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Prinsiri turns to low-rise units

Bangkok Post Apr 23, 2009 Four new small-scale projects will cut risk After solving legal problems for two condominiums and enhancing liquidity by selling land plots, listed developer Prinsiri Plc plans to launch four new projects focusing on low-rise units, said managing director Veera Srichanachaichok. The projects are two single-house estates and two townhouse projects worth 500 million to 1 billion baht each and sized from 20-30 rai. It has no new condominium projects planned. He said the company's strategy this year would focus on small-scale projects to reduce risk and increase sales potential due to a short business cycle. Since late last year, it has been using tunnel-formwork construction for townhouse development, which reduces the construction period from six to four months, said Mr Veera. He was formerly the chief finance officer at Preuksa Real Estate and joined Prinsiri six months ago. "We adjusted our strategy late last year. We sold five plots worth 827 million baht with 12% profit margin as these plots have no potential for project development in the short term. This was to reduce financial cost," said Mr Veera. Meanwhile, the company has also adjusted its development plan for a plot in Rat Burana where it had earlier planned to build a condominium worth 1.86 billion baht. Instead, it will develop 60 high-priced townhouses from 5-6 million baht each. Prinsiri recently spent 280 million baht to buy a 30-rai site in Kalapapreuk to develop 300 townhouses worth a combined one billion baht. The project will be launched in the second quarter. This year, the company expects to realise 5 billion baht in revenue, with equal amounts from low-rise and condominium developments. The revenue will be about 30% higher than 2008. Its presale target was 3 billion baht, up 25% from the previous year. Prinsiri has backlog sales of 4 billion baht, 3.3 billion from condominium sales and the rest from single houses and townhouses. Mr Veera said the company wants to reduce its debt to equity ratio to 0.8 times by the end of this year from 1.8 times at the end of 2008. The company expects to finish transferring of all units in the Complete Ratchaprarop in May. For its 760-million-baht Complete Narathiwat, Prinsiri solved the legal setback requirement through the purchase of additional land to add distance between the building and the road. It expects to transfer units to customers later this year or in the first quarter of next year. Prinsiri resumed construction of its Pulse Phahon Yothin 37, which had been suspended by the Bangkok Metropolitan Administration because it did not get a proper permit. It expects to transfer some units in August. "The company faced higher costs from legal problems for the two condominium projects. We suspended sales which benefits us because market prices have adjusted significantly. Eventually, the losses will be compensated," he said. The opening price for Pulse Phahon Yothin 37 was 40,000 baht per square metre but the market price now is around 70,000 baht. PRIN shares closed yesterday on the Stock Exchange of Thailand at 0.73 baht, down one satang, in trade worth 591,000 baht.

 

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