SET-listed developer Frasers Property (Thailand) (FPT) will continue to weigh its portfolio with a focus on recurring income properties, particularly in the industrial sector, as the residential market is hamstrung by negative factors.
Country chief executive Thanapol Sirithanachai said the economy remains volatile, prompting the need to monitor inflation, interest rates, household debt, political instability and geopolitical tensions.
"Investment has financial costs," he said. "Sometimes opting for caution, making minimal investments or refraining from investment altogether is viewed as a risk mitigation strategy."
This year, FPT plans to launch only seven new residential projects worth a combined 11.6 billion baht, compared with eight projects worth 15 billion last year.
The 2024 plan comprises two luxury housing projects worth 3.7 billion baht, three single detached house projects valued at 6.5 billion baht, a duplex house project worth 950 million baht, and a condo project tallying 450 million baht.
"The single detached house market is now at its peak after growing during the past few years, driven by a large amount of new supply in all price ranges by almost all developers," said Mr Thanapol.
Unit prices of single detached houses were upgraded, but the absorption rate was poor, he said.
As a result, the single detached house market should slow in the next few years, said Mr Thanapol.
Despite fewer townhouse launches last year, a healthy absorption rate occurred for some segments and locations as high household debt affected the majority of target buyers, hampering their ability to secure a mortgage, he said.
"Industrial property is the best segment as it attracts many non-industrial estate developers and is usually stable, with the China+1 policy driving demand," said Mr Thanapol.
This policy encourages companies to avoid investing solely in China, diversifying to other countries, particularly in promising developing economies.
Since trade tension between the US and China ratcheted up in 2018, foreign direct investment in Thailand has increased, with industries relocating here in the electronics, chemical and automotive sectors.
"Headquarters come as the first wave and there will be suppliers from various sectors in large numbers coming in the second wave in the next few years," he said.
Each year FPT has an investment budget of 4 billion baht to expand warehouses and logistics, adding an additional 150,000 square metres in Thailand, Indonesia and Vietnam, where it currently has a total of 3.5 million sq m.
It expects to boost the occupancy rate of warehouses and logistics to 87% this year, from 86% in 2023.
Meanwhile, the occupancy of the hotel business is targeted at 74%, up from 72%, while office and retail occupancy will be stable at 93%.
By year-end, it aims to have 18 billion baht in consolidated revenue, a rise from 16.8 billion baht in 2023, up from 16.3 billion baht in 2022.
Revenue from residential business will rise by 18% to 13 billion baht, after plunging 5% to 11 billion baht in 2023.
The remainder will be from recurring income, with the majority from the industrial business.