Thai developer Pruksa Holding plans spending spree of 3.5 billion baht in property and healthcare technology startups

Construction News
Pruksa Chief executive Uten Lohachitpitaks

Thai developer Pruksa Holding plans spending spree of 3.5 billion baht in property and healthcare technology startups

SET-listed developer Pruksa Holding Plc (PSH) will invest 3.5 billion baht in property and healthcare technology startups to strengthen its core businesses and boost recurring income, after going through a restructuring and a clearance of its inventory over the past two years.

Chief executive Uten Lohachitpitaks said the company will synergise its two core businesses of property development and hospitals with technology and innovations as it plans to invest in startups through joint ventures over the next 3-5 years. Some of these startups will be in the fields of genomics and chemical laboratories.

“We will combine real estate and healthcare business into one, introducing designs for well-being and offering a wellness service both at our residential projects and at home,” he said.

At present, the company has selected around 100 startups, comprising its own staff and external contenders.

They will be entered into an innovation bootcamp to work together with PSH before setting up joint ventures.

As Mr Uten, who joined PSH last month, had experience in logistics and warehouse business while working with Frasers Property Holdings (Thailand) and Ticon Logistic Parks. PSH might also start tapping industrial business.

“Logistics and warehouses can be one of PSH’s supply chains,” he said. “We will not ignore an opportunity to do these businesses but will consider the overall economy and how these businesses are suitable for us.”

Besides 3.5 billion baht for technology startups, PSH will spend 6.5 billion baht in 2022 for residential development business and Vimut Hospital.

The higher investment budget came after PSH restructured itself and cleared unsold inventory over the last two years, from over 20 billion baht as of the end of 2019 to 7 billion baht in 2021.

As a result, net debt to equity declined to 0.36 times, from 0.54 times at the end of 2020, creating a strong financial foundation for investments in new businesses, said Mr Uten.

Piya Prayong, chief executive of Pruksa Real Estate, one of PSH’s subsidiaries, said the company planned to launch 31 new residential projects, worth a combined 16.3 billion baht, in 2022.

They will comprise 22 townhouse projects worth 9.2 billion baht, six single detached house projects worth 3.6 billion baht, and three condo projects worth 3.5 billion baht.

Most of the units will be priced 2 million baht and above, as buyers in these segments had a higher purchasing power than those for units priced less than 2 million baht as a result of the pandemic-hit economy.

PSH aims to have 31 billion baht in presales and 33 billion baht in revenue by the end of 2022, up from 25.4 billion baht and 28 billion baht, respectively, in 2021.

“The number of new projects being launched this year will be the same as last year, but the sales value will be lower, from 21.1 billion baht, as we will scale down the average project size to 20-30 rai, which takes 2-3 years to close sales, from 4-5 years for 30-50 rai,” said Mr Piya.

According to Pruksa’s market research, the residential market value in Greater Bangkok last year was 296.5 billion baht, up 10% from 2020.

A key driver was the market for single detached houses, the value of which soared 30% to 128 billion baht.