Who are AP’s target customers today?
The main mission of AP (Thailand) PLC, Thailand’s real estate developer, is to deliver good living quality in all aspects. Our main target customers are urbanites who look for a residential project in the middle-to-high end segment, whether it is condominium, townhome or detached house, particularly in downtown Bangkok. We offer residences at prices ranging from Bht 2.5 million to Bht 80 million.
What type of projects does AP focus developing?
In 2018 the company will continue to work for its major goal of making AP a top 3 company in Thailand’s real estate industry under the main mission to deliver good living quality in every aspect. In doing so, it will keep innovating for Thailand’s real estate sector and has plans to set up a special unit to explore for, discover and develop innovations that promote and improve new living experiences complete with quality, convenience and safety for better living quality truly desired by customers in the long term. The company will achieve business success through five business drivers:
- Building on successful partnership with Mitsubishi Estate. In the fifth year of partnership with Mitsubishi Estate, both companies will continue to develop middle-to high-end condominiums together. This year, we have signed an agreement to invest in four new condominium projects worth around Bht 23,000 million. This March, AP is ready to start selling the first project of the batch, which is LIFE Sukhumvit 62. To date, AP and Mitsubishi Estate Group have 15 condominium projects worth up to Bht 73,000 million in their portfolio.
- Launching super luxury products under consumer-favourite brands. This year’s highlight will be the re-development of AP’s hugely successful super luxury brands that are well received among consumers. These include THE ADDRESS condominium brand and THE PALAZZO luxury mansion brand. The purpose is to satisfy the needs of upmarket customers looking for premium residences in high-potential locations. The timing for the launches is expected to be in the second half of the year.
- Making a difference through mass customized design in low-rise developments. This year, AP Design Lab will not stop making a difference to home design and functionality to better meet specific needs. To date, AP has offered more than 70 house models across its detached house and townhome projects in several locations. In 2018, AP will unveil many new house models in the launches of the 31 low-rise projects worth around Bht 30,000 million. These include 18 townhome projects worth Bht 15,300 million and 13 detached house projects worth Bht 14,700 million. The main goal is to make AP’s detached houses and townhomes the ultimate choice for urban family.
- Managing international portfolio. Bangkok Citismart Co., Ltd (BC) in the AP Group is charged with the mission. As a real estate agency with businesses to buy and sell on behalf of customers, BC has been officially appointed to manage sales of AP’s condominiums in overseas markets. This followed the firm’s outstanding performance as a leading real estate broker with Bht 10,000 million in real estate sales.
- Developing digital innovation for good quality of life. AP always looks to offer good living quality through the integration of technology into the functional space design process. Last year, AP worked together with its partners to offer several innovations that make living convenient e.g. AP Smart Pod, an intelligent locker system which allows condominium residents to receive deliveries by themselves 24/7 as more and more people turn to buying goods online or the introduction of Internet of Things technology to keep all living areas connected. In 2018, AP plans to set up a special unit to explore for, discover and develop innovations that promote and improve new living experiences complete with quality, convenience and safety for better living quality truly desired by customers in the long term.
How does the JV work with Mitsubishi Estate Corporation? Are there plans to develop further projects together?
AP (Thailand) has further strengthened its collaboration with Mitsubishi Estate Group for the fifth year. In early 2018, AP Thailand and Mitsubishi Estate Group have plans to continually develop condominium projects in the middle-to-high-end segment. Earlier this year, a contract was signed for both parties to develop four projects worth Bht 23,000 million.
Would AP look to develop recurring income assets?
Most of AP’s projects have recorded strong sales and have shown brighter sales prospects. Last year, we had Bht 42,900 million in total presales, which exceeded our projected presales of Bht 26,000 million for 2017. This was a growth of 92% on 2016. This year, our presales are projected at Bht 33,500 million. Our total revenue turnover for 2018 is projected at Bht 28,100 million.
What is your viewpoint on the residential market in Bangkok?
The overall real estate market in 2018 is likely to grow in accordance with the country’s economic growth forecasts. We have seen some improvement in marketing activities and consumers’ buying decisions since late last year up to early this year. Competition is still there from around ten major developers listed on the Stock Exchange of Thailand. They control around 80% share of the market. Developers need to adapt their strategies to fast-changing economic conditions and consumer behavior which has become more segmented. We are optimistic about the prospects for condominiums in the middle-to-high-end segment because there are not many of the supplies left in the market and the majority of the condominiums in the inventory were already sold last year.
How do you see the residential market developing in Bangkok?
We see an uptrend in Thailand’s real estate industry in terms of sales, demand and supply as evidenced by our existing customers buying their second home or buying for investment as well as change in the taste for residences. People are paying more attention to the image of the condominiums they live in in terms of design and quality as well as location – they prefer to live in the heart of the city which is fast and convenient to travel.
For AP, we have an ultra-luxury condominium project named VITTORIO which is located in city centre zone on Sukhumvit Road right in the middle of The EM District. We have seen continued increase in demand and sales for residential projects in the location. VITTORIO is AP’s first condominium at the ultra-luxury level. Not only does we pay attention to location, conduction design, space layout and space functionality, but we also take into account maximum privacy for residents. Priceless art pieces are used to decorate the interior of the project which has a strict security system.
What impact does the expansion of the mass transit lines have upon your business and industry?
Due to increased investment by the public sector and the BTS development as well as the extension of many mass transit lines around Bangkok, more Thai people are moving away from Bangkok’s urban areas. As a result, we have seen an increase in demand for residences in the outskirts of Bangkok. Inbound travel is more convenient with BTS and MRT allowing people to reach downtown Bangkok in just a few minutes. These factors have contributed to growing demand for residences in Bangkok’s suburbs. So, we expect the real estate industry this year to have a good growth in line with the overall national development.
What differentiates AP from its competitors?
With our readiness in quality team, quality residential product portfolio and quality partners who share the same passion to create quality residential innovations, we believe that AP Thailand can make a difference and win consumer’s trust, and we will continue to be a top 3 real estate company in Thailand that offers residential innovation and technology of the future through continued research and development efforts to keep abreast with the future world as we strive to efficiently grow Thailand’s condominium market.
What are the biggest risks facing your business?
The increase in the prices of land in urban areas has affected pricing and positioning of products in response to the behavior of our main target group. It presents a challenge to many developers. Last year, we saw many companies come up with a strategy to compete in meeting as many needs of consumers as possible. But AP’s main target customers still have high purchasing power. Moreover, our target customers are paying more attention to quality. If the product meets their needs and offers good value for money, they are willing to spend on the property to live in or invest in rental/resale markets.
Where do you see AP in five years from now?
As for AP’s goal for the next five years, the company still wants to be the leader of Thailand’s real estate market with the main mission to deliver good living quality in all aspects. We will continue to develop new design innovations to meeting the needs of residents now and the future and will continue to build sustainable quality infrastructure for Thailand’s real estate industry.
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