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CMC puts two projects on hold

Local developer Chaopraya Mahanakorn Co (CMC) has shelved two development projects but is moving ahead with four projects planned for Thon Buri, said chief executive Wichian Padhayanun.

After revising its business plan in the first quarter in the light of economic uncertainty, CMC has decided to launch only four projects, worth a total of 1.4 billion baht, from the six projects it had previously planned for this year.

The company is also considering acquiring projects in the Ratchadaphisek area from three small developers who lack the cashflow to complete them.

"Although our operating results in the first quarter were quite satisfying, we decided it is best to be cautious with the current economic situation," said Dr Wichian.

"We decided to delay our two projects in non-developed or less populated areas where the real estate outlook tends to slow at this time."

But the company forecasts the economy will pick up in the third quarter when it will revise its plan again. The two delayed projects have a total value of 600 million baht. One would be a condominium project in the north of Bangkok; the other a low-rise development in the outer ring road.

Meanwhile, CMC sees a growing opportunity in high-rise property in Thon Buri, where it will introduce four projects this year.

"There are not many high-rise buildings or condominium projects in the area, which is a good opportunity for us to enter," said Dr Wichian.

"Thon Buri is a virgin area without competition."

While condo units in central Bangkok are priced about 70,000-80,000 baht per square metre, equivalent condos in Thon Buri are only about 40,000 baht per sq m, said Harrison Group chief executive Alan Lin.

"Prices are expected to double after the completion of the MRT and skytrain projects," he said

Bangkok Horizon Phetkasem, the first of CMC's four projects for 2009, was launched yesterday. A 26-storey condominium project worth 750 million baht, this will house 418 units sized from 30 sq m and priced from 1.2 million baht.

CMC plans to launch an eight-storey condo project in Ratchadaphisek-Tha Phra with 157 units in the third quarter. The other two projects are townhouse developments in Bang Mod and Sathon-Taksin worth a total of 700 million baht.

CMC recorded sales of 233 million baht in the first quarter. It realised revenue of 166 million baht with net profit of 25 million. This year it expects sales of 1.2 billion baht, on par with last year. It currently has six condo projects and three low-rise projects.