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Apartment in Bangkok Developers Forced to Change Strategies

By on Oct 22, 2013 in Property News

Higher land prices, rising construction-material costs and a labour shortage are forcing leading apartment in Bangkok property developers to revise their business strategies for next year. Several companies are delaying the launch of high-rise condominium projects, focusing instead on low-rise condominiums, and some have decided to wait for environmental impact assessment (EIA) permits before launching projects onto the market.

Residential prices, meanwhile, are showing signs of increasing by between 10 and 15 per cent in 2014 from this year’s level, property experts said.

Sansiri president Srettha Thavisin, said the company would revise the scheduling of its condominium launches next year by only putting them on the market after they receive an EIA permit. “This year, we have launched more new condominium projects in Bangkok and surrounding provinces. These will take some time to construct, and we have a backlog worth more than Bt60 billion that will be enough to generate revenue through 2016. As a result, we do not need to launch more projects next year,” he said. The developer will focus next year on building and delivering homes to current customers on time, which will enable revenue and net-profit growth of just under 10 per cent, he added.

Supalai managing director Atip Bichanond said his company would reduce the number of new condominium launches next year by concentrating on construction of its existing projects and on-time delivery to customers. “The labour shortage is the main problem for property firms at this time, and it will worsen next year when the government’s infrastructure projects further squeeze labour from the market,” he said.

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