Pruksa sees fivefold jump in sales on India, Vietnam

Pruksa Real Estate Pcl, Thailand’s biggest publicly traded property developer, expects revenue to jump fivefold over the next eight years as the company starts selling homes in countries including India and Vietnam.

Revenue from sales of condominiums and houses will increase to 100 billion baht ($3.1 billion) in 2017 from 19 billion baht last year, Chief Executive Officer Thongma Vijitpongpun said. Overseas projects will provide 40 percent of total revenue by 2017, from less than 5 percent now, he said in an interview.

Pruksa more than doubled annual revenue in the past three years, replacing Land & Houses Plc as the nation’s biggest residential developer as record-low loan costs boosted home sales. The company is building condominiums and houses in India, Vietnam and Maldives, where demand is growing faster than in its home market, Thongma said.

“Pruksa aims to become among the biggest property developers in Asia,” Thongma said yesterday in Bangkok. “To achieve that, the company will have to expand overseas because Thailand has limited growth potential.”

Thongma, 53, owns a 61 percent stake in Pruksa valued at 25.6 billion baht, the largest holding of any individual investor on the Stock Exchange of Thailand, according to data compiled by Bloomberg. The shares climbed 2.6 percent to a record 19.5 baht today in Bangkok.

‘Cautious Approach’

“There’s a risk in entering overseas markets because it lacks the knowledge and familiarity of those countries,” said Chanpen Sirithanarattanakul, head of research at DBS Vickers Securities (Thailand) Co. “Still, its cautious approach with small scale in the initial stage should help minimize risk.”

Pruksa’s revenue rose to a record 19 billion baht last year, from 9.05 billion baht in 2007, as it focused on selling residential properties to middle-income earners. Land & Houses’ sales of luxury homes and other properties fell 6.3 percent to 17.7 billion baht in 2009.

Pruksa’s shares have surged 127 percent in the past year, compared with a 40 percent advance in the benchmark SET Index. Land & Houses, whose president Anant Asavabhokhin has holdings in the company valued at 13.7 billion baht, has gained 20 percent in the same period.

Pruksa this week sold 180 units in a condominium project in the Maldives for a total of 560 million baht, Chief Operating Officer Prasert Taedullayasatit said. The company plans to sell 1,000 units in the country over the next four years, he said.

India, Vietnam Expansion

Pruksa will start construction of a 1.6 billion baht villa- and town-house project in Bangalore, India, this month. It will also introduce a 3 billion baht condominium project in Hai Phong, Vietnam, Prasert said.

“The research indicated huge demand for residential properties among middle-income people in the three countries,” he said. “More projects will come after these pilot projects are successful.”

Pruksa is also studying plans for new projects in Chennai and Mumbai in India and Jakarta in Indonesia.

Sales in 2011 may rise to 30 billion baht because of the new projects, Prasert said.

The company targets Thai customers earning about 35,000 baht a month for its residential projects, he said.

Pruksa plans to start selling 68 new projects in Bangkok and nearby provinces this year, up from 48 announced in May, Prasert said.

“Its target of middle-income earners in Thailand and overseas markets should give the company huge market potential,” DBS’s Chanpen said. “There is vast untapped demand for this market in Thailand and the region.”