Firms change marketing track

Soaring prices of building materials prompt the sales of projects in phases

Property developers have revised their marketing strategy for city condominiums from open presale for the entire project to selling it phase by phase so that they are able to adjust prices according to rising construction costs.

According to a survey conducted by The Nation, a number of property developers have changed their marketing policy so that they can maintain margins as construction costs soar. Two of these are property companies who plan to launch new city-condominium projects in the second half of the year while others have launched similar projects in the first half.

Thanapat Development, which introduced Thanapat Vibha last year - a project that has already realised 50 per cent of the Bt20-billion project value - has delayed promoting its project in the first half of the year. The company said it is waiting to adjust its sale price from the earlier price of Bt50,000 a square metre, or Bt1.6 million to Bt1.7 million per unit, to Bt60,000 per square metre, or Bt1.8 million to Bt1.9 million per unit.

LPN Development has also adjusted its plan for Lumpini Place Rama IX-Ratchada. Instead of going in for an open sale at one price for the entire project, the company has chosen to sell it phase by phase and adjust its project price 5 per cent after the open presale on June 21 from Bt57,500 per square metre to Bt60,375 a square metre starting June 22.

The company's managing director Opas Sripayak said the company changed its policy due to the rise in construction costs.

"The condominium-construction process takes about two years from the time we launch at one price to the time the project is sold out," he said. "In the interim, we shoulder the huge variance in costs. It is due to this that we have revised our sales process to go phase by phase to be able to factor in the rising construction costs."

S&S Residential, a subsidiary of TCC Capital Land, is also using the same strategy to sell S&S Sukhumvit at Sukhumvit Soi 101/1.

The project is sold 20 per cent of its value of Bt1.8 billion.

The company has adjusted its sales price between 5 per cent and 10 per cent from the starting price of Bt1.3 million per unit.

Supharat Group, which developed a city-condominium project under "The Sense" brand on Sukhumvit Soi 68, has also raised the sale price of the units by 5 to 10 per cent. Ninety per cent of project value of Bt360 million has been sold.

At a glance

-- Developers are abandoning the policy of setting a single price for the entire project.

-- As phases are launched, prices could be raised 5 to 10 per cent compared to previous phases.

-- For example, Thanapat Development will raise prices by Bt10,000 a square metre at the Thanapat Vibha from Bt50,000 when it was launched last year.