Thai­land de­vel­oper scal­ing back new projects

Gulf Times Business - - BUSINESS -

Alead­ing Thai res­i­den­tial de­vel­oper is scal­ing back its am­bi­tions for new projects this year, as mort­gage curbs and a weaker econ­omy dim the out­look for Bangkok’s once-boom­ing con­do­minium mar­ket.

Sena De­vel­op­ment Pcl ex­pects to start mar­ket­ing 13 res­i­den­tial projects worth about 10bn baht ($313mn) in 2019, but would have pre­ferred to launch more, deputy chief ex­ec­u­tive of­fi­cer Kes­sara Thanyalak­park said in an in­ter­view Fri­day.

“All the neg­a­tive news about prop­erty and the econ­omy led us to be more cau­tious,” Kes­sara said. “There’s been a shift to fo­cus more on the qual­ity of new buy­ers rather than quan­tity, to avoid peo­ple who aban­don pur­chases or strug­gle to get mort­gages.”

Parts of the Bangkok home mar­ket have al­ready started slow­ing, with builders forced to rely more on for­eign­ers for busi­ness, ac­cord­ing to CBRE Group Inc.

Gov­ern­ment Hous­ing Bank, Thai­land’s top mort­gage lender, sees sales of new houses and con­do­mini­ums in the cap­i­tal drop­ping 13% this year.

Prop­erty mar­kets have cooled around Asia, from Syd­ney to Mum­bai. The Bank of Thai­land, which raised its bench­mark in­ter­est rate for the first time since 2011 in De­cem­ber, will im­pose stricter mort­gage-lend­ing rules from April to tame spec­u­la­tion.

Trade-de­pen­dent Thai­land’s eco­nomic growth slowed in the third quar­ter and the US-China trade war threat­ens to sap the ex­pan­sion this year too.

Sena De­vel­op­ment still ex­pects earn­ings growth of about 20% in 2019, as sales of older projects com­plete. A part­ner­ship with Ja­pan’s Hankyu Han­shin Prop­er­ties Corp to de­velop con­do­mini­ums in Bangkok will be the ma­jor con­trib­u­tor to earn­ings growth in the next few years, said Kes­sara.

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