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PF to focus on sales during credit pinch
Bangkok Post – 6 November 2008
KANANA KATHARANGSIPORN
The listed developer Property Perfect Plc (PF) will speed up sales and apply a conservative approach in launching new projects due to an unreliable economic situation, says chief operating officer Teerachon Manomaiphibul. He said rising concerns about political problems since May had dampened market sentiment. Housing sales in the first quarter, boosted by government tax incentives, had slowed in the following two quarters and the market was recently hit by the global financial panic.
''Financial institutions are now very picky in approving mortgage and project loans as the global crisis has affected credit,'' he said. As a result, many developers face higher loan rejections for sold units.
During the first 10 months of the year, PF had eight billion baht in presales but around 500 sold units worth 1.5 billion baht were cancelled. Ninety percent were single houses and townhouses, while 10% were condominiums. As a result, it recorded only 6.5 billion baht in presales.
Mr Teerachon said that more than half of the cancellations were rejections from financial institutions. Since August, the rejection rate for its clients doubled to 10%. The other cancellations conceded their downpayments because of either the economic or political situation.
The company expects no growth in presales and revenue in 2009 as the market should slow down.
PF projects 8.5 billion baht in sales by the end of the year. To achieve two billion baht in sales the final two months, the company plans to launch new projects on a smaller scale.
It will launch three high-end projects, including six luxury houses in Ramkhamhaeng worth 160 million baht, 19 single houses in the Sukhumvit area worth 260 million baht and 30 single houses in the Ekamai-Rarm Intra area worth 400 million baht.
Next year it will reduce new projects to three in the Ratchapruek, Kallapapruek and Pattanakarn areas and depend on new phase expansion in existing projects with new products. All new housing units will be constructed using a prefabrication technique.
''The condominium market next year will be very challenging as new projects have to compete with completed units added to the market and resale units that are competitively priced.''The company will also freeze a plan to issue warrants as it wants to hold cash on hand in case of a liquidity shortage. PF has 500-600 million baht in cash as a revolving fund.
PF plans to hold a sales event tomorrow to launch new condominiums on Sukhumvit Soi 103/4 and on Ratchadaphisek Road in the Huai Khwang area with 588 units worth 1.4 billion baht and 386 units worth 1.1 billion respectively. It will offer discounts of 5%.
The company expects sales of one billion baht from the event, lower than a previous target of two billion baht.
PF shares closed yesterday on the Stock Exchange of Thailand at 2.54 baht, down two satang, in trade worth 10.86 million baht.
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