Singha Estate Plc, a SET-listed property firm has announced the postponement of the launch of its new luxury condo project on Rang Nam Road that was originally planned to be launched in October 2019 to February 2020 pending assessment of the market conditions then. The company said that the current situation was unfavourable and too risky as the condo market sentiments were down.
The company said that it would not take a risk if it was not confident in the sales rate of a new condo project. Already many other developers were having problems and the take up rates were extremely low during new presales and launches.
The company further said that the despite being was an aggressive firm it preferred to be cautious and monitor the market condition. Unless the market sales rate for a new projects exceed 30% and keep rising, it will not launch any new projects.
The planned condo is situated on a plot opposite duty-free mall King Power Complex Rangnam on Rang Nam Road. Sales value was projected at Bt 4.5 billion.
Singha Estate revenue in 2019 is forecasted to be around Bt 15 billion , below its goal ofBt 20 billion, as the hotel business in Thailand slightly slowed, the housing market is sluggish, the loan-to-value (LTV) limits in the past affected demand and there is as a result an oversupply of condos.
For January to June 2019, Singha Estate recorded Bt 164 million in normalised profit, up 6.8 times fromBt 24 million in the same period last year. Revenue rose 158% to Bt 5.35 billion from Bt 2 billion. As of the end of June 2019, Singha Estate had a sales backlog of Bt 11 billion and Nirvana Daii Plc, one of its subsidiaries, had Bt 2.5 billion. Of Singha Estate's sales backlog of which Bt 2.8 billion from The Esse Asoke condo and Bt 2 billion from The Esse at Singha Complex condo will be realised in the second half of 2019. First-half revenue comprised Bt 2.96 billion from housing and condo sales, up 319% year-on-year, and Bt 2.28 billion from rental and services, up 77%.
The largest portion of rental and services was from the hospitality business with Bt 1.75 billion baht, up 145%. S Hotels & Resorts Plc, one of its subsidiaries, plans an IPO on the Stock Exchange of Thailand in the end of 2019. Singha Estate expects its net debt-to-equity ratio to reduce to 1 time by the end of the year from 1.39 times in the second quarter. S Hotels & Resorts operates a hospitality business, owning 39 hotels with a total of 4,647 rooms in Thailand, Fiji, Mauritius, Britain and the Maldives.
Its also a new trend emerging that many property developers are now suddenly branching into the hotel and hospitality business which many sceptics are saying in very short term will also result in a hotel room glut.