SC Asset eyes stepped-up foreign sales

A digital rendition of a duplex house at V Compound Ratchaphruek-Pinklao, a 1.17-billion-baht SC project to be launched next month.

SET-listed developer SC Asset Corporation Plc, a property arm owned by the Shinawatra family, looks set to forge a joint venture with a foreign partner on a new condo project by the fourth quarter after seeing growing demand from overseas buyers.

Chief executive Nuttaphong Kunakornwong said the company is in talks with an Asian investor to establish a joint venture firm in the fourth quarter to develop a luxury condo under The Crest brand near CentralPlaza Ladprao.

"After meeting this partner six months ago, we decided to join them as they have something we are looking for," he said. "The source of funds from the partnership is a fundamental factor, but what is more is the foreign customer."

Amid rising demand for Bangkok condos from foreign buyers, SC's foreign customers are currently a minimal portion at just 8% of total condo sales.

Mr Nuttaphong said the joint venture will be launched next year and SC expects condo sales from foreigners to rise to 15% overall by 2020.

By the fourth quarter, SC will also spend 1 billion baht to acquire apartments for rent in the US, either in Boston or on the West Coast, as capital gains and yields are attractive at 20% and 5% respectively.

In the second half, SC will launch 15 new residential projects worth a combined 15 billion baht, comprising 14 sites of low-rise units or single houses, townhouses and duplex houses worth 13.3 billion baht and a condo project worth 1.7 billion baht.

"Single house and duplex house have had big growth this year, particularly in units priced at 8-20 million baht, which saw the largest expansion," Mr Nuttaphong said. "We saw a growing low-rise trend last year and bought land plots to launch them in larger numbers this year."

Some of the new projects will be in two township sites, a 240-rai plot in Bangkadi, Pathum Thani and a 115-rai plot in the Krungthep Kreetha area.

Each plot will see development of at least five residential projects worth a combined 7 billion baht.

The two township sites will be pilot projects in which SC is joined by the Research and Design Service Center (REDEX) at King Mongkut's University of Technology Thonburi to apply big data.

"With big data, we will learn what consumers want," Mr Nuttaphong said. "We will launch a delivery robot by the end of the year to facilitate them at these two township sites."

In the first six months, SC posted 704 million baht in net profit on revenue of 6.65 billion baht, up 107% and 44% year-on-year respectively.

Of total revenue, 94% was from residential sales and 6% from office rent.

Revenue from the low-rise segment rose by 49% to 4.52 billion baht, with units priced at 8-20 million baht a key driver, surging 512%.

Units priced lower than 5 million baht saw 132% growth, while the luxury segment of units priced higher than 20 million baht grew 67%.

SC aims for 17 billion baht in presales and revenue by year-end. At the end of June it had a sales backlog of 10.73 billion baht, of which 45% will be realised in the second half.

SC shares closed Friday on the Stock Exchange of Thailand at 3.60 baht, up four satang, in trade worth 24.7 million baht.