SET-listed developer Ananda Development Plc will launch five serviced apartment projects in Bangkok and Pattaya over the next six months as a diversification to more resilient residential development business.
Chief executive Chanond Ruangkritya said the serviced apartment projects, in which the company co-invested a total of 12 billion baht with Japanese developer Mitsui Fudosan, will boost recurring income to account for 20% of total revenue in the next five years.
"The housing market relies on people's income. Homebuyers will spend if their income is robust. If the tourism market cannot come back, their purchasing power will be frozen too," he said.
The Covid-19 impact caused a sharp drop in hotel occupancy to 27%, but that of serviced apartments was 50% as their targets were mostly long-stay guests.
The five serviced apartment projects will include Somerset Rama 9 with 445 rooms, being launched this month after a delay from last year due to the unfavourable tourism market.
The rest will be launched in the second quarter next year, comprising 451-room Ascott Thonglor, 393-room Ascott Embassy Sathorn, 196-room Lyf Sukhumvit 8 and Somerset Blue Coast Pattaya with 324 rooms.
"Despite reopening last month, we will wait for a full return of foreign tourists in the second half next year before launching our projects on Sukhumvit Soi 8 and Pattaya," said Mr Chanond.
Ananda expects to have an occupancy rate at the five serviced apartments ranging from 40-65% by the end of 2022.
Phattarachai Taweewong, associate director of research and communications at property consultant Colliers International Thailand, said overall serviced apartment occupancy this year dropped from 2020 as some long-stay customers cancelled their contracts.
"In 2022, the serviced apartment market will improve as more foreign tourists, expats and overseas investors can travel to Thailand more easily," said Mr Phattarachai.