SET-listed developer AP Thailand Plc plans to continue launching new condominium projects in Bangkok locations to into tap the middle- to upper-end segment, where purchasing power remains strong.

Vittakarn Chandavimol, chief of business for condominiums, said most developers the past few years launched condo projects in city areas appealing to the middle- to high-end segment, as their purchasing power is stronger than those in the lower-end market.

"Five years ago developers launched condo projects in provinces and outer city areas, building lower-priced condos, but they learned this strategy failed as condos might not be the first choice for some homebuyers," he said.

Buyers know it is more convenient to live in a city condo than some outer city areas, said Mr Vittakarn. In many outer city areas, a supply glut also dampened enthusiasm.

When the price gap between a condo and single house or townhouse is narrow or zero, homebuyers will prefer the latter, he said.

In outer city areas, most condo supply is priced around 1.5 million baht a unit while townhouses nearby are priced similarly.

In inner city locations, most condo units start at 6-7 million baht, but exceed 20 million baht a unit for a single house or townhouse nearby.

Due to a shift to inner city locations among developers, land prices have risen significantly.

"In the past, land costs accounted for 40-45% of development costs but these days land costs for some projects account for up to 55%," said Mr Vittakarn.

To cap selling prices and keep condos affordable for target buyers, AP will adopt design efficiency when developing a project.

He said demand for condos in city locations also includes foreign buyers as they are more familiar with city areas, particularly those with access to mass transit lines.

Last year AP posted sales of around 6.5 billion baht from foreign buyers.

The largest segment were Chinese buyers, who bought units at one of its condo sites in the Rama IX area. Buyers from Hong Kong and Singapore followed, buying units at Lat Phrao and Wireless roads.

"These three markets have different styles when buying condos in Bangkok. Buyers from Hong Kong and some Chinese cities made the fastest decisions when buying high-priced units, while Singaporeans preferred mid-priced ones," said Mr Vittakarn.

AP also sold condo units to Japanese buyers, who preferred high floors and the highest prices at projects, but they remained a small portion, accounting for 5% of foreign sales last year.

"Japanese spent the most time to decide. We needed to organise a seminar on Bangkok property and a tour," he said.

AP shares closed Monday on the Stock Exchange of Thailand at 8.50 baht, an increase of 10 satang, in trade worth 30.6 million baht.

AP Thaiand Plc will launch Life Sukhumvit 62, a 24-storey condo on a 2.5-rai site on Sukhumvit Soi 62, with 438 units worth 2 billion baht on March 27.