Sansiri targets budget buyers

Sansiri targets budget buyers

Thailand’s second biggest property developer, Sansiri PLC, has set itself ambitious targets over the next 3 years in order to capture more of the low end property market.

The company’s chief operating officer, Khun Wanchak Buranasiri  recently announced new targets that will see revenue increase by 10%  this year to eventually reach THB29 billion (US$947 m) in 2012 and then THB35 billion (US$1.1bn) by 2013.

Wanchak said the revenue increases will come from 23 new projects, which include 12 townhouse and detached housing estates worth THB13 billion (US$424m) plus 3 condominiums projects with a total value of THB17 billion (US$555m).

Until now, Sansiri has focused primarily on high-end residential projects, but reduced demand at this level prompted the company to shift its strategy to target middle- and low-income buyers. New lower-income properties are generally condominiums priced from one million and and the company expects strong demand in this sector.

In terms of the wider Thai property sector, Wanchak says the main challenges will be rises in the cost of construction materials, which are expected to go up by 1-3 per cent, while inflation may also cause a drop in buyer demand. However, he also maintains that the market will improve on last year’s performance thanks to the continued strength of the Thai economy

Only 10 major players dominate the property market in Bangkok, and these account for some 70% of all residential projects. Mr Wanchak said he believes developers learned hard lessons during the 1997 financial crisis and that most companies now have strategies to cope with any issues of oversupply. Although some areas are showing signs of a surplus, he said, the situation is still controllable.

Related posts: