SC Asset to finally dip toes in low-end mass market
SET-listed developer SC Asset Corporation Plc plans to shift to the low-end segment, meaning units priced below 3 million baht, and establish a venture capital firm for property technology.
The company expects to launch 17 new projects worth a combined 27 billion baht in 2017.
Chief executive Nuttaphong Kunakorn-wong said it would be SC’s first foray into the low-end segment. The company hopes the strategy will enable it to achieve 20 billion baht in revenue by 2019.
“We will develop low-rise products in all pricing segments from this year onwards,” he said. “As the low-end segment is a mass market with the largest customer base, we will improve our internal processes to support more customers.”
SC’s customer base totals 13,000. It had the largest market share for high-end single detached houses — units priced from 20 million baht — with a 15-20% share and a value of 12.3 billion baht last year.
SC had a market share of 10% each in single detached houses priced from 5-10 million baht and 10-20 million. Those segments last year had a market value of 40 billion baht and 12.3 billion, respectively.
It had only a 1% share in units priced from 3-5 million baht and no share in units priced below 3 million. Those segments had a market value of 33.8 billion baht and 4.1 billion, respectively.
In the third quarter this year, SC will launch its first low-end project with a new brand on Phetkasem Soi 81. It is worth 500 million baht, located on a 20-rai site where it plans to develop 200 units priced from 2 million baht a unit.
“The high mortgage rejection rate in the low-end market concerns us,” said Mr Nuttaphong. “We will check customers’ financial health within two weeks after they decide to book a unit so we can re-sell the unit faster if the mortgage is rejected by banks.”
SC aims to raise the proportion of its lowrise development, for units priced below 5 million baht, to 17% in 2019 from 10% last year. Units priced from 5-20 million baht will continue to make up 50%, while units priced 20 million baht and above will dip to 33% from 40%.
In the luxury segment, SC plans to launch two new brands — Headquarters and The Gentry — and will develop new brands in the inner city to maintain its market share, he said.
The company set an initial budget of at least 50 million baht this year to invest in startups that develop tools or solutions related to quality, innovation, services or marketing to support its residential development business. It also plans to spend 16 billion baht this year, split equally on construction and land acquisition.
SC shares closed yesterday on the SET at 3.60 baht, up eight satang, in trade worth 37.7 million baht.