The Palm Residences Watcharapol developed by Pruksa Real Estate.

SET-listed developer Pruksa Holding downgraded the value of its annual new projects to 27 billion baht, from 29 billion baht, as the sluggish economy mutes purchases at its townhouse projects.

The company also urged the next prime minister and cabinet to continue economic stimulus policies.

Uten Lohachitpitaks, group chief executive of Pruksa, said Thailand's economy is still a concern, because of high household debt, factory closures and unemployment.

Mr Uten said the company's townhouse sales in the first half fell by 30% year-on-year, while sales of single detached houses grew 9%.

As a result, Pruksa decided to cut its residential projects for this year, previously set at 30 projects worth 29 billion baht.

The company paused two townhouse projects and added a new premium single-house project worth over 25 million baht per unit, bringing a total of 29 new projects in 2024.

It also revised down presales revenue to 22.4 billion baht, from 27 billion baht, in response to shrinking purchasing power.

Overall, the company shifted from townhouses priced 2-3 million baht per unit to 3-5 million baht per unit, as well as single-detached houses priced 15-30 million baht, to cater to strong premium demand.

During the first half, it launched six projects worth 7.5 billion baht, comprising three townhouses and three single-detached houses.

Pruksa reported 9.86 billion baht revenue in the first half, decreasing 28% from the same period last year.

It included 8.3 billion baht from residential development and 1 billion baht from its hospital business, while the remainder were other businesses, such as precast factories and construction companies.

In the second half, Pruksa will launch another 23 projects worth 19.6 billion baht. The key developments are a luxury single-house project called The Palm Thawi Wattana worth 20-25 million baht per unit, and The Palm Residences Pattanakarn worth 35-40 million baht per unit.

Mr Uten said the company still maintains the same consolidated revenue target of 28 billion baht for 2024, as announced earlier this year.

It currently has a sales backlog worth 4.9 billion baht, of which 65% should be transferred this year, while total inventory tallies 62.5 billion baht.

The company said it was able to maintain an appropriate net gearing ratio of 0.39.

Mr Uten said purchasing power in the second half should improve, thanks to the disbursement of the government budget and possible interest rate cuts.

He said the new cabinet should continue significant stimulus and economic projects to boost local spending power.