Areeya turns to high-end segment

Construction News

Areeya has a mechanical parking system at its A Space Me condo project.

SET-listed developer Areeya Property Plc (A) will launch two condo projects worth more than 11 billion baht in total on Ratchadamri Road and Sukhumvit Soi 53 next year largely aimed at tapping the high-end segment.

The Ratchadamri project will be located on a five-rai site owned by the Office of the Privy Purse, where the AUA Language Center formerly stood, said chief executive Wisit Laohapoonrungsee.

After signing to rent for 30 years in April, Areeya will develop a 300-metre tower with up to 70 storeys and 400 units of a leasehold condominium and hotel on saleable area of 50,000 square metres worth 10 billion baht.

Construction is slated to be completed in 2019 with an investment of 5 billion baht. Under the agreement with the AUA, Areeya will construct a seven-storey building with a total area of 7,500 sq m to serve as the former tenant’s headquarters.

As of the end of September, Areeya’s debt-to-equity ratio was three times, due largely to spending on the agreement of the Ratchadamri site. It expected to drop to less than two by the end of the year as 2015’s performance would improve from last year.

For the first nine months, it recorded 4 billion baht in revenue with a net profit of 198 million baht, up from 1.62 billion baht and 26.82 million baht, respectively, in the same period last year.

It aims to have 5 billion baht in revenue by the year-end, almost double the 2.56 billion baht it posted last year. The main driver would be a recently completed condo project, A Space Me on On Nut Soi 37, worth 1.2 billion baht.

In 2016, it targets revenue growth of 20% to 6 billion baht and 10 billion baht by 2018. Currently, it has a housing inventory of 10 billion baht with 25 projects covering condos, single houses and townhouses to sell and realise as revenue.

“We’ve just finished restructuring by selling a plot of land not in line with our development focus on the middle-to-lower-end segment,” Mr Wisit said.

The 50-rai plot in Kaset-Nawamin worth 1.3 billion baht was suitable for high-priced single house development but was sold to a listed developer. Areeya has 20 rai remaining to develop townhouses priced 2-3 million baht a unit.

Mr Wisit said the company plans to allocate 2 billion baht for new land acquisition next year after investing 1.5 billion baht in 2015.

Another luxury condo project will be located on a one-rai site on Sukhumvit Soi 53 where it will develop a low-rise condo with at least 100 units worth 1 billion baht, to be launched in the second quarter of next year.

Areeya yesterday introduced a mechanical parking system at its A Space Me condo project on Sukhumvit Soi 77 (Soi On Nut).

A shares closed yesterday on the SET at 6.05 baht, unchanged, in trade worth 346,000 baht.