Asian Property Development chief executive officer Anuphong Assavabhokhin said in an interview with The Nation that one of his company's projects would be in the border province of Udon Thani to help investors doing business in Vientiane, Laos.
Silhouette of construction workers
"We believe that when the AEC becomes effective it will boost the demand for homes in border provinces, because Thailand has potential to be a residential and hospitality hub in this region," Assavabhokhin said.
The company is studying where to locate the other two projects. The three upcountry condo complexes are part of its business plan to launch 20 residential projects worth THB22 billion (US740 million) this year. Five of these will be condominiums, five detached-house projects and the rest townhouse projects.
Assavabhokhin told the newspaper, the property market recovered last year from the flood disaster in 2011 faster than estimated, especially for condos. As a result, real-estate firms including APD enjoyed better-than-expected financial results.
This year, the company estimates that its presales will grow by 15-20 percent. Some revenue will come from its backlog, currently valued at THB27.8 billion (US$935 million). Meanwhile, the newspaper reported that APP has set aside an investment budget of THB6 billion (US$201 million) to buy land on which to develop residential projects next year.
"Our investment budget will come from both our cash flow and issuance of a debenture worth between THB3 billion (US$100 million) and THB4 billion (US$134 million) this year," Assavabhokhin said. "We take care to keep our debt from exceeding 1:1 because this will secure our business against any risk from unforeseen situations."
Assavabhokhin believes there is no indication of a property bubble in Thailand currently even though some locations are oversupplied. Overall, there is enough demand to absorb the supply in the market.
Meanwhile, the real estate business has been controlled by the commercial banks, which are careful to investigate customers' qualifications for loans, including project loans to developers. Currently, APD sees about 15 percent of its customers rejected for mortgages. This is one way to control speculation in the housing market, according to The Nation.
"We believe that the property market this year will still be stronger than before the financial crisis in 1997," Anuphong said.
He added that the main problem facing the property sector now was a labour shortage. APD is dealing with this by expanding its prefabrication system from only two-storey townhouses priced at no more than THB2 million (US$67 million) to three-storey units in the same price range. This helps the company deliver completed homes to its customers on time, speeding up the construction process from 200 days per unit to just 120 days. Currently, the company uses prefabrication for about 30 percent of its production.
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