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Preuksa ready to become no 1

Friday, 03 October 2008

The Nation October 1, 2008 "To take Preuksa Real Estate to the No 1 slot in the market, our strategy focused on building synergies between our core strength in cost management and our new business model aimed at making Preuksa a universal brand," company's director and chief operating officer Prasert Taedullayasatit said in an interview with The Nation on Monday. "I called up Thongma Vijitpongpun, who is president and CEO of Preuksa, and told him I saw an opportunity to make the compaฌny a market leader by building synergies between its business strength and my experience in strategising," he said. Prasert said he felt the company's strength lay in its cost management, which enabled it to price its resiฌdential projects lower than those of other developers in the market. The company targeted the lowerincome group with residential projects under the Baan Preuksa brand, priced between Bt1 million and Bt1.5 million a unit, and the Passorn brand with detached houses priced between Bt2 million and Bt3 million a unit. When he joined Preuksa, Prasert faced the challenge of expanding the company's target market from the lowerincome group to the middle and highincome groups. Prasert said in the last four years, he saw the trend in the property market transform with a change in homebuyers' lifestyles. Most homebuyers now prefer to stay close to a masstransit system, such as the Skytrain or the subway, following a rise in costs of living with an oilprice increase from less than US$100 (Bt3,400) per barrel to $150 a barrel. Homebuyers also want unique residences that match their individual lifestyles. Given the market trend, the company decided to build a brand that would cater to diverse customer groups by focusing on innovative designs and new locations. Prasert said that for the first time, the company shifted its new residential projects from the suburban Rangsit and Bang Bua Thong areas to locations close to the central business district. The project designs were also modernised. Meanwhile, the company created new brands for its residential projects and expanded its portfolio to include condominium projects. It now has 11 brands focusing on different market segments. Out of the 11 brands, three offer detached houses priced between Bt1.8 million and Bt5 million a unit. These are Preuksa Village priced between Bt1.8 million and Bt3 million a unit, Passorn priced between Bt2.5 million and Bt5 million a unit, and The Plant, for the styleconฌscious middleincome segment and priced between Bt3 million and Bt5 million a unit. Four townhouse brands offer residences priced between Bt600,000 and Bt4 million a unit. These include Baan Preuksa, priced between Bt600,000 and Bt1.5 million a unit, Preuksa Ville, priced between Bt1 million and Bt1.5 million a unit, The Connect, priced between Bt1.5 million and Bt2 million a unit, and The Plant Citi, priced between Bt3 million and Bt4 million a unit. The condominium brands include City Ville, priced between Bt500,000 and Bt800,000 a unit, The Tree, priced between Bt1 million and Bt1.5 million a unit, The Seed, priced between Bt1.2 million and Bt3 million unit, and finally, Ivy, priced between Bt1.5 million and Bt10 million a unit. With the new brands, Preuksa changed its image from a lowcost residential developer to an integrated property developer catering to diverse market segments. "Our strategy was to differentiate our company from others developers yet maintain revenues from the lowerincome group. So, instead of focusing on creating one brand targeting middle to upper segments, we developed multiple brands for diverse target groups, which would indirectly promote a corporate brand as customers identify us with highquality residences," he said. Prasert said the company is now moving on to the third stage, which is to become the market leader. "We believe we can become a market leader in the near future as we are strong on our cash flow as well as product quality. We have also succeeded in expanding our target market. We are ready to become No 1," he said. Preuksa expects presales of Bt20 billion and revenues of Bt14 billion by the end of the year, ranking third following Land and Houses and Sansiri. It expects a net profit marฌgin of 17 per cent by year end.

 

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