Land & Houses Plc predicted that competition in the housing market in 2002 would not intensify as demand continued to grow steadily while supply of brand-new houses is limited. The company will this year focus on lowering its debt to equity ratio to 0.5:1 and issue more bonds. The two-billion-baht budget has been set aside to acquire new land plots and invest more in a property fund.

Mr Anant Asavabhokhin, President of Land & Houses Public Company Limited, said about the property outlook in 2002 that demand would continue to improve in many sectors from detached houses, townhouses to city condominiums and this would encourage active marketing activities and new project launches. Moreover, the unsold inventory at ongoing development projects is running out including low-cost condominiums, which have been reduced dramatically and are expected to absorb by the end of 2002. Last year, many listed and non-listed developers reported more bookings than what they could build and deliver to buyers. Pre-sales in both private and public sectors expanded between 20-50%, resulting to a big jump in project construction works in 2002.

The new housing registration in Greater Bangkok last year rose 7%. When looking into monthly figures, it found that supply was insufficient to meet increased demand, so that the registration of units built by developers comprising detached houses, townhouses, and condominiums were volatile every month. When new supply was completed, the registration saw a significant rise in that month. On the other hands, when new units were not finished construction as scheduled, the registrations fell down automatically.

In conclusion, the registration of housing units in 2002 came mainly from pre-sales and bookings made in 2001.

As well, competition in the residential market in 2002 will not be serious because most of pre-sales made in 2001 were from only projects that have been under construction and just finalized debt restructuring with creditors. Growing demand in 2002, spurred by government-stimulus measures and low interest rates, is still lower than new supply. When the current stocks from existing projects are finished, newly launched units will be slowly put on the marketplace because developers are still reluctant to obtain credits from banks to finance new developments. Financial institutions are very strict when screening and approving loans for property projects. Furthermore, the Land Development Act is very tough, making developers to have higher financial and operation costs to comply with law requirements. It is likely that the housing market in 2002 will not seen any balance of supply and demand.

On the consumer side, there have been significant changes after the economic crisis. Consumers will study and gather information about developers, especially financial status, and they will buy a house when it is fully or almost completed.

This set a new trend in the housing market and developers should change their business strategies to construct pre-built houses to assure potential homebuyers. Projects with poor quality houses and infrastructures as well as after-sales services are expected to no longer get trust from consumers.

Mr Adisorn Thananun-narapool, Director and Senior Executive Vice President, said about the financial and investment plan in 2002 that L&H would reduce more debt burdens by repaying debts before schedule. Its debt to equity ratio is projected to lower to 0.5: 1 by the end of 2002 from 0.8:1 currently. However, the company will try to decrease financial costs by issuing new bonds to raise funds from the capital market to repay debts with higher interest costs.

This year, L&H set aside two billion baht as an investment budget. Of the total, 1.5 billion baht will be used to buy raw land for future projects and the rest of 500 million baht will be injected in a property fund in which the company co-invests with Government of Singapore Investment Corp (GIC). The budget will come from its operation cash flow.

The internal system development, implemented for years, will continue with a focus on computer and the Internet to help enhance the management and marketing efficiency. L&H targets to become a paperless organization in 2002.

Mr Naporn Sunthornchitcharoen, Director and Senior Executive Vice President, said that the company last year delivered a total of 1,900 detached houses to homebuyers, of which 80% were pre-built units. It held a 30% market share in the detached house sector in Greater Bangkok. L&H projects to grow its sales by 20% in 2002. The company now has 29 projects under construction, of which 23 are in Bangkok and six in provinces. This year, it plans to develop five new housing projects worth seven billion baht. The five are scheduled to launch sales activities by the middle of 2002 including in Rangsit Klong 2, Change Wattana, Raminthra, Rama II and Prachachuen.

The corporate policy is to concentrate on pre-built house construction and it is planned to deliver at least 2,200 houses to buyers in 2002. Key factors to pre-built houses are the company's cost management efficiency and quality control. To support the system, L&H will prepare its system as following;

1. To increase efficiency of marketing research: The objective is to study behavior of homebuyers from requirements, lifestyles, house designs, to functions, and bring all information to analyze housing demand. By this way, the company will obtain right information to design houses and develop each housing estate.
2. To continuously develop the customer base: The database of real homebuyers will be supported future development projects.
3. To develop the integrated construction system: This will raise the efficiency of construction activities and construction management in a bid to deliver quality houses to buyers. The network of all divisions will be connected under the on-line Project Management System from engineering, architecture, finance, internal compliance, to contractors and material suppliers.
4. To develop an easier loan approval system for buyers: Buyers can check their purchasing power through a pre-approval of loan. This will help them transfer home ownership within 14 days after booking