SET-listed SC Asset Corporation plans to focus on recurring income properties, allocating an annual investment budget for non-residential projects of 15% of the total budget over five years, up from 10%.
Nuttaphong Kunakornwong, the company's chief executive, said the residential development business has been more challenging since last year because of a shortage of funds and a supply glut as demand stagnates.
"It is more difficult to secure funding as everyone is more cautious, including financial institutions, investors, partners and customers," he said.
"The sales rate is slower due to high debt, interest rates and costs, coupled with low economic growth."
This year, SC expects presales to grow to 28 billion baht, from 27.9 billion in 2023, while revenue should marginally increase to 26.5 billion baht by the end of 2024.
It plans to launch 17 new residential projects worth a combined 30 billion baht. These will comprise 15 low-rise housing projects worth 25 billion baht and two condo projects worth 5 billion baht.
The investment budget for 2024 is 25 billion baht, with 15 billion baht allocated for construction and 10 billion baht for land purchases.
Roughly 10% of the total budget will be allocated to hotels and warehouses.
"The budget allocated to recurring-income properties will primarily target warehouses as their construction and acquiring customers are faster compared with hotels, thus enabling revenue generation in a shorter period," said Mr Nuttaphong.
Last year, SC launched its first warehouse, located in Nakhon Sawan and spanning 16,000 square metres. It is used by delivery firm Flash Express.
The company plans to add at least 144,000 sq m in three locations, comprising Bang Na Km 20 and 22, and Laem Chabang.
SC has a hotel with 78 rooms, YANH Ratchawat, in the Ratchawat area and plans to open a second featuring 306 rooms on Sukhumvit Soi 29 called Kromo and managed by Hilton.
The third hotel in Pattaya with 161 rooms is slated to launch next year, he said.
"Our investment budget each year for recurring-income properties is around 10% of the total. We plan to increase this to 15% over the next five years," said Mr Nuttaphong.
"Profit from them is expected to share 26% of overall profit in 2028, growing from 16% this year."
The two non-residential properties are an office for rent with a total lettable area of 120,000 sq m in six towers, and four apartments for rent in Boston in the US, for which it spent US$80 million so far, from a total budget of $100 million.