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Pace Development Unveils Bt10 bn Residential Project Plans, Expects Profit This Year

By on Mar 21, 2016 in Property News, Residential

Pace Development Corporation Plc has set aside an investment budget of up to Bt3 billion to buy undeveloped land for developing residential projects worth up to Bt10 billion.

The company also plans to acquire some land in Japan this year to develop residential projects.

Up to Bt2 billion of the total investment budget this year will be used to buy undeveloped land in Bangkok to develop residential projects valued at Bt6 billion. The balance Bt1 billion will be spent to buy land in Niseko, a famous ski-resort town in Hokkaido in Japan, to develop villas worth between Bt2 billion and Bt3 billion this year, the company’s chief executive officer, Sorapoj Techakraisri, said at press conference at the weekend.

The company’s investment budget will come from its initial cash flow and issue of debentures worth up to Bt1 billion in the second half of this year. The company had raised Bt1.1 billion from the issue of debentures early this month.

Sorapoj said the company plans to launch two new residential projects worth Bt10 billion this year. The first project already has land to develop a condominium project worth Bt3 billion, in the second half of this year, located at Narathiwas Rajanakarin. The next condominium project will be worth up to Bt7 billion in the last quarter of this year.

“We will spend our budget of Bt2 billion to buy undeveloped land to develop the second project. This is a part of our business strategy to generate sustainable revenue averaging Bt10 billion a year,” he said.

Currently, the company has total projects for sale valued at Bt28.5 billion. They awaiting transfer to its customers. Of backlog worth Bt14 billion, up to Bt10 billion will be transferred to buyers this year. This will be booked as part of its total revenue for this year. The rest will be booked as revenue next year, he said.

They come from its three residential projects: Ritz-Carlton Residences, Bangkok at MahaNakhon, which has already sold 70 per cent of the total project value of Bt14 billion; Nimit Langsuan, which has sold 90 per cent of total project value of Bt7 billion; and MahaSamutr Villas, which has sold 40 per cent of the units – whose prices start Bt50 million per unit – worth Bt4 billion.

“We believe that we will transfer some completed units of Ritz-Carlton Residences and MahaSamutr Villas to our customers in the second half of this year. This will drive our total revenue to achieve our target of Bt10 billion this year and we also will record net profit this year,” he said.

At the end of 2015, Pace Development Corporation Plc recorded total revenue of Bt3.5 billion and net loss of Bt1.78 billion. This is the third year the company has reported net loss since being listed on the Stock Exchange of Thailand. The company also recorded debt-to-equity ratio of 8:1, higher than other listed property firms.

However, Sorapoj said that at the end of this year, the company’s debt-to-equity ratio will not be over 3.5:1 when the company transfers the residential projects to the customers and pays back loans to the banks.

Meanwhile, the company also plans to open new branches of Dean & Deluca, a food restaurant. It plans two or three branches in Thailand and four to five branches in the US, where it currently has 14 branches. The company aims to open up to 100 branches in the US next year, he said.

The company targets total revenue from Dean & Deluca of up to $100 million this year, up from $90 million last year.

“This year, we will focus on the transfer our residential projects to our customers rather than expand the new branches of Dean & Deluca. However, next year we will expand the branches of the food restaurant in Thailand, the US, the Philippines, Japan, South Korea, Singapore, Malaysia, Kuwait, and Dubai. We also will open new branches in other countries next year,” he said.

Source: The Nation – 21 March

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