While some developers are excited for 2018, Charn Issara Development Plc is turning its attention to hotel projects next year since its housing sales were not as good as it had hoped for during the first 9 months of 2017, reports local media. The company will also focus on selling remaining units at existing residential projects.
The developer is being cautious when it comes to Thailand’s economy in 2018 and it believes things will be steady or have minimal expansion due to the weak world economy and high Thai household debt. However, Charn Issara does see potential in the country’s tourism sector.
“Debt was higher while income dropped. The country’s economy moved slowly as a decline in agricultural prices affected a majority of people. The only hope is the tourism industry,” says Charn Issara Chief Executive Songkran Issara to the Bangkok Post.
The overall occupancy rates at its Sri Panwa luxury resort in Phuket rose during the first 3 quarters of this year when compared to last year. An increase in Chinese tourism was one of the key drivers of the occupancy growth. Charn Issara wants to find new ways to increase revenue from its hotel holdings next year.
“We aim to increase the hotel revenue proportion from 25% this year to 30-40% in the next 4 years. We also expect to manage 3 hotels in three Chinese cities because they use lower leverage,” says Songkran.
The hotels in China will be located in Hainan, Kunming, and Lijiang. The Hainan hotel is the property furthest along and is in the conceptual design process. The hotel is expected to be opened in 2019 and the company has agreed to manage the property for 15 years.
The developer will still keep an eye on the residential market and has a budget of THB700-800 million to use to buy a land plot in Bangkok. It plans to launch an upscale condo project on this site. However, the company still believes more must be done to improve residential demand in Thailand.
“The Thai property market cannot rely on only domestic demand. Schemes are needed to attract foreigners to buy property, such as a longer visa for a property purchase or an extension on leasehold ownership to over 50 years,” says Songkran.
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