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Developers banking on megaprojects – Politics and economy give sentiment boost

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Medium-sized developers have pinned their hopes on the country’s economic growth and government spending in megaprojects to help boost the property market this year.

Dusadee Tancharoen, managing director of SET-listed developer MK Real Estate Development Plc, said the Thai property market will continue growing, driven by government investment and people’s confidence in the political situation.

“The property market in the first half of 2017 slowed as most developers focused on selling inventory rather than launching new projects,” she said. “In the second half, the market improved after movement on the government’s investment in transport networks and infrastructure projects.”

Plans for a general election in 2018 have also boosted confidence among investors, said Ms Dusadee.

The Eastern Economic Corridor (EEC) is another key driver boosting economic sentiment and property investment, she said. MK has a housing project in Bang Na that received good feedback with a sales rate of 80% in the first phase during its October launch.

“Better sentiment in the fourth quarter of last year will continue this year. The property market is expected to grow 6-8% in 2018, compared with growth of 2-3% last year,” she said.

Chaiyan Chakarakul, managing director of SET-listed developer Lalin Property Plc, said economic expansion for Thailand and the world, on top of government investment in the EEC and mass transit lines, will help drive the Thai property market to grow 5-7% in 2018.

“There are good signs for the Thai economy. It will expand 3.8-3.9% this year, being boosted by an expansion in exports and tourism, government spending on infrastructure projects and a general election by the end of 2018 or early 2019,” he said.

This year Lalin plans to launch 8-10 new projects worth 4.5-5 billion baht in Greater Bangkok and beyond.

The company expects 4.4 billion baht in presales and 4 billion in revenue by year-end, up 15% from last year.

He said positive factors will include a reduction in the household debt-to-GDP ratio to 78% and steady interest rates despite an uptick in US interest rates. These factors will help boost purchasing power in the housing market.

About 80% of the new projects will be in Greater Bangkok and the rest in provinces, including Chachoengsao and Chon Buri, where the firm will develop units priced 2-6 million baht.

Lalin will spend 1 billion baht to buy new plots of land. The company will also issue bonds worth 1.1-1.2 billion baht in April, which will expire in three years, to support business expansion.





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