Sena Development has decided to shift its focus on low-rise projects in the fourth quarter in an attempt to avoid risk as the company begins to expand its solar energy business. The developer hopes the decision will allow it to raise long-term revenue from non-property related entities.
The property market faces higher competition, particularly in the high-end segment, where purchasing power remains strong, executive director Kessara Thanyalakpark said. The low-end segment of the market has seen sluggish demand due largely to stricter rules on mortgage approval by financial institutions as well as high household debt.
Sena plans to launch three low-rise projects worth THB2 billion in total. The projects are seen as being less of a risk than condominiums. “Our new project launches are in line with the economic situation. We’ve postponed some condo projects to next year,” Kessara added.
Sena will continue its foray in the solar energy field alongside its property interests after entering the market in may. The developer noted that it expects to complete deals with partners in the near future including at least a 40 percent stake in an engineering, procurement and construction company that is an expert in solar rooftops.
“Our profitability this year may decline like that of other developers, as the economic downturn will affect everyone in the industry,” Kessara said. “Having a non-property business will help us to diversify revenue.”
Sena would like to see 85 percent of its revenue from property with 10 percent coming from solar and five percent from rentals and services. At the moment, 90 percent of Sena’s revenue comes from property with the remaining 10 percent from rentals and services.
The developer recorded THB2.6 billion in pre-sales during the first half of 2015. The company’s full-year target is THB4 billion baht even with economic slowdown in Thailand hindering the property market.
