Supalai bucks slowdown with launches
SET-listed developer Supalai Plc is launching 22 new projects worth a combined 21.54 billion baht in the second half as planned after posting presales growth of 29% to 13.3 billion baht in the first six months of the year.
Managing director Tritecha Tangmatitham said the new projects will comprise four condo sites worth a total of 9.95 billion baht and 18 single-house and townhouse projects worth a combined 11.6 billion baht.
Of the new condo sites, three will be in the middle- to lower-end segment with units priced from 1.5 million baht, or 60,000 baht per square metre on average. Two will be located close to an extension of the Blue Line of the city’s subway system.
“This is the largest segment,” Mr Tritecha said yesterday. “We aren’t worried about purchasing power in this segment as supply has contracted in the first half. Most developers are shifting to the higher end of the market and the central business district area.”
He said Supalai will not launch any new condo projects along the Purple Line because of oversaturation. Fears of a market slowdown have also seen it shy away from condo projects in provincial areas.
The company recorded 13.34 billion baht in presales in the first half of 2017, up 29% from 10.3 billion baht in the same period last year. It aims to hit 27 billion baht by the end of the year, up from 24.1 billion in 2016.
Mr Tritecha said the residential market has posed a challenge for many developers this year but Supalai performed well as it revised its internal process and product designs and launched more new single houses and townhouses in the provinces.
The largest presales growth has come from condo projects in Bangkok, which have risen 50% to 4.54 billion baht, followed by single houses and townhouse in the provinces, which are up 33% to 3.2 billion baht, he said.
Despite the slowdown in condo sales in the provinces, Supalai claims to have bucked the trend by seeing its presales there climb 5%.
“This doesn’t mean the market for condos in provincial areas has recovered. It remains sluggish but the absorption rate is improving because of a lack of new supply,” Mr Tritecha said.
He said the company is on track to meet its targets for unit transfers this year and expects to see 24.5 billion baht in revenue, up from 23.3 billion last year.
One challenge to be met this year is that posed by foreign labour. The government recently issued a new decree on migrant workers to more strongly regulate their hiring, and Supalai has been busy preparing to have them all properly registered at its project sites, Mr Tritecha said.
In October the company will almost double its registered capital to 3.4 billion baht from 1.71 billion to expand business after a years-long lag, he said. This will also help raise its share liquidity and market capital, which stands at 40 billion baht.
SPALI shares closed yesterday on the Stock Exchange of Thailand at 24.30 baht, down 10 satang, in trade worth 320 million baht.