SET-listed developer Singha Estate has paused new condo development and will launch only low-rise houses in high-priced segments, with five new projects worth a combined 10 billion baht planned for this year.
Nattavuth Mathayomchan, chief residential development officer, said the new projects will have units priced from 10 to 200 million baht, with at least two of them in new segments including units priced between 20 to 50 million and 10 to 20 million.
"We continue to focus on high-priced segments as purchasing power is stronger than lower-end amid rising interest rates," he said.
In the fourth quarter last year, the firm recorded 830 million baht in revenue from the transfer of seven units at Siraninn Residences, a luxury single detached house project on Phattanakarn Soi 32. Of the 28 units in total, 26 units had already been sold.
All of the new projects this year will be in Greater Bangkok, while a land plot covering nearly 13 rai in Si Racha is waiting for additional land acquisition nearby in order to develop a mixed-use project.
"Condo market has slowed down in the past two years and the majority of best sellers were units priced 3 million baht and lower as they were driven by the property measures," he said.
Condo demand was also in locations near universities or sources of employment as customers represented both real demand and investment buyers who wish to rent out their property.
With property measures and the easing of the loan-to-value limits ending last year, as well as rising interest rates and appraisal prices of property this year, the condo market this year was unlikely to be better than last year.
"We will not do condo this year," he said. "Our condo inventory on hand still remains large."
The firm had condo units worth a combined 4.4 billion baht remaining unsold at two projects, comprising 1.8 billion baht at The Esse Sukhumvit 36 and 2.6 billion at The Extro Phayathai-Rangnam.
This year it expected to increase the revenue contribution from low-rise houses to 70% of total residential revenue, up from 50% previously, said Mr Nattavuth.
In the first nine months of 2022, Singha Estate posted around 8.5 billion baht in revenue, up 65% from the same period of 2021.
The growth was driven by revenue from hotel business at 6.1 billion baht, soaring from 2.77 billion. Revenue from residential development dropped to 1.22 billion baht from 1.57 billion.
However, the firm expected to have a revenue growth in residential development business this year.
