SET-listed contractor Nawarat Patanakarn Plc (NWR) is jumping into property development with plans to launch three residential projects worth a combined 2.3 billion baht on the outskirts of Bangkok in 2015.
President Polpat Karnasuta said property development would be the company’s fourth business following construction, pre-stressed concrete piles and pre-cast concrete manufacturing and steel fabrication.
“Property development is an attractive business with a higher margin, but it requires capital to work,” he said.
“We’ve constructed many property projects for other developers for several years. Now it’s our turn to do it.”
Before setting up Mana Patanakarn Co in late 2013 for property development with registered capital of 600 million baht, Nawarat tried property development in 2009 by acquiring Ruean Rapee Co.
Ruean Rapee developed a 205-unit housing project named Baranee in Rangsit Khlong 3 a decade ago before encountering financial problems in 2008. It sold the remaining plots with 50 unsold units as a construction fee for Nawarat.
“We continued the development of that project and decided to spin off the property development business last year for clearer financial management,” Mr Polpat said.
Ruean Rapee was founded in 2003 with registered capital of 59.1 million baht.
Mana Patanakarn plans to develop single houses, duplexes, townhouses, condos, offices for rent and warehouses the next three years, adding serviced apartments, hotels and community malls by 2020.
This year the new subsidiary plans to launch two single house projects in Rangsit Khlong 3 and Rom Klao worth 700 million and 900 million baht, respectively.
The Rangsit project will have 140 units priced from 4 million baht on a 35-rai site, while the Rom Klao site will be located on a 22-rai plot with 86 units.
An eight-storey condo worth 2.4 billion baht is planned on 15 rai at kilometre 4 of Bang Na-Trat Road. The first phase will be worth 700 million baht this year, with 400 units sized from 24 square metres and priced at 1.5 million.
This year Mana expects to have 900 million baht in presales and 300 million in revenue, with target growth of 10% per year. The subsidiary is expected to contribute 5% of total revenue for Nawarat this year, 10% in the next few years and 20% in 2020.
NWR shares closed yesterday on the SET at 1.86 baht, down seven satang, in trade worth 31.1 million baht.