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Preuksa to gain from BoI rule change
By admin | July 3, 2009
Prefab technique nets bulk of tax cuts
Preuksa Real Estate, the country’s second-largest developer and housing market leader, is the only listed developer to fit requirements for BoI homes in Zone 1 or Greater Bangkok.
Developers now qualify for a tax reduction through the Board of Investment (BoI) by building at least 50 housing units (townhouses or detached houses) with a minimum size of 70 square metres (up from 31 sq m) and a maximum price of 1.2 million baht (up from 600,000 baht). Apartments must be at least 28 sq m and priced no more than 1 million baht.
Preuksa will benefit due to its greater readiness of capital and in units on hand and in the pipeline priced less than 1.2 million baht. The company expects its percentage of BoI homes to jump from 12% to 30% this year.
PS expects at least 10,000 units worth about 11 billion baht - three billion from new launches - that fit BoI’s requirements, said chief operating officer Prasert Taedullayasatit.
“The property market in the second half will be more active [than the first half] while homebuyers will choose from a greater variety of products with more quality, better prices and locations,” he said.
PS is planning new strategies in response to the new requirements. It expects to gain about 600-700 million baht from BoI incentives, which it may use in campaigns and promotions.
Listed developers MK Real Estate Plc (MK) and Property Perfect Plc (PF)agreed that Preuksa will benefit most from the change in BoI’s policy.
MK marketing manager Tunya Siripuchaka said PS will gain most from BoI’s new requirements as they target housing units built by prefabrication,PS’s construction technique.
“It’s quite risky on margin [to tap this market] with traditional construction techniques,” she said.”It also depends on land plot and location.”
MK’s products are outside the scope of BoI support as its units are priced higher than 2 million baht. But it plans to launch townhouses priced from 1.9 to 2 million baht in the next quarter.
“[Other developers] should let PS go through in this segment,” said PF chief executive Chainid N. Sirimanee.
“Definitely no for us. We will neither play in this segment nor develop brands as we have no expertise. Our prefab construction just started,” he said.
But N.C. Housing Plc (NCH) is considering new products and brands for BoI’s new house requirements.
NCH’s managing director Somchao Tantaterdtham said the company will select locations and estimate development costs but is concerned about this segment’s access to home loan.
L.P.N. Development Plc’s chief executive Tikhamporn Plengsrisuk said new BoI home requirements will give homebuyers in the lower-priced segment a chance to live in better products in urban areas.
“We cannot say at the moment that our products can enter the new BoI home requirements,” he said.
LPN’s condominiums sized from 30 sq m fit the space requirements, but most of its sites are priced higher than 50,000 baht per sq m.
Preuksa to gain from BoI rule change
Source - Bangkok Post (Eng)
June 16, 2009
By KANANA KATHARANGSIPORN
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