Real Estate and property news from Thailand's leading English Language Newspaper
Property Perfect Eyes Foreign Retail Partner
Jun 16, 2012
Property Perfect (PF), the SET-listed developer, is looking for a foreign partner to help it diversify into retail and is setting up a property fund to improve its revenue structure and funding sources.
"We have land banks in prime locations that are surrounded by housing and condominium projects. They are suitable for developing a mall to serve these communities. We're interested in the retail business because it will increase regular income for the company," said chief executive Chainid Ngowsirimanee.
"We're also looking for a big foreign player in the retail business to be our partner."
The company will begin construction on the retail project next year even though a location has yet to be finalised and should be able to realise revenue from the business by 2014.
"We've prepared four locations for this, on Ratchadaphisek, Sathon, Ram Intra and Bang Na-Trat roads. At present, PF has four businesses - residential, construction, retail and property - in university campus areas," said Mr Chainid.
The company is targetting presales of 16 billion baht this year, up by 66% from last year. Annual revenue recognition is projected at 12.6 billion baht, up by 56%.
The company's net profit margin is expected to rise in line with industry averages due to lower interest rates and a fall in the cost of goods sold.
"We also plan to reduce the cost of funding by issuing 3 billion baht worth of corporate bonds and setting up a 1-billion-baht property fund," he said.
He said the company will sell two dormitories to the fund, near Chiang Mai University and Mahidol University and worth 500 million baht each.
"The property fund is a new financial tool strengthening our financial position by unlocking the debt burden," said Mr Chainid.
Earlier this year, the company announced a capital increase of 800 million baht.
Proceeds will be used for refinancing and to invest in the new projects.
By year-end, shareholders' equity is expected to reach 10 billion baht, from 7.5 billion baht last year before the capital increase.
The debt-to-equity ratio will decline to 1.48 times this year and 0.69 times in 2014 from 1.74 times last year.
The company will become an SET100 constituent stock next month.
Shares of PF closed yesterday on the SET at 1.15 baht, up seven satang, in trade worth 344 million baht.