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Industry’s Quick Overview
By admin | June 5, 2009
The Thailand’s real estate industry at present has been dominated by the top 8 companies which occupy more than the 60% of total market share or approximately 120,000 Million Baht from the total market cap of 200,000 Million Baht. Strong balance sheets and excellent cash positions are now allowing those top companies to purchase development land at great prices.
Recently, several top companies, including Land & Houses, Preuksa, Sansiri, Asian Property Development, LPN and Property Perfect revealed to the public that they have set aside more than 10 Billion Baht to buy undeveloped land in the greater Bangkok area in the second half of the year.
Most top companies tend to raise the huge fund through issuing the debenture with the attractive rate of annual interest. The funds will be mostly used for working capital and for buying land. In this year, the above companies have together issued the debentures for more than 20,000 Million Baht. Meanwhile, the small and medium real estate firms have to face the problem of lacking working capital from the financial institution and they can’t issue the debentures as well. Those companies, hence, eventually force themselves to business merging or business exit.
In terms of resale housing, the economic crisis has inevitably delivered the negative effect to the industry as it influences to the capability of debt payment for many house owners so that they finally decide to sale their houses. Statistically, the amount of 60,000 – 70,000 resale housing units will be enter to the market each year. But up to now the amount of resale houses in the industry has been reached its height to more than 200,000 units or approximately 450,000 Million Baht and it has been expected more likely to come within the second half of this year. In contrary, the demand is likely to continue shortage in which it has been recorded for 30% dropped on sale volume in comparison to the last quarter of the previous year.
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