Posts Tagged ‘land’

Thai-focused fund favours property and construction

Wednesday, September 15th, 2010

Alex Klein Tank of DK Capital outlines a 10-stock portfolio that is 70% weighted towards property and construction due to valuation and previous trading levels.

The Thai-focused Elite Fund is managed by PYN Fund Management. It has a 10-year annualised return of 22.1%, ranking it third on Morningstar’s fund performance list after the top two of Russian Prosperity Fund and East Capital Russia Fund. The fund was up 109% in 2009 and is up 47% year-to-date. 

The Elite fund stands at €62 million ($79 million), its assets having fallen to €30 million at the end of 2008. It also has a sister fund, the Asia regional Populus Fund. In all, 99% of investors in both of the funds originate from Finland. There is a 1% management fee and a 12% performance fee on the funds. 

Representing the funds in Bangkok is Alex Klein Tank of DK Capital, who notes that the Thai-focused fund is up 880% since inception in 1999 compared with the Stock Exchange of Thailand (SET) Index increase of 146%.

“We have a concentrated 10-stock portfolio that is 70% weighted towards property and construction due to valuation and previous trading levels,” he says. “Our portfolio has a 6.4 times P/E ratio and 7.73 times dividend yield.” 

The Elite portfolio’s top holdings are Sansiri, Property Perfect, Major Development and Noble Development.  

Since the Asian financial crisis of the late 1990s, the differentiation between the SET Index and the Thai property developer index has widened from approximately 15% to 60%. But with developers’ underperformance during that period, their improved cashflow and better trading conditions, that gap may close some. 

Klein Tank also perceives a resurrection to the infrastructure capital expenditure cycle, with the Democrat/Bhum Jai Thai Party coalition government starting to roll out multi-year infrastructure projects.

These include further development to the Bangkok subway, with five contracts for the Blue line having recently been handed out, and further movement on an intra-Southeast Asia high-speed rail link.

The land value by the side of the Bangkok Mass Transit System (BTS) railway has doubled in price since 2000, while land alongside the subway has increased by 50%.

source – www.asianinvestor.net 

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Land prices soar

Thursday, August 26th, 2010

Land prices in Bangkok’s central business districts have shown increases of between 10 and 20 per cent while demand for housing rises, property experts say.

Popular locations for condominium projects include Phoenchit, Sathorn, the head of Sukhumvit Road, Pathumwan and Phaya Thai.

 Ratchapruk, Soi Watcharapol, Chaeng Wattana and Rama II are popular for low-rise residences, including single detached houses, townhouses and twin houses.

 Phloenchit Road recorded a high price of Bt1.5 million per square wah (Bt375,000 per square metre) in a deal concluded in June by Sansiri.

 Meanwhile, Sathorn, the head of Sukhumvit Road, Pathumwan and Phaya Thai have recorded prices averaging Bt100,000-Bt200,000 per square metre, according to the Treasury Department.

 Land prices in the Ratchapruk, Soi Watcharapol, Chaeng Wattana, Kubon and Rama II areas have recorded prices between Bt7,500 and Bt25,000 per square metre. This is an increase of between 10 and 20 per cent from prices seen two years ago, property experts said.

 The Agency for Real Estate Affairs estimates that these locations have been saturated with more than 100 residential projects worth a total of more than Bt100 billion.

 SC Asset Corporation chief operating officer Kree Dejchai said land prices on Ratchapruk Road had been inflated by up to 20 per cent – from an average of Bt20,000 per square metre two years ago to Bt25,000 – after many developers launched luxury residential projects in this location.

 Most of the projects are luxury homes priced from Bt3 million to more than Bt100 million.

 He added that the area around Soi Watcharapol and Soi Kubon was one of the destinations for low-rise residences, especially single detached houses priced between Bt3 million and Bt10 million per unit.

 ”In my view, the location around Suvarnabhumi Airport is not a prime area for residential projects,” he said.

 The Agency for Real Estate Affairs’ managing director, Wasan Kongchan, said land prices had risen significantly in the first half of this year when compared with last year because most property developers have had to buy land after successfully selling out their residential projects from last year.

 The rising land prices would either drive up home prices or result in smaller sizes of residences to maintain prices near last year’s levels, Business Housing Association president Issara Boonyong said.

 He added that land prices in Greater Bangkok never dropped despite the slump in the country’s economy.

 According to research by Home Buyers Guide, 40 per cent of home buyers seek units priced between Bt1 million and Bt2 million, 20.7 per cent demand prices between Bt2.1 million and Bt3 million per unit, and 14 per cent demand residential prices lower than Bt1 million per unit.

 To support the demand for residential prices below Bt3 million per unit amid rising land prices, property developers will have to reduce their projects’ unit sizes to maintain affordability, Issara said.

 ”We believe the trend of residential projects will be towards smaller units. We will see smaller condominium units in suburban locations close to the mass transit system, and townhouses will replace single detached houses in the suburbs in the future.”

 

source – www.nationmultimedia.com

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B33bn in projects in Supalai pipeline

Wednesday, August 11th, 2010

Supalai Plc plans to launch at least 28 property projects worth 33 billion baht in the next 18 months, says executive director Tritecha Tangmatitham.

The company has 26 plots of land and is in talks with owners of two more plots for future development. Half of the total would accommodate 13 new developments, mainly low-rise units, worth around 13 billion baht over the rest of this year. Another 15 projects worth a combined 20 billion baht would be launched next year.

Supalai has already used up its annual budget of 3.5 billion to acquire land this year. It plans to invest another 1 billion in more plots.

“We are being more aggressive in acquiring new plots of land this year because sales were better than our expectations and we have a good chance to compete in buying land at a time when other small and medium-sized developers are slowing their investment,” Mr Tritecha said.

In the first seven months, Supalai introduced only two projects worth a combined 4 billion baht due to the political crisis. During the same period, it recorded 8.1 billion baht in presales, up 20% from the same period last year. Of the total sales, 55% came from condominiums and the rest from single houses and townhouses.

With more new projects planned for the rest of the year, it expects presales to exceed its 15-billion-baht target.

During the first half, it transferred residential units worth 5 billion baht to buyers and expects full-year transfers to exceed the target of 11 billion baht because its current sales backlog of 18.7 billion is higher than its target. Of the backlog, at least 5.4 billion baht would be realised by the end of the year.

Mr Tritecha said the expiry of tax incentives in June pushed down Supalai’s net profit margin in the second quarter to 22% from 26% while its gross margin in the first half was 43%.

Managing director Atip Bhijanonda said the 9% rise in the cost of development in the second half would reflect the expiry of of tax incentives, from which developers also benefited, to a total of 4%, with the remaining 5% from higher material costs. Contractors have increased their charges by 3-5%, he said, but any rise in housing prices would depend on competition and location.

Mr Tritecha said home demand would also be affected by higher interest rates.

The company plans to launch the BoI-supported City Home Srinakarin condominium with 1,320 units sized at 30-32 square metres and priced from 30,500 baht per sq m next weekend.

Supalai shares (SPALI) closed yesterday on the SET at 12.50 baht, down 30 satang, in trade worth 122.96 million

 

source – www.bangkokpost.com

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