SET-listed developer Raimon Land Plc (RML) plans to launch two high-end residential projects worth a combined 10.6 billion baht in the Sathon area in the next six months, citing the higher margin generated by the upper-end segment.
Chief executive Johnson Tan said the company would position itself to develop residential projects that have a high margin, which would be in the upper-end segment, as proven by its existing 185 Rajadamri project.
The luxury project on Ratchadamri Road now generates a gross margin of 45% after Mr Tan after the new management team reviewed the market and revised up the selling prices two years ago.
The project value of 185 Rajadamri recently hit 10.2 billion baht, up from 9.75 billion baht in 2012.
"After the new management and new major shareholders joined RML two years ago, we built up the company from being seen in a negative light to a positive view. We made project transfers happen and continued construction," he said.
One of the projects slated for next year will be a high-end condominium worth over 10 billion baht on a plot on Sathon Road, where RML is negotiating land prices, likely to be finalised next year. It did not disclose where that plot was.
The other project will be a semi-detached house project worth 600 million baht on a 1.7-rai plot on Soi Yen Akat 2 where it will develop nine units priced from 65 million baht on a plot sized from 70 square wah, to be launched early next year.
"The residential supply in the downtown area is constrained by rising land prices, construction costs and scarcity of suitable land plots, especially for luxury projects," said Mr Tan.
The take-up rate for luxury condos is about 77% prior to completion, according to property consultant CBRE Thailand. The supply of luxury and super luxury-grade condos accounts for less than 20% of the total supply downtown.