Contractor beefs up property development
Landmark Mahachai will sit on 16 rai in Samut Sakhon province and feature a 5,700-square-metre community mall and 101 shophouses with a total value of 1.25 billion baht.
SET-listed contractor EMC Plc has expanded into property development with plans to build eight condo projects worth a combined 10.8 billion baht by 2019.
The profit margin in property development is as high as 10-15%, well above the construction business’s 2%, EMC executive vice-president Setthavat Tangcacharapongse said.
“It will be a double benefit if we develop and build [a property project] on our own,” he said.
EMC expects 70% of 2015 net profit will come from property development and the rest from construction work.
Half the year’s targeted revenue of 2 billion baht will come from property development for the first time since the company’s founding in 1979.
The amount stems from six residential projects in Chon Buri province that EMC took over last year.
The company will launch two low-rise condo projects worth 400 million baht each in the second half of 2015 and plans to develop a high-rise condo project and a low-rise condo project worth a combined 2.4 billion baht next year, all on Sukhumvit Road.
A new addition with recurring income is Landmark Mahachai in Samut Sakhon province. The mixed-use project will sit on 16 rai under a 30-year lease from the State Railway of Thailand.
Landmark Mahachai will comprise 101 shophouses priced at 8.5 million baht each for a 30-year leasehold and a community mall with a lettable area of 5,700 square metres and rental rates of 600 baht per sq m per month. EMC expects to close sales of shophouses this year and break even in two years.
The project will open for business in early 2017 and reap annual rental revenue of 36 million baht at full occupancy.
EMC shares closed yesterday on the SET at 79 satang, unchanged, in trade worth 6.87 million baht.
Source: http://www.bangkokpost.com/business/news/597900/emc-to-build-condos-mixed-use-mall-project
