THAILAND

SET-listed Sena Development Plc plans to tap Board of Investment tax incentives more actively in 2011 in response to rising interest rates and inflation.

Next year's projects have not been finalised, but the developer plans to focus more on ones that are eligible for BoI support, with prices estimated at 600,000 to 700,000 baht per unit, said executive director Kessara Thanyalakpark.

"The upward trend in interest rates is expected to have a significant effect on buyers who rely on bank loans. For every 1% rise in the interest rate, their budget for a home purchase drops by 8%. This has become a factor prompting us to consider developing new products that cater to this change in purchasing power," she said.

The Bank of Thailand on Wednesday raised the key interest rate for the second time this year, to 1.75%.

BoI tax incentives require developers to build at least 50 units - townhouses or detached houses - with a minimum size of 70 square metres and a maximum price of 1.2 million baht. Condominiums must be at least 28 sq m and priced at no more than one million baht.

Supported projects receive a five-year corporate income tax holiday.

Sena plans to introduce three projects in this year's fourth quarter with a combined value of more than 1.8 billion baht. One will be a condominium under BoI incentives, The Kith, worth 300 million baht, bringing its total BoI projects to four this year. Located in Sukhumvit Soi 113, the project will have 370 units.

The second one will be a 500-million-baht mixed-used project on Charoen Nakhon Road. It will featuring 7,000 sq m of retail and residential space. The design is still under study.

The third one will be a low-rise project worth about 800 million baht. Further details have not been disclosed. Sena has launched three projects worth a combined 1.3 billion baht so far this year.

The company posted a first-half net profit of 144 million baht, up by 13% year-on-year, on revenue of 632 million baht, down by 3%.

Net profit in the second quarter increased by 5.59% year-on-year to 63.5 million baht while revenue dropped by 8% to 304 million baht.

Sena is maintaining its revenue growth target at 20% to 1.5 billion baht this year. It has targeted presales of 1.7 billion baht this year. First-half presales reached 1.04 billion baht.

It currently has a sales backlog of 1.2 billion baht. About 800-900 million baht of that will be realised this year.

"A property oversupply may occur at some locations, but a bubble stage for the overall market is not likely. Rather, developers will tend to see a slowdown in sales," said Dr Kessara.

SENA shares closed on Friday on the Stock Exchange of Thailand at 2.40 baht, up 12 satang, in trade worth 32.6 million baht.