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AP tops presales, revenue aims

Firm sanguine on BoT mortgage rules

A single detached house at the Palazzo Srinakarin is priced from 29 million baht a unit. AP predicts the luxury segment will not be affected by the new lending rules.

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SET-listed residential developer AP Thailand Plc expects 43 billion baht in presales and 35 billion in revenue by the end of 2018, 10% higher than targeted, after 11-month presales overachieved.

Chief executive Anuphong Assavabhokhin said this momentum will carry on in 2019 despite negative factors such as rising interest rates and the Bank of Thailand's new requirements on mortgage lending, which will take effect on April 1, 2019.

"The new central bank rules are nothing new as loan-to-value limits were applied in 2003 and the effect was minimal," he said. "The market impact will only last until the first month after the new rules start. After that the situation will return to normal."

For the first 11 months of 2018, AP recorded 41.5 billion baht in presales and expects to have 43 billion by year-end, higher than its target of 39.8 billion it set in October. Last year it posted 42.9 billion baht in presales, beating its target of 26 billion and rising from 22.4 billion in 2016.

Some 21.8 billion baht of presales were condos, mainly launched by a joint venture with Mitsubishi Estate Group, one of Japan's largest developers.

AP had 19.7 billion baht from low-rise houses (single houses, duplex houses and townhouses), with solid performance across all segments.

Revenue as of the end of September 2018 totalled 27.1 billion baht, up 49% from 18 billion in the same period last year. A major contributor was luxury condo Vittorio Residence on Sukhumvit Soi 39, worth 3.2 billion baht, which was sold out in the third quarter.

AP expects 35 billion baht in revenue by year-end, higher than its target of 32 billion. A key contributor in the fourth quarter will be the high-end single detached house project, the Palazzo Srinakarin, with units priced from 29 million baht.

"We don't need to use campaigns to accelerate transfers in the final two months as we already reached our target," said Mr Anuphong.

He attributed the presales success to the use of direct operating profit in business units as a key performance indicator.

AP shares closed Tuesday on the SET at 6.85 baht, down 10 satang, in trade worth 55.3 million baht.

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