Tritecha: Provincial market sluggish

SET-listed developer Supalai Plc (SPALI) plans to launch 28 projects worth a combined 31.1 billion baht in a bid to have presales of 23 billion baht this year for growth of 19%.

Deputy managing director Tritecha Tangmatitham said the overall housing market this year was expected to be in better shape in Greater Bangkok but upcountry markets remained sluggish.

"The worst provincial market for us was Surat Thani, which was greatly hit by a sharp drop in rubber prices," he said.

"We are not worried about other provinces as our main products are low-rise units, which can be adjusted in line with sales."

It has projects on hand in nine provinces — Chiang Mai, Udon Thani, Khon Kaen, Ubon Ratchathani, Chon Buri, Rayong, Songkhla, Phuket and Surat Thani. It will also launch a single-house project in Nakhon Ratchasima this year.

Of the 28 new projects, 30% will be in those 10 provinces. The sales value of 19 low-rise projects will be 16.1 billion baht, while nine condo projects will have a value of 15 billion baht.

This year Supalai set a budget of 6 billion baht to buy plots of land for development, up from 5 billion last year, as new mass transit lines open up new locations in Greater Bangkok.

Supalai had sales of 2.1 billion baht this year up to Feb 15, an increase of more than 10% year-on-year.

Low-rise units in Greater Bangkok rose by 20%, but condo sales were stable.

Mr Tritecha said high household debt had a minimal effect on the company, as those affected were low earners.

The company's bank rejection rate last year dropped from 8% to 5.8% before rising to 6% early this year.

Supalai last year had 19.4 billion baht in presales, up by 4% from 2013. Of this amount, 11.1 billion baht was from condo units and the rest from low-rise units.

It had a sales backlog of 38.8 billion baht, of which 17.7 billion will be realised this year. It targets having 22 billion baht in revenue by year-end.

It posted a net profit of 4.47 billion baht last year, up 55% from 2013, on consolidated revenue of 18.7 billion, up 47%.

Some 100 million baht of revenue was from an office for rent in Manila.

In Melbourne, Australia, it spent 280 million baht on a joint venture with two Australian developers and a Malaysian firm. Supalai and the Malaysian investor each hold 25%.

The project will have 1,700 units worth a combined A$370 million (9.31 billion baht). The initial rate of return will be 20%, and Supalai will receive a dividend.

SPALI shares closed yesterday on the SET at 20.10 baht, down 1.20 baht, in trade worth 440 million baht.