Mr. Vittakarn Chandavimol, Chief Corporate Strategy and Creation, AP (Thailand) Public Company Limited (SET: AP), said that the pandemic over the last two year has put the economy of Thailand in the doldrums, which has unavoidably affected the purchasing power of consumers in many sectors. For the real estate industry in the past two years, according to Mr. Vittakarn, “we have found demand for buying and renting is still there. It is only that demand has changed its form in response to circumstances. If we compare it to the major flood in 2011, that year the Thai economy suffered a slump but the real estate industry, particularly the condominium sector, performed very well. The current COVID-19 crisis is similar to the big flood in that the real estate industry has been left intact. It is just that it has transformed in response to changing behavior as time goes by.”
Last year, the real estate industry was a key driver in the economy of Thailand. According to Krungsri Research, the industry accounts for 8% of Thailand’s gross domestic product (GDP) and played an important part in driving the economy. It contributed to sizable money in circulation, more employment and income while also supporting other industries growing side by side e.g. construction, building materials, financial institutions, home appliances and furniture and home decoration. Business performances of the industry’s top 5 companies were marked by positive growth. For AP Thailand, 2021 was the year it was projected to close with nearly Bht 40,000 million worth of ownership transfer. It shows that “residential property development” is still the main sector that allows the industry to get through crisis after crisis past and present.
2021 AP THAILAND GROWTH THROUGH EMPOWER LIVING
Last year was another year AP Thailand was able to weather the crisis. It was a year of strength and the company was able to efficiently maintain its growth momentum amid a major reset. Three major strategies give the company’s competitive advantages. They are 1. Ready-To-Sell Portfolio Management By making its products readily available to homebuyers in multiple locations, the company creates more opportunities and competitive advantages. Last year, AP had more than 117 projects available to homebuyers across Thailand and was able to record Bht 35,050 million worth of presales. Low-rise products – single detached homes and townhomes – continued to be the main growth contributors. In addition, the company was able to close sales for many of its projects.
2. Cash Flow Management Throughout the pandemic period, the company has maintained an excellent financial stability resulting in a continued reduction in its debt-to-equity ratio. As at the end of 2021, the company had a low debt-to-equity of 0.58.
3. Digital Competency It is part of an important roadmap AP has used as key to driving its business amid changes in every touchpoint of its operations with customers, business partners and employees, together with its social empowering to get everyone back up stronger together with an initiative called SAVE LIVES, PROTECT PEOPLE where the company set out on a number of field missions to hand assistance to probably neglected groups, or its NEIGHBOR SERVICE initiative which provides a new format for people to generate income as the only marketplace in Thailand to be a hub for selling and buying goods in the form of ‘special talent’ giving Thai people of any lifestyle, not limited to AP customers, a free access.
AP THAILAND BREAKTHROUGH 2022, Jumping Forward to Break through Every Limit to Make Superior Difference for Next Normal Life
Mr. Vittakarn Chandavimol, Chief Corporate Strategy and Creation, AP, said that the company has decided to make 2022 its breakthrough year in which it will jump forward to break through every limit in order to make a superior difference for new normal life by building on a success from AP’s single detached homes. The company has a big surprise in store for the category as well as a new initiative for townhomes. Its condominium portfolio will get boosted up also together with a design innovation that will lead to sustainable growth in the face of a new world challenge. Also this year, AP will offer multiple low-rise products in Bangkok’s environs such as Samut Prakan, Samut Sakhon, Nonthaburi and Pathum Thani in response to a broader target group.
2022 will be the year AP has plans to launch the largest number of new projects in the industry. AP currently has plans to launch a total of 65 projects worth Bht 78,000 million. This is the largest number of new projects planned for a year since its inception. They will include 29 townhome projects worth Bht 25,200 million, 26 single detached home projects worth Bht 35,600 million, 5 condominium projects worth Bht 13,000 million and 5 projects in the provinces worth Bht 4,200 million. As a result, this year AP will have as many as 182 projects worth Bht 149,000 million available for sale both in Bangkok and the provinces. Presales for the year are projected at Bht 50,000 million and total revenues, including those from 100% JV at Bht 47,000 million.
“For new projects this many to be launched, it is almost impossible without the company’s good support system. Throughout the two years that we have faced the crisis, the potential of Team AP has been well proven. It has been the result of our internal corporate structure being made to quickly respond to change. The main key is giving the person in charge of a particular change the power to make a decision. And this year we are ready to take another step over the limit as we have plans to launch many times more projects than in the previous years. In addition to replacing a large number of sold-out projects, these new developments will give us more advantages as we will have our products available to new markets,” said Mr. Vittakarn.
One highlight of interest this year is a shift in the whole approach to AP’s urban townhome development in order to maintain the company’s dominant leadership in the townhome sector under a concept designed to “unlock urban life with AP townhome – a vertical life of your choice.” Growth for the sector is projected at 30%.
The Big Surprise to shake the townhome market in every segment will come from 1. The unveiling of 20 new home models from 6 quality townhome brands, all will undergo a complete makeover regarding their architecture and interior spaces in order to unlock traditional townhome living experiences; 2. The grab of bigger share in the 3-story and 2-story duplex market with the company pitching townhomes with a wide frontage of up to 11 meters under the brand Baan Klang Muang The Edition and Grand Pleno; 3. The entry into the 2-story townhome segment in Bangkok’s environs spearheaded by the new PLENO TOWN brand to be on offer at a starting price of Bht 1.89 million.
For Single Detached Home, the company will stick to its plan to rule supreme in the sector. Today, AP has a solid presence in the market and is enjoying stable growth in every segment with the largest market share and number of single detached units sold in the city and surrounding areas (2015-1H 2021) from three quality brands: THE PALAZZO for super luxury mansions, THE CITY for high-end new-design single detached homes and CENTRO for modern single detached homes for family starters in the upper middle segment. Also in this year, AP will build on its expertise by making forays into the environs of Bangkok like Samut Sakhon and Samut Prakan, with the launch of new single detached homes at Bht 3-5 million under a new brand designed to tap into Gen M and Gen Z with new home models.
The company is also looking to return to its glory as the leader in the urban condominium market with plans to launch 5 new condominium developments worth Bht 13,000 million. ASPIRE will be used as the main fighting brand in the mass segment where it will be positioned as the brand which encourages you to LIVE AS YOU ASPIRE with freedom in every dimension of life and three selling points: Modular Layout – a freely adaptable life space; The Best of ‘ME’ Space – a common area for every person; Entry-Level Price that makes it affordable to everyone at a starting price of only 1.99 million or starting at Bht 84,000/sq.m. on average, in 4 prime locations 1) ASPIRE Pinklao – Arun Amarin ready with its pre-sale scheduled for 19-20 March 2) ASPIRE Ratchayothin 3) ASPIRE Sukhumvit – Rama 4 and 4) ASPIRE Onnut Station as well as LIFE Phahon – Ladprao. The company also has 3 ready-to-move-in condominium developments to meet consumer needs in every segment in 1) RHYTHM Ekkamai Estate 2) LIFE Sathorn Sierra 3) ASPIRE Erawan Prime.
“The condo market has already hit rock bottom. We will see as to how much the sector will grow next year. But we believe that in 2022 we will see some improvement in certain segments like the middle and lower middle. And if the economic activity is back to normal, heavy road traffic as usual, it should be a boon to the condo market. Of course, the lessons we have learned over the last two years of the pandemic, things we have done and learned have all changed. We will continue to face new challenges. The disease will stay with us, which is unavoidable. The first half of 2022 is expected to offer nothing different from this year. But we believe that in the second half of 2022, if everything is as we hope for, if the world can handle the Omicron better, if the medicine really works, then we believe the world economy will be on the up and up,” Mr. Vittakarn added.
The company will continue to execute its business plan with caution and to remain resilient regarding its cash-flow management as it goes on a mission to EMPOWER LIVING by delivering good quality of life to customers on their own terms with valuable and meaningful product and service innovations.
