The River: Raimon Land’s Jackpot Project
Raimon Land has The River venture to thank for the company’s positive financial outlook, as the project has played a major role in raking in the profits. The company reported a comeback in profitability in the second quarter of 2012, which was mainly due to sales made from The River project in Bangkok, Thailand. Raimon Land’s total net profit for the quarter after taxes was THB101 million.
The River’s Contribution to the Whole of Raimon Land
Raimon Land, having a financial outlook that spells profitability over the next few years, is in a good position, and The River project is the main reason for that. The company has sales contracts for the said property development that are valued over THB11 billion. With The River completely finished, it is time for Raimon Land to sell the units and report their income on the account. Raimon Land Chief Executive Hubert Viriot stated that The River income from unit transfers on the second semester of the year and profits next year would be a major contributor to the total revenue of Raimon Land as a whole, positioning it on the revenue margin and creating a trend of profitability in the long run.
The River started selling its units in June 2012. Transfers until the end of the month totaled to THB11 billion in sales value, representing 77 percent of the project’s saleable area. Linked to The River is The Vue, a posh shopping complex that has also sold 70 percent of its units and has fully completed construction.
More than half of Raimon Land’s reported total secured sales backlog of THB18.3 billion for the second quarter is attributed to The River project, while only 33 percent of it is credited to the 185 Rajadamri Project. The 185 Rajadamri project is Raimon Land’s other luxurious project. Priced at THB250,000 per square meter, it is the most expensive condominium project in the capital city of Thailand.
Other Key Players
Also contributing to the high revenue returns of Raimon Land for the second quarter are the high sales progress of 185 Rajamandri project and the success of the Pattaya projects. The construction of the 185 Rajamandri has now reached the 16th floor and is due for completion next year. More than half of its saleable area is now sold and secured.
The Pattaya projects sales have also peaked this quarter. The Zire Wongamat project has sold 68 percent of its total saleable area, with its first building already sold out. The Northpoint and Unnix South Pattaya have also sold 88 percent and 27 percent of their saleable areas, respectively. The Zire Wongamat and Unnix South projects are due for completion this year.
The Real Score
Due to Thai accounting policies, Raimon Land’s profits are registered at only THB5.2 billion. However, considering that it has a total of five current projects, the company, as of June 2012, has actually earned THB23.5 billion from the sales contracts of these existing projects. These five projects are presently under development and are expected to be completed soon with a total sales value of a whopping THB35.2 billion.
Plans for Future Projects
The company plans to acquire new properties in the vibrant city of Bangkok with the intent of establishing two new projects within the year. The projected sales value of the projects will be approximately two to three million THB. These plans were included in the announcements made by the company during a press conference held in Bangkok on the 15th of August 2012.
Chairman Viriot states, “We are in final negotiations on a number of freehold plots, all within 200 metres of central stations on the BTS and MRT. Our plan is to develop medium-to-high end projects at these locations with pricing in the THB90,000 to THB150,000 per square metre range. Unit prices will be between two to 10 million baht. Market positioning is under review – but we are considering The Lofts and Unixx brands. The plan is in line with our strategy of focusing more on mainstream Thai customer segments and of developing a rhythm of at least two new launches per year going forward.”
With the enormous money coming in from The River, Raimon Land has certainly hit the jackpot as the developer of the said business venture. Only time will tell if the planned future projects will be just as or more successful than this huge money-maker.