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Noble still confident in condos

Noble Development Plc expects to develop three high-rise condominiums in Bangkok’s central business district (CBD) this year, aiming for record-high sales of 17 billion baht despite a slight slowdown in the market, according to president Thongchai Busrapan.

The main revenue driver this year would be the company’s most recent development on Phloen Chit Road, Noble Ploenchit.

“This is our first project developed along the route of the SkyTrain,” said Mr Thongchai.

Despite the glut of high-rise residential units in some areas, the company believes there is still demand in prime locations among younger Thai homebuyers and expatriates.

Mr Thongchai said Noble did not believe there was an oversupply of condos along BTS routes as some industry observers have warned.

The company expects to book sales of 17 billion baht this year compared with 4 billion last year.

However, it expects to realise revenue of just 2.5 billion baht, lower than its forecast late last year of between 3.5 billion and 4 billion baht.

The reduced forecast reflects new accounting rules for listed companies, under which developers cannot book revenue until after units are transferred.

Noble also expects to see its total backlog grow to 6 billion baht over the next three years.

To serve its investment plans next year, the company also plans to raise up to 1.5 billion baht through a bonds issue soon, he added.

Noble Ploenchit, with a value of 14 billion baht and a development cost of 8.8 billion, occupies a nine-rai site and has 1,442 of residential units. Selling prices start from 5.9 million baht a unit or 148,000 baht per square metre. Construction will start in mid-2012 and finish in 2016.

“Our pricing is very competitive for customers either for living or investment,” said Mr Thongchai. “We are one of only a few developers that offer freehold [ownership in the CBD] while most of rivals are leasehold units priced at 130,000 baht per sq m, only slightly cheaper than ours.

“Despite the competitive price, our gross margin is still 37.5% and the net margin 18%.”

Even though the Phloen Chit area has some of the capital’s most expensive land, prices still have potential to climb further over the next few years, driven by the number of luxury commercial and hotel facilities under construction in the area. They include the Central Embassy, a new retail flagship of Central Group, the Park Hyatt Hotel Bangkok and other luxury hotels and office buildings.

This year, Noble will open two more condominium projects along train lines – on Ratchadaphisek Road opposite The Esplanade, and near the Surasak BTS station – from which it projects 3 billion baht in sales.

NOBLE shares closed yesterday on the Stock Exchange of Thailand at 6.65 baht, down five satang, in trade worth 22.78 million baht.

Source: Bangkok Post



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