Developer Supalai poised to launch 31 projects worth THB34bn in Thailand

Construction News
An artist’s rendition of Katalia housing project, a joint venture between Supalai and Australian developer Stockland, in northern Melbourne.

Developer Supalai poised to launch 31 projects worth THB34bn in Thailand

SET-listed developer Supalai plans to launch 31 new residential projects worth a combined 34 billion baht in Greater Bangkok and provinces, aiming to set a new high in presales and revenue of 27-28 billion baht.

Managing director Tritecha Tangmatitham said the housing market this year should return to normal after bottoming out last year, when the overall market declined by 30% and the condo segment fell 40%.

“The low number of condo launches will continue this year, with few land transactions for condo development last year,” he said.

“The number of environmental impact assessment reports submitted was also the lowest in several years.”

In 2021, Supalai plans to launch 27 low-rise housing projects and four condo projects, up from 25 and three last year, respectively, which were worth a combined 24.5 billion baht.

The company is bullish on launches this year, backed by a low financial cost of 1.9%, the lowest debt-to-equity ratio of 0.65 times, and use of economies of scale, with more than 10,000 units under development each year.

It aims to have 27 billion baht in presales, up from 24.4 billion last year, while revenue is expected to reach 28 billion — a new high in its 32 years of operation.

The previous high for revenue dates back to 2017 with 25.8 billion baht.

“The government’s property measure, cutting transfer and mortgage fees, should extend to units priced up to 5 million baht as this segment has a market share of 70-80%, while units priced 3 million baht and lower represent only 30-35%,” said Mr Tritecha.

Supalai chairman Prateep Tangmatitham said the company last year recorded sales of 1.98 billion baht from an investment in an Australian housing development, accounting for 7.5% of total sales.

“Last year the Australian government used incentives to promote home purchases, giving AUS$40,000 or around 930,000 baht to homebuyers,” said Mr Prateep.

“This was more attractive than Thailand’s measures.”

As Australia is a large and stable country, Supalai will continue investment in the housing sector in that country, he said.

In 2021, it expects to have 5.35 billion baht in sales from Australian ventures, which would make up 19% of target sales this year.

Supalai has spent a total of 3 billion baht in Australia’s housing market over the years, mainly in Melbourne.

It has 11 projects on hand, including joint ventures with local large developers such as Satterley, Peet and Stockland.

“Our overseas investment and expansion to the provinces in Thailand, currently at 19 provinces, aims at diversification, which can help the company grow sustainably during the pandemic,” said Mr Prateep.

Supalai plans to spend 8 billion baht to acquire new plots of land this year.