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PROPERTY ANALYSIS Raimon Land Targets Thai Buyers

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Posted: 29 Dec 2009 | 6:00 am

Back of a recent interview by Greg Lowe with Thai listed property firm Raimon Land's Chief Executive Hubert Virot in the Bangkok Post the group is looking to shift its primary focus away from foreign buyers and targeting domestic buyers.

While it has closed it's overseas sales operation in Russia, the broader Thai market condo market with buyers in the 28-40 year old range is the strategic goal. Much has been written about the 15 billion 838 unit The River condominium project, which now has hit over 60% in sales.

While it's largest shareholder IFA Hotels and Resorts has provided bridge financing during the restructuring of the company, 40% of overheads have been trimmed with marketing budgets decreased to 4% of turnover versus the previous 11%.

The Middle East IFA group which is Kuwait based bought out the troubled Dubai World affiliate Isthitmar Hotels shareholding in Raimon in Q3 of this year. Another investment from now defunct Lehman Brothers was repurchased during the year.

From a macro picture Raimon is dramatically changing it's business profile and has made signals that it may look to strategic partners for some projects. The group has prime Greenfield development sites such as The Amalfi which is adjacent to Amanpuri in Phuket and Bangkok's 185 on Rajadamri and another in the CBD's Ploenchit area.

Raimon appears to be coming to the reality that many other larger developers who have been hit by cash flow issues with that while the local Bangkok domestic market is recovering that the mass overseas investors are currently missing in action and there are now clear signs of them returning anytime soon.

For market watchers, the question remains is how Raimon will be able to manage the considerable transition to compete with many of the large volume Thai listed property firms. Second is what will the future be for those significant prime land banks of properties currently taking as siesta on the groups balance sheet?

DO YOU LIKE THIS?

no matter what they build in Phuket, the Thai's just will not buy. Can you name one very high scale beach front site that was built for Thai's in Phuket and was successfully sold out? they are better selling their Phuket site and using the dosh to pay out debt.

Bill Barnett responds:
Thanks for the comment, would consider Sri Panwa, Laem Son, Ayara Kamala all good examples of Thai developers with premium land selling high end. In our opinion looking at some of the premier sites here left such as Gasorn's Cape Paradise and a number of other oceanfront pieces controlled by significant Thai developers believe longer term will see more from this sector. In the broarder market most definately there is a shift as developers who are Thai can raise debt, so would be a natural to see some shift from a developing to a developeed market. Appreciate the comments.

Justin Hytch, 28 Dec 2009 | 2:39 pm

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