Nirvana woos investors

Nirvana Development Co, a subsidiary of SET-listed Singha Estate Plc, will shift to development for investment purposes, joint ventures with landlords and homebuilding for the upper-end segment.

Sornsak Somwattana, chief executive of Nirvana Development, said there is ample opportunity for property development for investment as many mid-sized investors are looking for alternative investments with an attractive yield because of defaults on bills of exchange (B/Es).

“Over the past few months, we saw a trend of investors shifting to property at our home office project launched last October,” he said. “These buyers were investors acquiring units for rent.”

The company will look to tap apartments for rent and parking lots. The yields are estimated at 7% per year for these, compared with 5% from B/Es.

For apartment buildings, the company will seek land plots sized around four storeys with 40-50 rooms worth between 30-60 million baht a project.

It is also poised to forge a joint venture with landlords to develop single-house, townhouse or home office projects on their plots sized from 15 rai. This can help Nirvana expand with new projects at many sites, said Mr Sornsak.

Nirvana will also introduce housing designs it developed to customers for high-end projects following its merger with MAI-listed construction materials manufacturer and homebuilder Daii Group Plc completed last month.

“The synergy of Nirvana and Daii will result in the business expansion of both,” said Mr Sornsak, also head of Daii.

He said Nirvana will expand from only residential development in the high-end segment to home building and housingrelated construction materials.

With Daii’s precast production factory, Nirvana will tap the mid to lower-end housing market, priced from 3-8 million baht a unit. It will also apply precast techniques to its property development for investment business.

Daii has three businesses: homebuilding under the Deeji brand, precast houses under the Ginza brand and housing-related materials comprising fences under the Fenzer brand and aluminium doors and windows under the Atech brand.

Daii is projected to record 4.5 billion baht in presales this year, including 3.9 billion from Nirvana and 600 million from Daii, said Mr Sornsak.

In the first nine months last year, Daii recorded 254 million baht in revenue with a net loss of 10 million baht, down from 305 million and a net profit of 10 million in the same period of 2015.

Nirvana plans to launch three residential projects worth a combined 8.5 billion baht this year including a luxury riverfront condo with a branded hotel on Charoen Nakhon Road in Khlong San area.