Pruksa earmarks Bt30 bn budget

Up to Bt14 billion will be used to replenish the land bank and about Bt16 billion to develop infrastructure and residential projects for sale, Charly Madan, chief financial and risk officer, told a press conference yesterday.

More than 70 per cent of its capital expenditures will be funded by internal cash flow and the rest by bank borrowing. Debentures worth Bt6 billion will also be issued to refinance debt maturing this year.

"We’re managing our debt-to-equity ratio to keep it from going over 1.25. At present the ratio is 0.9, as the cost of funds is lower than 4 per cent," he |said.

About 60-65 residential projects worth between Bt50 billion and Bt54 billion in total are planned for this year to drive presales up 20.3 per cent to Bt51 billion and revenue up 10.6 per cent to Bt52 billion, said Thongma Vijitpongpun, president and chief executive officer.

Last year’s presales came in at Bt42.38 billion, and its revenue target was Bt47 billion.

"We’re confident our total presales and revenue will achieve the target when we see demand for homes still growing, especially for low-rise residences, both detached homes and townhouses, which accounted for about 70 per cent of our presales and revenue.

"The rest was from condominiums," he said.

Out of the company’s backlog worth Bt25.93 billion of units already sold and waiting to be transferred to customers, Bt15.27 billion worth will be transferred this year, chief operating officer Lersuk Chuladesa said.

Government stimulus

The government’s measure to boost demand for property, which is still effective until the end of April, is also expected boost Pruksa’s revenue, as the company now has enough inventory to serve demand worth up to Bt15 billion until that month.

Housing prices are showing signs of increasing 3-5 per cent this year because prices of land around the 10 new mass-transit routes planned for investment by the government this and next year are rising, Thongma said.

"Although building-material prices look to drop after the oil-price plunge, when combined with land prices rising 10-20 per cent, this is the reason residential prices will still increase by 3-5 per cent compared with last year, when building-material costs dropped," he said.

The property market in Bangkok and suburbs this year will continue to grow by 5-10.3 per cent to between Bt378 billion and Bt391 billion, from Bt354.79 billion last year. This estimate is based on gross domestic product growing by 3.5-4 per cent this year.

"When the government kicks off the investment in infrastructure projects – both the 10 new mass-transit routes and the double-tracking system or high-speed rail – that will boost the country’s property market by 5-7 per cent [annually] from this year through 2025," he said.