Property developer Raimon Land PLC has announced plans for the launch of a new condominium brand targeted at young professionals. The first project under the new brand will be launched in Pattaya before the end of 2011. A second project under the new brand is planned for Bangkok next year.
The company said it will launch the new ‘hip’ condominium brand towards the end of this year. The intention will be to develop a number of projects under the new brand at multiple locations. The brand will embody all of Raimon Land’s traditional unique selling points including signature design, international specification standards, personalized finishings, best practice construction, ring-fenced financing and 24/7 after sales service.
(From left-right): Raimon Land Chief Executive Officer Hubert Viriot, Chief Operations Officer Kitti Tungsriwong and Deputy VP of Research and Development, Simon Derville talk at a press conference to discuss the company’s new projects and latest sales performance and financial results.
It will be differentiated, however, by a smarter and more compact product with a ‘hip’ aesthetic aimed at a younger customer base looking for quality, style and convenience at affordable prices.
Hubert Viriot, Chief Executive of Raimon Land, commented, “This new brand is part of our diversification strategy and objective to increase our reach in the booming Thai real estate market. The exceptional Raimon Land standards are well known among top-end real estate investors. With this new brand we aim to bring the essential Raimon Land DNA experience to a broader group of customers. Quality, service and investment security are not limited to the happy few anymore.”
The first project under the new brand will be a Bt 2.8 billion project in Pattaya to be launched in the fourth quarter of 2011, with completion and transfers by the end of 2014. The project will use the company’s existing seven Rai of freehold land at Pratamnuk Road in South Pattaya. Target buyers will include weekend home buyers working in Bangkok, holiday home buyers staying in Pattaya for one to three months per year – and Pattaya residents.
The company has also announced that it is in preliminary negotiations to secure land for a new high rise condominium project in Bangkok. The project, which will also be launched under the new brand, will be in the Bangkok central business district, with good BTS access. The size of the project has not yet been finalized, but will be between Bt 2 to 4 billion.
Mr. Viriot said, “Since completing the rationalization programme and reorganization at Raimon Land in 2010, we have embarked on a new strategy of growth and diversification. We plan on maintaining a rhythm of one or two new launches per year in Bangkok and Pattaya under several brands each targeting specific market segments. As a result, the company will expand its overall market share and be more resilient to market fluctuations. Pattaya is the ideal platform to launch our new hip brand.”
In addition to its expansion plans, Raimon Land has also released sales performance, backlog status and financial results for the first half of 2011.
Total secured sales backlog at the end of June 2011 reached Bt 15.2 billion, of which around two-thirds related to sales at The River project in Bangkok. The total sales value of all the company’s current four projects is around Bt 32.3 billion, of which only Bt 3.4 billion has so far been recognized as sales in the company’s financial statements, and of which only Bt 8.9 billion has so far been received in cash.
Transfers at The River project (100%-owned) are scheduled for next year. Sales to date at The River represent approximately 74% of the project’s saleable area. The company reported solid sales progress at the 185 Rajadamri project (also in Bangkok) over the last quarter, with over 42% now contracted.
In Pattaya, strong sales growth was also reported at the new Zire Wongamat project, with over 37% sold at the end of June. The Northpoint project, now 100% constructed, reported 76% of saleable area contracted at the end of the first half.
An artist’s render shows Raimon Land’s Zire Wongamat project in Pattaya.
Under new accounting rules, the company is limited to reporting sales only on transfers, even if a project is under construction with cash installments being received from customers on non-transferred units. Under the new rules, Raimon Land could only register sales on transfers at Northpoint and The Heights during the first half of 2011, totaling Bt 631 million. As a consequence, the company’s EBITDA and Net Profit were both slightly negative for the first six months of 2011 versus positive results of Bt 91 million and Bt 53 million respectively for the same period last year.
The company’s total net interest-bearing debt (‘Net Debt’) at the end of June 2011 stood at Bt 5 billion. As a proportion of the company’s market ‘Enterprise Value’, Net Debt has fallen from over 70% in the middle of 2010 to around 56% at the end of June 2011.
Hubert Viriot made the following comments on the company’s financial results:
“Inevitably the new accounting rules make our revenues and profit figures look weak. But the underlying fundamentals are strong with over 15 billion baht, or over half-a-billion dollar’s worth, of sales backlog. In cash terms we have secured contracts worth nearly 10 billion baht due for collection over the next few years. With a further 13.6 billion of future sales potential on existing projects and plans for new launches underway, we are confident of very significant and sustainable growth in cash-flows going forward”.
