The Nation July 1, 2008

Firms now see construction expenses stabilising, will factor them into projects

developers are planning to launch Bt50 billion worth of city-condominium projects in the second half. But home-buyers will have to shell out more money, because many firms have hammered in the rise in raw-material costs while pricing new projects.

With construction costs expected to stabilise in the second half of the year, developers are planning to launch city-condominium projects worth Bt50 billion during that period.

However, home-buyers will have to shell out more, because many developers have factored in the rise in raw-material costs while pricing new projects.

Many companies, including Plus Property, Sansiri, Property Perfect, Asian Property Development, LPN Development and Chaopraya Mahanakorn, delayed the launch of projects in the first half in the face of rising construction costs.

Property Perfect put off launching of six residential projects worth Bt18.3 billion until the second half, said chief operating officer Teerachon Manomaiphibul. Two of the six projects, Metro Par Ratchada and Metro Park Sukhumvit, are condominiums. The projects are worth Bt4 billion each.

"We delayed launching new city-condominium projects in the first half because we could not estimate how far the construction costs would climb and so could not decide prices for projects. Raw-material prices have seen a rapid rise since last year up through the first half. But we believe the prices will be stable [in the second half]. So we'll launch two city-condominium projects worth a combined Bt8 billion. We've factored in the rise in construction costs while setting prices for the new projects," he said.

LPN Development managing director Opas Sripayak said the company planned to launch four new city-condominium projects under the Lumpini Condo Town brand. The projects, worth about Bt8billion, will target the lower-income group by offering homes at prices under Bt1 million.

"The successful launch of Lumpini Place Rama IX-Ratchada last month boosted confidence in our business-expansion plans for the second half of the year," he said.

Asian Property Development senior executive vice president Visanu Suchatlumpong said his company planned to launch five new city-condominium projects worth a combined Bt10.5 billion in the second half.

They are the Bt800-million The Address on Phya Thai Road, the Bt3.2-billion Life@MRT Ratchada, the Bt1.6-billion Life@Ratchada-Huai Khwang and two projects worth Bt4.9 billion each in Sathorn Soi 12 and Sukhumvit Soi 28.

The company has revised prices 10-14 per cent for the new projects. The average price has risen from Bt70,000 a square metre to between Bt80,000 and Bt90,000, depending on the project's location, Visanu said.

"We've had to raise prices for new projects, in order to offset the rise in construction costs," he said.

Sansiri subsidiary Plus Property also plans to launch six new city-condominium projects worth a combined Bt10 billion in the second half.

Plus Property CEO Mayta Chanchamcharat said his company had delayed the city-condominium projects, because it wanted raw-material prices to stabilise before hammering in the rise in construction costs into new projects.

The company will launch the six projects under the My Condo label but with revised prices. The average prices will rise from Bt1.1 million to between Bt1.9 million and Bt2.1 million.

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