Low-rise residential developer Frasers Property Home Thailand (FPH) will add condos to its portfolio through both greenfield development and a takeover, with Grand Unity Development being the most likely candidate.
Saenphin Sukhee, chief executive of FPH, said the condo development business had growth potential this year as many developers had slowed construction during the pandemic and shifted to low-rise houses, particularly in the luxury segment.
"Our aim for the condo business will be both organic and inorganic growth," he said on Wednesday. "Target locations will be within 300 metres of a mass transit station or shopping mall."
Preferred zones include eastern Bangkok, Lat Phrao, Ratchadaphisek and Ram Intra.
At present, the company has three plots of land for the development of condo projects, of which two are on Ratchadaphisek Soi 7 in Huai Khwang and on Lang Suan Road.
The Ratchada plot will be prepped for a low-rise condominium, Klos Ratchada, with units sized from 25 square metres and priced between 3-5 million baht a unit. The project will be launched in the second half of 2023.
Mr Saenphin said the company was also in talks to acquire a condo developer but could not reveal details at the moment. The deal is likely to be finalised in mid-2023.
The most likely choice would be condo developer Grand Unity Development Co as both FPH's parent firm, Frasers Property (Thailand) Plc, and Grand Unity's parent firm, Univentures Plc (UV), have the same major shareholder: the Sirivadhanabhakdi family.
However, Mr Saenphin neither confirmed nor denied the deal.
According to UV's 2022 annual report, Grand Unity had a total of 10 condo projects on hand with around 2,300 units worth a combined 8.8 billion baht remaining unsold, as of Sept 30, 2022.
Most of the projects are located near a mass transit station, with eight projects completed during 2018-20 featuring 1,700 ready-to-move-in units worth 7.6 billion baht, which could be realised as revenue once sold.
UV said in the report that it had restructured its investments to balance and diversify risks by putting money into new businesses such as power plants and commercial refrigerators.
Mr Saenphin said condo projects which FPH would acquire could be launched next year, as the firm would launch only one on Ratchadaphisek Soi 7 in 2023, which will be a greenfield development.
This year FPH is preparing to launch 11 new residential projects worth a total of more than 17.5 billion baht, with the target to have 13 billion baht in revenue, a growth of 14% from 11.4 billion baht in 2022.
Seven projects will be single detached houses, mainly in the luxury segment with units priced up to 120 million baht. Two will be townhouse projects, one will be a duplex house, and one will be a condo.
"We will reduce the launch of townhouse projects to 20%, from 60-70% in the past, and double the launch of single detached house projects as the existing townhouse inventory remains high," Mr Saenphin said.
The purchasing power of single detached house buyers has also been healthy, and stronger than that of townhouse buyers.
Last year, two thirds of the firm's single detached house customers used cash for unit transfers, while townhouse customers had a bank rejection rate of 50-60%, which is high but has fallen from 80% during the pandemic.
