SET-listed developer Pruksa Holding (PSH) is continuing its rent-to-own scheme and using cost management to increase housing revenue amid rising interest rates and higher construction costs affecting the majority of homebuyers.
Uten Lohachitpitaks, group chief executive, said rising interest rates had an impact on lower- to moderate-income homebuyers -- the company's main segment. Presales of its units priced below 7 million baht in this year's third quarter dropped 20%.
"We will continue promoting Pruksa Pass, a rent-to-own scheme for ready-to-transfer condo units priced below 3 million baht to help customers whose purchasing power is limited and who are unable to get a mortgage loan approval amid rising interest rates," he said.
The scheme will allow customers whose qualifications are approved by Pruksa to move into a unit and pay a monthly instalment directly to the company during the first one to three years.
During the contract, customers will prepare for a mortgage loan application under Pruksa's guidance. If they receive approval for a home loan, they can get a unit transferred while the instalment they pay to Pruksa will become a discount which would be deducted from the credit line of the mortgage loan.
Since commencing in July this year, the Pruksa Pass has been used for the purchase of 100 units worth 200 million baht.
To cope with the soaring cost of construction materials, which eventually affect housing prices, Pruksa also managed its costs with new home designs which are able to maintain both space and costs.
The company's precast factory also adopted a new technology called CarbonCure in the concrete industry by injecting carbon dioxide into the concrete mix to reduce production costs and carbon dioxide emissions, Mr Uten said.
Pruksa yesterday reported 14.5 billion baht in presales in the first nine months of the year, down 27.5% from 20 billion baht in the same period last year. Revenue in the first nine months declined 10.3% to 17.2 billion baht from 19.2 billion baht in the corresponding period last year.
However, Pruksa's nine-month net profit grew 9.4% to 1.88 billion baht from 1.72 billion baht in the first nine months of 2021. Net profit margin also rose to a double digit with 11.3%, 10.3% and 11.6% recorded in the first three quarters this year, respectively, from 8.4%, 9.8% and 8.6% in the same period last year.
"Our presales and revenue this year dropped because we accelerated to clear stock last year with discounts and campaigns amid the pandemic," he said. "This year we have focused on maintaining and boosting net profit rather than presales and revenue."
Pruksa reported on Friday that Thongma Vijitponpun, the company's founder, major shareholder, group chief executive and chairman of the executive committee, would resign from group chief executive and chairman of the executive committee on Feb 1, 2023 as a part of his succession plan.
