TRIS Rating Co., Ltd. has affirmed the company rating of Univentures PLC (UV) at “BBB” with “stable” outlook. The rating reflects the strong support from a major shareholder -- Adelfos Co., Ltd., the potential recurring income from an office rental project in the heart of Bangkok, and the ability to maintain the leading position in the zinc oxide (ZnO) business. These strengths are partially offset by the risk from completion of the Park Ventures project, a short track record as a property developer, and the expected leverage increase to fund property investments. TRIS Rating also takes into consideration the cyclical nature of both the property development and ZnO industries and the relatively low level of consumer confidence, which is the result from the economic condition and uncertain political situation.
The “stable” outlook reflects the expectation that UV will be able to carry out construction of its huge commercial property project as planned. UV’s financial profile during the construction period is expected to weaken since the company will incur a significant amount of new debt to complete the project. Revenue from residential property development is anticipated to become more significant in 2010 while the number of project openings in the future will be maintained in order to keep the growth of residential sales as planned.
TRIS Rating reported that UV was established in 1980 as a ZnO producer. The company started to shift its focus to the property development sector in 2000 by investing in a number of joint ventures (JV) with selected property developers. The JVs have successfully launched more than 20 projects worth a combined total of over Bt17 billion. UV’s shareholding significantly changed after Adelfos became the major shareholder in 2007. Adelfos is a company owned by the sons of a Thai liquor tycoon, Mr. Charoen Sirivadhanabhakdi, who still owns a number of property companies under the TCC Group. Currently, Adelfos holds 51.6% of UV’s shares. Since 2007, UV has focused more on high-rise residential property development. In 2007, the company increased its stake in Grand Unity Development Co., Ltd. (GUD), a condominium development company, from 33% to 60%, taking a full control of GUD’s operations. GUD is currently developing several condominium projects under the brand U Sabai and U Delight for the middle-income segment. The company is also developing a very large mixed-use high-rise commercial property project, Park Ventures, which will contain office space and a hotel. UV subleased the hotel portion of the project, which is around half of the total lettable area, to be operated by TCC Luxury Hotel and Resort Co., Ltd. (TCCLH), an affiliate of its major shareholder. UV has been receiving a lump sum leasehold payment from TCCLH to support the project construction. UV will only operate the office space portion when the project is completed in 2012.
TRIS Rating said, since the investment in the residential property business was in the early stage of development, sales of ZnO was the major source of UV’s revenue in the first three quarters of 2009. ZnO sales generated around 70% of total revenue. The company expects sales of residential units to grow and contribute around 50% of total revenue in 2010. The overall operating performance of UV slowed in 2008-2009. The sales volume of ZnO products in the first three quarters of 2009 remained at the same level as in recent years, but the value dropped by 37% from the same period of 2008 due to the significant drop in price on the London Metal Exchange (LME). Revenue from residential property development was Bt211 million, accounting for 27% of total revenue for the first three quarters of 2009, up from Bt31 million for the whole year of 2008. The operating margin was -1% in 2008 and -4.5% in the first three quarters of 2009. Total debt (excluding leasehold obligations) significantly increased from Bt34 million at the end of 2007 to Bt568 million at the end of 2008 and Bt702 million at the end of September 2009. Funds from operations (FFO) increased from Bt120-Bt130 million in 2006-2007 to Bt367 million for 2008 and Bt388 million through the first three quarters of 2009, due mainly to the advance receipts from
TCCLH for the long-term lease of the hotel. Hence, cash flow protection, which had been unusually high, fell to a normal level for the residential property industry. FFO to total debt ratio, which had been ample in the past, dropped from 357% in 2007 to 64.5% in 2008 and 52.1% (non-annualized) in the first three quarters of 2009.
The residential property market was volatile over the past year, reflecting the national political instability and the global financial crisis. Although it recovered in the second half of 2009, the market remained relatively slow and has become increasingly dominated by major developers. Government tax incentives that allowed homebuyers to get a personal income tax deduction of up to Bt300,000 for the purchase of a new residence expired in December 2009. Hence, demand for residential property in 2010 is expected to be in line with that in 2009 but still depends heavily on the economy and consumer confidence, said TRIS Rating.
Sunday, February 7, 2010
Saturday, January 30, 2010
Royal House projects an upbeat for home building market in 2010 and will open its first provincial branch in Chonburi.
Royal House, Thailand’s top home building company, guides that home building market in 2010 will grow thanks to improving global economy and stable political backdrop, which are expected to bring back purchasing power into the market. Being confident in its potentials and experienced personnel, the company will aggressively open its first provincial branch in Chonburi and preemptively launch new inexpensive housing models at 2 million Baht price point at the event to be held during January 27, 2010 – February 2, 2010 at 1st floor, Central Plaza Lardpaow.
Mr.Sakda Kovisuth, Managing Director of Royal House Co., Ltd., reveals today that the home building market in 2010 should improve thanks to several favorable factors, i.e. improving global economy and stable local political backdrop seen since late last year, which are expected to reinstate consumer confidence and bring back purchasing power. In addition, since the number of eastern provincial customers has been noticeably rising, the company has decided to open its first provincial branch in Chonburi.
“From mid to late last year, upbeat outlook was seen in the home building market and it is expected to continue this year. We project rising consumer purchasing power as consumers are somewhat used to the negative factors, like the World financial crisis and local political unrest. Though oil price is expected to rise, it should remain stable for a certain period of time. So I would say, this year could be a new milestone for Royal House, as we aggressively move into our first provincial market in Chonburi and we do look for more as we gradually move forward into the future.” said Mr.Sakda.
Under its “Smart Home Building” slogan, Royal House posted an as-expected sale of 800 Baht in 2009 and projects a sales target at 900 million Baht in 2010. The 10% growth is due to its confidence in positive internal and external catalysts, whether economical, political or personnel. In 2010, Royal House will continue to focus on sound construction system and solid residential structure, which it provides a guarantee of 15 long years. In addition to system and structure, Royal House also places high priority on services and craftsmanship as it has continually trained and developed all of its personnel to give quality services to its customers during the past 5 years.
Mr.Waiyawit Hanwiriyaritha, Royal House’s Design Consultant, further adds that the company has continuously developed its designs to answer to the needs of its customers in all segments. Lately, the company has launched a new inexpensive home series, which was developed in response to the needs of a sizable group of trusted customers who need medium-sized homes with usable areas ranging from 167 – 200 SQM from Royal House.
Royal House is one of Thailand’s top home building companies. With more than 20 years of long service experience, it currently has a total of 8 branches including Dusit, Srinakarin, Chaengwattana, Rama 3, Rajapruke, Bangkae, Suwannabhumi and Chonburi.
Mr.Sakda Kovisuth, Managing Director of Royal House Co., Ltd., reveals today that the home building market in 2010 should improve thanks to several favorable factors, i.e. improving global economy and stable local political backdrop seen since late last year, which are expected to reinstate consumer confidence and bring back purchasing power. In addition, since the number of eastern provincial customers has been noticeably rising, the company has decided to open its first provincial branch in Chonburi.
“From mid to late last year, upbeat outlook was seen in the home building market and it is expected to continue this year. We project rising consumer purchasing power as consumers are somewhat used to the negative factors, like the World financial crisis and local political unrest. Though oil price is expected to rise, it should remain stable for a certain period of time. So I would say, this year could be a new milestone for Royal House, as we aggressively move into our first provincial market in Chonburi and we do look for more as we gradually move forward into the future.” said Mr.Sakda.
Under its “Smart Home Building” slogan, Royal House posted an as-expected sale of 800 Baht in 2009 and projects a sales target at 900 million Baht in 2010. The 10% growth is due to its confidence in positive internal and external catalysts, whether economical, political or personnel. In 2010, Royal House will continue to focus on sound construction system and solid residential structure, which it provides a guarantee of 15 long years. In addition to system and structure, Royal House also places high priority on services and craftsmanship as it has continually trained and developed all of its personnel to give quality services to its customers during the past 5 years.
Mr.Waiyawit Hanwiriyaritha, Royal House’s Design Consultant, further adds that the company has continuously developed its designs to answer to the needs of its customers in all segments. Lately, the company has launched a new inexpensive home series, which was developed in response to the needs of a sizable group of trusted customers who need medium-sized homes with usable areas ranging from 167 – 200 SQM from Royal House.
Royal House is one of Thailand’s top home building companies. With more than 20 years of long service experience, it currently has a total of 8 branches including Dusit, Srinakarin, Chaengwattana, Rama 3, Rajapruke, Bangkae, Suwannabhumi and Chonburi.
Sunday, January 24, 2010
The first time in Thailand, JARKEN launches the 4D “MINE” Series- the phenomenal super luxury in property industry - with expected revenue of 300 MB.
JARKEN Group of Companies is taking a firmer and more solid step into the year 2010 by launching “MINE” Series in 4D form of perfection, targeting only at the elite and aiming at 300 MB revenue.
Kuldej Sinthawanarong PhD., Managing Director of JARKEN Group of Companies, the avant-garde architectural organization well trusted both locally and internationally, has disclosed that “After 9 years of fulfilling the needs of our clients in Thailand as well as international, JARKEN is now well versed for our unique style of minimalism blended perfectly well with modern elegancy. With client’s satisfaction in mind, JARKEN has achieved full trust from clients to design very high end residences, be it condominium or houses with space of 200-10,000 sqm. and budget of 15-20 or over 100 MB. Our clients are Thai and foreign developers as well as individuals”
“In 2010- we adopted a more aggressive marketing strategy especially in developing and creating new designs in order to answer to the need of broader scale of clients. We changed our logo from a green cross on white background to the solid black letters of JARKEN in combination with the 4 vertical lines of different sizes. It symbolized our professionalism in external and internal architectural designs,
Last but not least is our masterpiece of architectural design “MINE” Series by JARKEN. This new residential designs reflect well each individual characteristics, the inter-relation of spaces which allow each dweller to absorb in the ambience of every corner of his/her own “home”. The house is “MINE”. Pride one has in his/her house likens pride in the achievement along the passage of past unto present when he/she is at “home”.
There are 3 designs with 3 styles in “MINE” Series, ie, Quintessence, Extravaganza and Temptation with spaces of 2,000 sqm. up and budgets of 50-100 MB. The presentation of this “MINE” Series is in the perfect form of 4D.
In addition, the Company has created very unique Magazine Ads. We’ve got great honor from clients who worked mutually with us to create 5 masterpieces under the concept “Modeling JARKEN’s Role Models” which reflected the achievement, from extensive effort, in each and every aspect of designs for construction and services delivered to clients in the JARKEN’s way. Once the campaign is launched, it will be “talk of the town” especially and extensively in the property industry” anticipated Kuldej Sinthawanarong PhD.
JARKEN focuses only on high end and super luxury targets. And that covers 5-10% of the total market. The possibility is high since we have earned recognized international awards. And that put JARKEN on the path of never-ending development in order to create, to design and to deliver services that differ. We are confident that this will be another good year for JARKEN and we will achieve 300 MB revenue with our “MINE” Series.
Kuldej Sinthawanarong PhD., Managing Director of JARKEN Group of Companies, the avant-garde architectural organization well trusted both locally and internationally, has disclosed that “After 9 years of fulfilling the needs of our clients in Thailand as well as international, JARKEN is now well versed for our unique style of minimalism blended perfectly well with modern elegancy. With client’s satisfaction in mind, JARKEN has achieved full trust from clients to design very high end residences, be it condominium or houses with space of 200-10,000 sqm. and budget of 15-20 or over 100 MB. Our clients are Thai and foreign developers as well as individuals”
“In 2010- we adopted a more aggressive marketing strategy especially in developing and creating new designs in order to answer to the need of broader scale of clients. We changed our logo from a green cross on white background to the solid black letters of JARKEN in combination with the 4 vertical lines of different sizes. It symbolized our professionalism in external and internal architectural designs,
Last but not least is our masterpiece of architectural design “MINE” Series by JARKEN. This new residential designs reflect well each individual characteristics, the inter-relation of spaces which allow each dweller to absorb in the ambience of every corner of his/her own “home”. The house is “MINE”. Pride one has in his/her house likens pride in the achievement along the passage of past unto present when he/she is at “home”.
There are 3 designs with 3 styles in “MINE” Series, ie, Quintessence, Extravaganza and Temptation with spaces of 2,000 sqm. up and budgets of 50-100 MB. The presentation of this “MINE” Series is in the perfect form of 4D.
In addition, the Company has created very unique Magazine Ads. We’ve got great honor from clients who worked mutually with us to create 5 masterpieces under the concept “Modeling JARKEN’s Role Models” which reflected the achievement, from extensive effort, in each and every aspect of designs for construction and services delivered to clients in the JARKEN’s way. Once the campaign is launched, it will be “talk of the town” especially and extensively in the property industry” anticipated Kuldej Sinthawanarong PhD.
JARKEN focuses only on high end and super luxury targets. And that covers 5-10% of the total market. The possibility is high since we have earned recognized international awards. And that put JARKEN on the path of never-ending development in order to create, to design and to deliver services that differ. We are confident that this will be another good year for JARKEN and we will achieve 300 MB revenue with our “MINE” Series.
Sunday, January 17, 2010
The Home Builder Association has laid out 4 strategic policies to develop the home building market
The Home Builder Association will aggressively move in 2010 with its 4 strategic policies including a policy to increase total home building market value to 12 billion Baht (a 10% growth YoY); consumer oriented policy; members’ capability development policy; and CSR related policy. The Association also reveals it will focus more on direct communication with the consumers; speed up its development of a sound database system; and innovate more appealing products and services for the consumers. With the said policy framework, the Association will start its 1Q with the staging of the Home Builder Focus 2010, whose on-site target is set at 500 million Baht.
Mr.Vibul Chantradilokrat , President of the Home Builder Association, discloses today that the Association has laid out 4 strategic policies in 2010 including a policy to increase total home building market value, consumer oriented policy, members’ capability development policy, and Corporate Social Responsibility (CSR) related policy. In details, the Association will attempt to grow total home building market value to hit 12 billion Baht in 2010 from 11 billion Baht in 2009 implying a 9 – 10% increase YoY. The increase is expected to come from 2 major catalysts. First is market growth through its promotion and PR activities, which are hoped to generate continuous consumer acceptance, especially the staging of its annual Home Builder and Home Builder Focus, which are its major tools used to get the consumers to know more about its members. Second is median price increase. Since consumer mode price was up from 4.2 million Baht in 2008 to 4.7 million Baht in 2009, it is expected that this upward trend would continue in 2010.
On the consumer side, the Association will set the consumers on a higher priority. In 2010, it will work closely with the Office of the Consumer Protection Board to draft out a standard contract in order to protect the consumers from unethical home building companies.In addition, the Association will directly communicate with the consumers. Emphasis will be given to the providing of useful news and home building related information. In this regard, the Association has a plan to further develop its official site (www.hba-th.org) to be a modern portal site so that the Association as well as its members could use the information gathered from the site to develop more appealing products and services for the consumers. To go with its electronic media, the Association will also initiate its first newsletter in mid February 2010 in order to publicize its activities as well as to educate the consumers. Last on this list, the Association has also been in talks with several financial institutions, whom are keen to provide special interest-rate loans to the Association’s members in order to make it easier for the consumers to own their homes.
On its members, the Association would focus on its members’ capability development, while attempting to increase the numbers of its ordinary as well as extra ordinary members so that a wider standard could be set up. At the same time, it will support its members, whom voluntarily develop their organizations in accordance with ISO standard, as well as assist them to file copy right applications for their residential models to force more design developments in the market.
On corporate social responsibility front, the Association currently has two main activities. First is its support towards the Department of Skill Development’s activities and second is its joint scholarship with Donmuang Technical College granted to students in construction and architecture majors. In 2010, these two activities will continue, while the Association is studying the possibility of adding in one extra environmental activity.
In 1Q10, the Association will translate its market development and consumer related policies through the staging of its Home Builder Focus 2010 to be held during February 26-28, 2010 at the Bangkok Convention Center, Central Plaza Ladprao. The event, which is expected to generate an on-site sale of approximately 500 million Baht, will be excellent gatherings and showcases of leading home building companies as well as financial institutions ready to provide special interest-rate loans to the consumers.
Mr.Vibul Chantradilokrat , President of the Home Builder Association, discloses today that the Association has laid out 4 strategic policies in 2010 including a policy to increase total home building market value, consumer oriented policy, members’ capability development policy, and Corporate Social Responsibility (CSR) related policy. In details, the Association will attempt to grow total home building market value to hit 12 billion Baht in 2010 from 11 billion Baht in 2009 implying a 9 – 10% increase YoY. The increase is expected to come from 2 major catalysts. First is market growth through its promotion and PR activities, which are hoped to generate continuous consumer acceptance, especially the staging of its annual Home Builder and Home Builder Focus, which are its major tools used to get the consumers to know more about its members. Second is median price increase. Since consumer mode price was up from 4.2 million Baht in 2008 to 4.7 million Baht in 2009, it is expected that this upward trend would continue in 2010.
On the consumer side, the Association will set the consumers on a higher priority. In 2010, it will work closely with the Office of the Consumer Protection Board to draft out a standard contract in order to protect the consumers from unethical home building companies.In addition, the Association will directly communicate with the consumers. Emphasis will be given to the providing of useful news and home building related information. In this regard, the Association has a plan to further develop its official site (www.hba-th.org) to be a modern portal site so that the Association as well as its members could use the information gathered from the site to develop more appealing products and services for the consumers. To go with its electronic media, the Association will also initiate its first newsletter in mid February 2010 in order to publicize its activities as well as to educate the consumers. Last on this list, the Association has also been in talks with several financial institutions, whom are keen to provide special interest-rate loans to the Association’s members in order to make it easier for the consumers to own their homes.
On its members, the Association would focus on its members’ capability development, while attempting to increase the numbers of its ordinary as well as extra ordinary members so that a wider standard could be set up. At the same time, it will support its members, whom voluntarily develop their organizations in accordance with ISO standard, as well as assist them to file copy right applications for their residential models to force more design developments in the market.
On corporate social responsibility front, the Association currently has two main activities. First is its support towards the Department of Skill Development’s activities and second is its joint scholarship with Donmuang Technical College granted to students in construction and architecture majors. In 2010, these two activities will continue, while the Association is studying the possibility of adding in one extra environmental activity.
In 1Q10, the Association will translate its market development and consumer related policies through the staging of its Home Builder Focus 2010 to be held during February 26-28, 2010 at the Bangkok Convention Center, Central Plaza Ladprao. The event, which is expected to generate an on-site sale of approximately 500 million Baht, will be excellent gatherings and showcases of leading home building companies as well as financial institutions ready to provide special interest-rate loans to the consumers.
Tuesday, December 15, 2009
“Millennium Residence @ Sukhumvit” Celebrates it’s Successful Completion of Construction
Mr. Suchad Chiaranussati, Managing Director of MR Sukhumvit Co. Ltd, the owner of “Millennium Residence @ Sukhumvit Project” said the project is now completed. The development’s unique architecture is conceived by Design Consultant, Atkins Ltd. of the United Kingdom, which is also the designer of world renowned Burj Al-Arab in Dubai.
The project is sited on a very unique and rare large piece of land area of over 12 Rai, consisting of 4 towers with 51 storey and 53 storey buildings, comprising of 604 apartment units, situated in a very residential vicinity in downtown Sukhumvit area. Located in the heart of bustling Bangkok with easy access to BTS and MRT stations, it is located on Sukhumvit Soi 16-20 within close proximity to Asoke, Rama IV roads and the CBD areas, with an approximate project value of about 10 Billion Baht. Set amidst a luscious landscape of trees and soothing water features, with many facilities like state-of the-art clubhouse, gymnasium, swimming pool, tennis court, function room, children’s playground, one would be spoilt for choice.
The project was carefully designed to be environmentally friendly and responsible, becoming the first project in Thailand to be awarded the prestigious Green Mark Gold Award by BCA International Pte. Ltd. of Singapore. The very unique and ultra modern look of aluminum and glass curtain wall façade will always enable the condominium to always look pristine and new.
Owners of the units in the condominium will enjoy stunning views of Benjakitti Lake and Bangkok’s skyline. With only 4 units per floor, allowing excellent privacy, the residents can enjoy the panoramic views from every room of their apartments.
Mr. Suchad added that at this time the project has achieved over 85% sales with a value of about 7 Billion Baht. Sales to date have been to high end customers, both Thai and Oversea buyers and expatriates in approximate equal proportions. Overseas buyers have come from all over the world such as Korea, USA, UK, Australia, Japan, Germany, Switzerland, Vietnam, Norway, Singapore and
Hong Kong etc. At present, the transfer of ownership is in process, commencing with some buyers being invited to inspect their units in December 2009.
Vital factors that help the successful sales of the project are the effective area usage layout and floor plan which has only 4 units on every floor i.e. every unit is a corner apartment affording a high degree of privacy, and enjoying stunning scenic views of Benjakitti Park as well as panoramic view of the Bangkok Skyline. The stunning ultra modern architecture is also another strong selling point of the development. It’s convenient location in Sukhumvit 16-20 is a very strong selling point for the condominium.
Speaking of forthcoming marketing and sales efforts, Khun Suchad advised we plan to work closely with banks and furniture stores to be able to provide total solution packages to offer special mortgage rates and competitively priced quality furniture which will be essential to buyers. As the project is now completed, we will move the sales office and show flats to the actual condominium itself so that potential customers can have a real feel for the beauty of the development and it’s extensive facilities.
As for the world economy, we have been through a near collapse of the global financial system and trade flows were affected hitting the real economy hard especially export oriented Asian economies. The coordinated efforts by the governments around the world have prevented a much more serious decline on the economy. We are now in a recovery period, whilst the real estate prices around the world have seen a significant mark down in some markets especially where high leverages were allowed through financial engineering. For example, in some markets the price levels have fallen 30-50% from the peak in early 2008.
On the overall picture of Thailand’s real estate market and investment trends from local and foreign investors, K’ Suchad strongly believes that property price levels in Thailand is still low relative to neighboring countries such as Vietnam, Malaysia, Hong Kong and Singapore. Our real estate price is cheap using any benchmark measurements. The value is good especially if one is to believe that inflation will return in the future. Alternative investment in cash and financial instruments yield very low returns, often below inflation rate. I believe that buying real estate in Thailand especially in Bangkok is of exceptionally good value and should have reasonable upside.
Thailand’s extensive infrastructure, excellent flight connections to around the globe, state of the art connectivity and communication network, together with it’s advanced medical treatment and health care services, Thailand will remain an attractive destination for foreign investors to invest in real estate here.
The project is sited on a very unique and rare large piece of land area of over 12 Rai, consisting of 4 towers with 51 storey and 53 storey buildings, comprising of 604 apartment units, situated in a very residential vicinity in downtown Sukhumvit area. Located in the heart of bustling Bangkok with easy access to BTS and MRT stations, it is located on Sukhumvit Soi 16-20 within close proximity to Asoke, Rama IV roads and the CBD areas, with an approximate project value of about 10 Billion Baht. Set amidst a luscious landscape of trees and soothing water features, with many facilities like state-of the-art clubhouse, gymnasium, swimming pool, tennis court, function room, children’s playground, one would be spoilt for choice.
The project was carefully designed to be environmentally friendly and responsible, becoming the first project in Thailand to be awarded the prestigious Green Mark Gold Award by BCA International Pte. Ltd. of Singapore. The very unique and ultra modern look of aluminum and glass curtain wall façade will always enable the condominium to always look pristine and new.
Owners of the units in the condominium will enjoy stunning views of Benjakitti Lake and Bangkok’s skyline. With only 4 units per floor, allowing excellent privacy, the residents can enjoy the panoramic views from every room of their apartments.
Mr. Suchad added that at this time the project has achieved over 85% sales with a value of about 7 Billion Baht. Sales to date have been to high end customers, both Thai and Oversea buyers and expatriates in approximate equal proportions. Overseas buyers have come from all over the world such as Korea, USA, UK, Australia, Japan, Germany, Switzerland, Vietnam, Norway, Singapore and
Hong Kong etc. At present, the transfer of ownership is in process, commencing with some buyers being invited to inspect their units in December 2009.
Vital factors that help the successful sales of the project are the effective area usage layout and floor plan which has only 4 units on every floor i.e. every unit is a corner apartment affording a high degree of privacy, and enjoying stunning scenic views of Benjakitti Park as well as panoramic view of the Bangkok Skyline. The stunning ultra modern architecture is also another strong selling point of the development. It’s convenient location in Sukhumvit 16-20 is a very strong selling point for the condominium.
Speaking of forthcoming marketing and sales efforts, Khun Suchad advised we plan to work closely with banks and furniture stores to be able to provide total solution packages to offer special mortgage rates and competitively priced quality furniture which will be essential to buyers. As the project is now completed, we will move the sales office and show flats to the actual condominium itself so that potential customers can have a real feel for the beauty of the development and it’s extensive facilities.
As for the world economy, we have been through a near collapse of the global financial system and trade flows were affected hitting the real economy hard especially export oriented Asian economies. The coordinated efforts by the governments around the world have prevented a much more serious decline on the economy. We are now in a recovery period, whilst the real estate prices around the world have seen a significant mark down in some markets especially where high leverages were allowed through financial engineering. For example, in some markets the price levels have fallen 30-50% from the peak in early 2008.
On the overall picture of Thailand’s real estate market and investment trends from local and foreign investors, K’ Suchad strongly believes that property price levels in Thailand is still low relative to neighboring countries such as Vietnam, Malaysia, Hong Kong and Singapore. Our real estate price is cheap using any benchmark measurements. The value is good especially if one is to believe that inflation will return in the future. Alternative investment in cash and financial instruments yield very low returns, often below inflation rate. I believe that buying real estate in Thailand especially in Bangkok is of exceptionally good value and should have reasonable upside.
Thailand’s extensive infrastructure, excellent flight connections to around the globe, state of the art connectivity and communication network, together with it’s advanced medical treatment and health care services, Thailand will remain an attractive destination for foreign investors to invest in real estate here.
Moody's says newly listed Chinese property developers face challenges
Moody's Investors Service says that eight major Chinese property developers succeeded in substantially enhancing their capital bases and liquidity positions during September-December
2009 with a total raising of HK$38.5 billion (US$4.9 billion) through IPOs on the Hong Kong Stock Exchange, but these improvements to their financial fundamentals could prove short lived.
"Debt leverage is likely to rise again and exceed the levels seen at the time of the IPOs as the sector continues with its ingrained strategy of pursuing high growth and bigger scale," says Peter Choy, a Moody's VP and Senior Credit Officer.
"It was common for the debt to total capitalization of those developers already rated by Moody's to increase -- some by 10-15% -- in the 2 years after their IPOs, and such a similar trend is therefore expected for most of the recently listed developers," says Choy.
"Most usually, funds are spent on the expansion of land banks and larger scale developments, and experience indicates that Chinese developers generally come over budget in their land acquisitions," says Choy.
Choy was speaking on the release of a special comment -- authored by him and Kaven Tsang, a Moody's Assistant Vice President and Analyst -- on the implications of recent IPOs by Chinese property developers.
"Once their listings are complete, developers will experience -- in line with past examples -- strong shareholder pressure to grow," says Choy.
"As a result, the newly listed companies are likely to see debt leverage increase over the next 2 years."
Even though the Chinese real estate market in 2010 is expected to be stable, conditions will not be strong enough to support the very aggressive targets set by the newly listed companies, and their reliance on strong pre-sales to reduce their borrowing needs may prove misplaced, the report says.
In addition, Chinese banks will likely strengthen their capital bases and reduce loan growth in 2010 to help reinforce the stability of the banking system; and, as such, availability of mortgage finance to property purchasers will not be as strong as in 2009, the report says.
2009 with a total raising of HK$38.5 billion (US$4.9 billion) through IPOs on the Hong Kong Stock Exchange, but these improvements to their financial fundamentals could prove short lived.
"Debt leverage is likely to rise again and exceed the levels seen at the time of the IPOs as the sector continues with its ingrained strategy of pursuing high growth and bigger scale," says Peter Choy, a Moody's VP and Senior Credit Officer.
"It was common for the debt to total capitalization of those developers already rated by Moody's to increase -- some by 10-15% -- in the 2 years after their IPOs, and such a similar trend is therefore expected for most of the recently listed developers," says Choy.
"Most usually, funds are spent on the expansion of land banks and larger scale developments, and experience indicates that Chinese developers generally come over budget in their land acquisitions," says Choy.
Choy was speaking on the release of a special comment -- authored by him and Kaven Tsang, a Moody's Assistant Vice President and Analyst -- on the implications of recent IPOs by Chinese property developers.
"Once their listings are complete, developers will experience -- in line with past examples -- strong shareholder pressure to grow," says Choy.
"As a result, the newly listed companies are likely to see debt leverage increase over the next 2 years."
Even though the Chinese real estate market in 2010 is expected to be stable, conditions will not be strong enough to support the very aggressive targets set by the newly listed companies, and their reliance on strong pre-sales to reduce their borrowing needs may prove misplaced, the report says.
In addition, Chinese banks will likely strengthen their capital bases and reduce loan growth in 2010 to help reinforce the stability of the banking system; and, as such, availability of mortgage finance to property purchasers will not be as strong as in 2009, the report says.
Thursday, November 19, 2009
Three State Banks Ink MOU with Five Associations to Boost Thai Construction Business Abroad
EXIM Thailand, Krung Thai Bank and SME BANK reached an agreement with 5 construction-related associations to provide financial support for Thai contractors in order to enhance their competitiveness abroad, especially in 6 target countries, namely, Libya, Bahrain, Qatar, India, Vietnam and Brunei.
Dr. Apichai Boontherawara, President of Export-Import Bank of Thailand (EXIM Thailand); Mr. Apisak Tantivorawong, President of Krung Thai Bank Public Company Limited; and Mr. Soros Sakornvisava, President of Small and Medium Enterprise Development Bank of Thailand (SME BANK); signed a Memorandum of Understanding (MOU) with representatives from 5 associations, namely, Consulting Engineers Association of Thailand (CEAT), Association of Siamese Architects under Royal Patronage, Thai Contractors Association under H.M. the King’s Patronage, Thai Real Estate Association, and Thai Electrical & Mechanical Contractors Association at the Government House on November 5, 2009. The MOU signing ceremony was presided over by Mr. Abhisit Vejjajiva, Prime Minister. The objective of this agreement is to provide financial support for Thai entrepreneurs in the construction and real estate development industries seeking overseas contracts, thus, making them more competitive in the global arena.
Under the MOU, the three banks will cooperate in giving support and financial assistance to members of the 5 associations wishing to bid for contracts abroad. The goal is to enable Thai contractors to succeed more in overseas project bidding, especially in 6 target countries, namely, Libya, Bahrain, Qatar, India, Vietnam and Brunei. In the future, the target country list is expected to include other countries in the ASEAN and African regions.
Dr. Apichai Boontherawara, EXIM Thailand’ President, said after the signing ceremony that the cooperation between the 3 banks and the 5 associations is aimed to sharpen the competitive edge of the Thai construction sector on the world stage and help Thai contractors achieve sustainable growth while earning foreign exchange. This is in line with EXIM Thailand’s mandate as a development bank and also addresses the Government’s economic stimulation policy.
Dr. Apichai Boontherawara, President of Export-Import Bank of Thailand (EXIM Thailand); Mr. Apisak Tantivorawong, President of Krung Thai Bank Public Company Limited; and Mr. Soros Sakornvisava, President of Small and Medium Enterprise Development Bank of Thailand (SME BANK); signed a Memorandum of Understanding (MOU) with representatives from 5 associations, namely, Consulting Engineers Association of Thailand (CEAT), Association of Siamese Architects under Royal Patronage, Thai Contractors Association under H.M. the King’s Patronage, Thai Real Estate Association, and Thai Electrical & Mechanical Contractors Association at the Government House on November 5, 2009. The MOU signing ceremony was presided over by Mr. Abhisit Vejjajiva, Prime Minister. The objective of this agreement is to provide financial support for Thai entrepreneurs in the construction and real estate development industries seeking overseas contracts, thus, making them more competitive in the global arena.
Under the MOU, the three banks will cooperate in giving support and financial assistance to members of the 5 associations wishing to bid for contracts abroad. The goal is to enable Thai contractors to succeed more in overseas project bidding, especially in 6 target countries, namely, Libya, Bahrain, Qatar, India, Vietnam and Brunei. In the future, the target country list is expected to include other countries in the ASEAN and African regions.
Dr. Apichai Boontherawara, EXIM Thailand’ President, said after the signing ceremony that the cooperation between the 3 banks and the 5 associations is aimed to sharpen the competitive edge of the Thai construction sector on the world stage and help Thai contractors achieve sustainable growth while earning foreign exchange. This is in line with EXIM Thailand’s mandate as a development bank and also addresses the Government’s economic stimulation policy.
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