launch 34 new projects worth a total of 43 billion baht, with 30 sites in the low-rise segment.
Chief executive Anuphong Assavabhokhin said the condo market has been sluggish since last year, with a sharp contraction from the lack of foreign buyers, particularly Chinese, who were big spenders in Thailand.
"In the first half this year, condo market sentiment remains poor," he said. "Developers with a large number of unsold condo supply will continue draining the stock. The market will resume in the second half."
While condo demand will likely shrink for the year, new supply scheduled to launch in 2021 faces difficulty in procuring project finance as banks become more careful about pre-finance, said Mr Anuphong.
During Jan 1 to Feb 15, AP recorded 4.5 billion baht in presales, up 37% from the same period last year.
The key driver was low-rise houses with a growth of 50% to 4.1 billion baht while condo presales stood at 400 million baht.
Last year, AP's presales stood at 31.7 billion baht, below its target of 33.5 billion because of condo presales of only 3.82 billion, below its target of 11 billion. AP targets 35.5 billion baht in presales in 2021, up from 32.9 billion in 2019. Its presales peaked in 2018 with 41.3 billion baht.
However, presales of low-rise houses outperformed its target of 22.5 billion baht, tallying 27.8 billion.
This year AP plans to launch 30 new low-rise housing projects worth a combined 28.8 billion baht, comprising 14 single detached house projects worth 16.5 billion baht, 14 townhouse sites worth 10 billion, and two projects worth 2.3 billion in Chiang Rai and Ayutthaya.
There are four condo projects -- two have a combined worth of 10 billion baht as joint ventures with Japanese developer Mitsubishi Estate.
As of the end of 2020, it had a sales backlog of 37.9 billion baht. Of this amount, 12.5 billion baht was from low-rise houses that are scheduled to be realised this year. Another 25.5 billion baht is from condos booked from 2021-23.
AP expects to have 43.1 billion baht in revenue this year, comprising 28 billion from low-rise houses, 14.1 billion from condos and 1 billion from non-residential business.
Last year it recorded 46.1 billion baht in revenue, up from 32.5 billion in 2019 and exceeding its target of 41 billion baht. It was the company's highest revenue in its 30 years of operation, mainly attributed to the low-rise segment.
With a strong financial status including a debt-to-equity ratio of 0.7 times as of the end of 2020, down from 1.09 in 2019, and 14 billion baht in cash, AP plans to spend 12 billion baht to buy new land plots this year, up from 4 billion in 2020.
Anuphong Assavabhokhin, chief executive officer, AP Thailand Plc