The listed developer Property Perfect Plc (PF) has revised down its investment, sales and revenue targets on an expected worsening of post-flood housing sentiment.
Chainid: To be more conservative
However, it believes the market will recover within six months.
Chief executive Chainid Ngowsirimanee said it would reduce the land purchase budget to 2.5 billion baht from 3 billion both this year and next.
“We’re going to be more conservative. We’ll wait and gauge the market situation after the floodwater recedes. Land prices will change at many locations, dropping by 10-15% in some flood areas and rising by 10-20% in non-flood zones,” Mr Chainid said.
Before buying new plots, PF will look at government measures aimed at improving the situation and preventing further flooding.
If the measures are not clear, then the company plans to freeze land purchases and use what it already has for new projects over the next three or four years.
Mr Chainid said the flood crisis will dampen the housing market for at least the fourth quarter, which is usually a boom period.
However, the market could start recovering in next year’s first quarter as pent-up demand among homebuyers bursts.
Many buyers have been delaying their purchases ever since the government’s inconsistent housing measure in August and September.
PF is therefore postponing the launch of several new projects earlier planned for this quarter to early next year.
The five projects _ three single house developments and two condominium complexes _ are worth a combined 6 billion baht.
The worsening sentiment has prompted the company to revise down its full-year revenue target to 8 billion baht from 10.4 billion earlier or to flat growth from a previously expected figure of 30%.
Fourth-quarter revenue will come in about the same as the third quarter or 2 billion baht.
Sales in the quarter will be 3 billion baht, down from an estimate of 4.5 billion.
To build up confidence among homebuyers who may fear future flooding, the company will install a flood protection system in all new projects as well as some existing ones that still have units for sale.
Project land will be raised by 30 centimetres to ensure it is higher than the main road, make a 1.1-metre hill at the entrance to projects, erect flood-resistant fencing and install pumping stations and mobile pumps.
For individual units, the parking and ground areas will be lifted up 50cm higher than the main road and home floors 1.1 metres.
A reservoir will delay water flow, with a gate to prevent water entering the houses.
PF shares closed yesterday on the Stock Exchange of Thailand at 72 satang, up 5 satang, in trade worth 87.3 million baht.
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About the author
Writer: Kanana Katharangsiporn
Position: Business Reporter