Areeya Property Plc began as a house construction business before expanding into property development in 2002 by acquiring land and building houses under the Areeya name. It became a public company in 2003 and listed on the Stock Exchange of Thailand the following year, trading under the symbol ‘A’. Chairman and chief executive Wisit Laohapoonrungsee discusses the company’s strategy and outlook.
Our customers can buy a unit and simply move in; the units are all fully furnished with TVs, microwaves, furniture — they even include a toothbrush! WISIT LAOHAPOONRUNGSEE CEO, Areeya Property Plc
Please explain Areeya’s business model.
Areeya is a property development company that has been presenting a new idea of living style to the younger generation in Thailand. We feel that we are the leader in design and creativity within the property market in Bangkok. Within our portfolio of properties, we develop single detached houses, townhouses and condominium projects.
What segment of the property market does Areeya operate in?
Our business model is not to focus purely on a specific customer or market segment. Instead we operate based on the potential of a project type depending on the location of the land, the demand and supply in that location, the potential risks and finally, what product type would suit the location. Thus all of our projects have been developed depending on the opportunities when weighed with the risks.
For example, our A-Space condominium projects target the lower-middle income market because the locations and our ensuing design were perfectly targeted at that segment. For our townhouse projects we have several brands (The Colors, The Colors Premium, Areeya Mova, Areeya ToBe, Daily and Mandarina) depending on the number of storeys and location, and the same concept applies to our single detached housing projects. Within our entire portfolio, our prices can range between 1 million and 15 million baht.
Does Areeya have a landbank?
We only built a landbank when we first went public in 2003. Since then our business model has been to look for land and develop a project within 3-4 years.
What projects does Areeya have today?
Today we have 22 projects on hand, which are a combination of single detached houses, townhouses and condominiums. This year, we plan to launch a project worth 15 billion baht on Ratchadamri Road, where we were recently given a 30-year lease on the land where AUA is currently located. This development will be launched toward the end of this year and will be a luxury high-rise, using internationally renowned designers, with 45 floors of residential units. Every room will have a panoramic view and each car spot will have an automatic parking system. This month we will also launch ‘a space’ condominiums in four locations with project values worth 4.5 billion baht. Our townhouse projects will continue as well as demand exists, and finally we will look to develop new single detached house projects because we see an opportunity in certain market segments and locations here in Bangkok.
Who are Areeya’s competitors? What differentiates the company from its competitors?
Because we focus on a project-by-project basis we do compete with almost every developer in the industry, but we differentiate ourselves because we add a lot more on the lifestyle and design components of our projects. Our projects look more modern and we aim never to copy any of our competitors’ designs.
Using our ‘a space’ condominiums as an example, our customers can buy a unit and simply move in; the units are all fully furnished with TVs, microwaves, furniture _ they even include a toothbrush! Also, our cost-efficiency comes from using specific mould technology for the infrastructure which is very accurate, has strong quality, is fast to build and cost-effective.
What impact do government policies have on your industry?
The government incentives affect buyers as they may hasten or delay property purchases, but for developers there isn’t much of an impact as it affects the entire industry. Every developer has the same costs.
What do you feel are the biggest risks facing your business today?
Our main risk is our ability to continue striving to develop projects that buyers desire; every other risk is just part of the business. Property development is a cost-push business and with rising inflation coming from the global economy and Thai government policies such as the minimum wage increase and minimum salary for university graduates, we have to ensure that we are well prepared for higher costs.
How would the Asean Economic Community affect your business?
This will affect us in a positive way with more investments specifically for Southeast Asia. This region has 601 million people. Vietnam is growing, Laos and Cambodia are continuing to develop, and Myanmar is opening up, plus with Thailand’s geographical location, we as a country are well positioned for this.
Where do you see Areeya five years from now?
Our plan is for Areeya to be in the top tier of property developers in Thailand, which means to be in the top four. With our projects launching this year, our equity will increase to 5 billion baht within five years, and from there we will look at expanding to long-term rental income projects as well. Our views are very long-term: we are focused on the group image, the group vision, the group values, the projects we develop, everything in the company.
Source: Bangkok Post