As the economic downturn puts pressure on property prices, the developer Chewathai Co Ltd plans to take over suspended or partially built condominiums and acquire new land plots for low-rise development with a budget of 200-300 million baht for each project.

Executive director Boon Choon Kiat said the company will focus on business development this year, with a plan to buy three plots of land for development.

"Now is a buyers market as prices are declining and we expect to get 30% lower than the market price," he said. "But after a final negotiation, they should end at 10-20% lower."

For condominium development, the company is interested only in central business locations while Bangkok's northern zone is preferred for low-rise options.

Since early this year, Chewathai has been approached by sellers' brokers, offering three or four plots of land. One of them is a post-1997 unfinished condominium with 24 storeys.

"The broker asks us to reconsider the deal initiated in the middle of last year. It failed then because we could not agree on the price. The location is good as it is in one of our targets," he said.

Mr Boon said the company planned to launch The Surawong, a new condominium worth 350 million baht at a roadshow in Singapore in late March.

The project is a joint venture with United Motor Works (Siam), a subsidiary of the Singaporean firm Hup Soon Global Corp Ltd. It is located on a 240-square-wah plot on Surawong Road, comprising 52 units sized from 40 to 80 square metres and priced at 120,000 baht per sq m on average.

To attract Singaporean buyers during the economic slowdown, the company would offer a buy-back guarantee. Customers can get a full refund of down payment if they book a unit at the roadshow event and change their minds when they visit the project site.

"Legally, Singaporeans must pay 20% of the unit price upfront when purchasing a property, unlike Thais who pay the downpayment in monthly installments. We can use this money as a revolving fund. If we have to buy back, we will gain a higher margin by selling returned units at a new higher price," he added.

The company is confident of achieving 50% sales from the roadshow as Singaporeans are are no strangers to Hup Soon Group and TEE Group, the Singapore construction firm that co-invested in Chewathai. After selling half of the project, it would raise prices by 20%.

The company's current project, the 1.3-billion-baht Chewathai Ratchaprarop, is 45% sold. It plans to start construction next month and complete work by early 2011.

"We are more cautious in choosing contractors. We will consider their cashflow and jobs in hand, as well as their punctuality," he said. Chewathai obtained a project loan of 560 million baht from Siam Commercial Bank.

Despite slowing sales, the company is not worried as it has already reached a break-even point. It will freeze sales after 70% of units are sold until construction is completed so it could raise the prices by 15%.

source : www.bangkokpost.com