Supalai optimistic amid gloomy signals
34 projects in the pipeline for this year
SET-listed developer Supalai Plc is upbeat this year despite a rash of negative factors such as new lending curbs, rising interest rates and an uncertain economy. Managing director Tritecha Tangmatitham said the company plans to launch more projects than last year, with 34 sites in Bangkok and provinces nationwide worth a combined 40 billion baht, aiming for presales growth of 5% to 35 billion baht by year-end. “Many [developers and experts] expect stagnant market growth as some homebuyers are expected to be affected by negative factors,” he said. “As new supply being launched this year will likely drop, this is a chance for us [to launch more projects].” Last year Supalai launched 25 projects worth a combined 26.0 billion baht, lower than its goal of 35 projects worth 40 billion baht. Ten projects worth 14 billion baht were postponed from the fourth quarter last year to this year as presales met their targeted level. The company expects to have 35 billion baht in 2019 presales and 28 billion in revenue, up 5% from 33.3 billion and 7% from an estimated 26 billion, respectively. Presales and revenue in 2018 rose from 30.8 billion baht and 25.8 billion, respectively. He said presales last year was on the rise and higher than the target of 33 billion baht as it was driven by both condo and low-rise (single detached house, townhouse and semi-detached house) segments. The company will also spend 8 billion baht to buy new plots and 9.8 billion baht for construction in 2019, up from 5.1 billion baht and 9.4 billion baht invested last year, respectively. Of t he 34 new projects being launched this year, the highest in the company’s history, six will be a condo in Bangkok, 13 low-rise sites in Greater Bangkok and 15 low-rise projects in provinces. “The new lending curbs will have a minimal impact on our customer base, the majority of whom are those buying first homes,” said Mr Tritecha. “Lower than 10% of our customers will be impacted.” He said the down payment rate for the company’s condos will be maintained at 16-18% of the unit price as an additional payment of 2-4% of the unit price that customers may be required by the new lending curbs, is not difficult for them. Chief executive Prateep Tangmatitham said Bangkok land prices will cool down this year as many developers that have made aggressive land acquisitions will slow down new purchases. “Some developers dared to buy plots high prices in the hope that condos developed on those plots can be sold at a high selling price as well,” he said. “Those developers have never experienced a crisis like the 1997 financial crash.” This year it may be not easy to sell condos at a high price per sq m as demand turns to affordable unit prices, lower than 100,000 baht per sq m. As a result, developers’ appetite for land will decline while landlords will likely cut the land price. Of Supalai’s six new condo projects being launched this year, five will be priced affordably, lower than 100,000 baht per sq m. Only one will have a unit price of higher than 200,000 baht per sq m, Supalai Icon, which will be located on Sathon Road. On Jan 26, 2019, Supalai will launch low-rise condo Supalai Prime Rama 9, worth 770 million baht, its first project this year. It will be located on a 950-square-wah site on Rama IX Road near Rama IX Soi 9. SPALI shares closed yesterday on the SET at 18.50 baht, down 60 satang, in trade worth 64.1 million baht.