Thursday, October 2, 2008

Plus freezes new condos in volatile building climate


The Sansiri Plc subsidiary Plus Property has frozen plans to develop new condominiums next year, citing volatile construction costs and high land prices, chief executive Mayta Chanchamcharat said yesterday. He said condominium demand remained strong but it was more difficult to find good plots for the low- to medium-priced segment in which the company specialised.

''We might create new brands for our next condominium project if the current two brands are perceived negatively,'' Mr Mayta said.

He was referring to the company's Condo One and My Condo developments, 11 of which violated height restrictions and had to be modified to eliminate the top floors.

He admitted that problems and delays with the condominiums would reduce Plus's 2008 net profit from an expected 10% of total revenue to 6%, as it had additional expenses of around 100 million baht for renovation and compensation. It also lost 400 million baht from reductions in sellable space.

Mr Mayta also said that changes in the construction regulations would allow less flexibility in development in the future.

By the end of the year, Plus expects to have a total of six billion baht in revenue from residential sales. Of the target, 3.7 billion baht would be from transfers of units at 13 condominiums and 2.3 million from townhouses.

He said the company planned to launch five new townhouse projects worth a combined five billion baht in 2009 with approximately 300 units each. They would include a 30-rai site in Soi Pracha Uthit 80, in Theparak, along Ekamai-Rarm Intra Road, in Soi Charan Sanitwong 13 and in the Thon Buri area.

The company will also adjust its sales-launch strategy for townhouses due to volatile construction costs and the economic slowdown. It would wait for some progress on construction before launching sales to prevent any loss from higher construction costs. Prices would be around 3.5 million to 4.5 million baht each, already adjusted by 5% from its earlier prices.

Plus Property will offer its 200 condominium units worth 700 million baht at the House and Condo Fair that will be held from tomorrow until Sunday at the Queen Sirikit National Convention Center in Bangkok.

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