AP dives back into provincial projects
Low-rise houses offer more flexibility
KHON KAEN: SET-listed developer AP Thailand has reentered the provincial market with low-rise houses in answer to demand, offering more flexible development.
Vittakarn Chandavimol, chief of corporate strategy and creation, said people in many provinces don’t want to live in urban condo units as the travel time from outer city areas to inner areas is quick.
Similar to Kanchanaphisek Road in Bangkok, major provinces often have a ring road surrounding central areas. Locations on ring roads are usually where low-rise houses are developed as land prices are lower than those in inner cities.
“Condos are preferred in Bangkok because travel from the outer city to inner areas consumes a lot of time,” he said. “In the provinces, people can live in outer city areas where they have a lot of choices at more affordable prices than units in central areas.”
Low-rise house development is more flexible than condos, as there is a wider variety of products, such as single detached houses, semi-detached houses and townhouses.
The unit price range for low-rise houses is also broader than for condo units.
Once developed, a condo project is committed to complete construction and units cannot be changed or adjusted.
On the contrary, development of low-rise houses is more flexible as the company can consider the sales rate and slow down, accelerate or continue with the construction plan.
While contractors for low-rise houses can be changed, those for condos cannot.
Last year AP started re-exploring housing markets in major provinces after stepping back in 2014, finding condo development in provinces was not tenable.
In 2013, it launched three eight-storey condo projects in Udon Thani, Phitsanulok and Pattaya, comprising 413-unit Aspire Udon Thani, 449-unit Coo Phitsanulok and 477-unit Coo South Pattaya.
The sales rates in Udon Thani and Phitsanulok were sluggish, but the projects sold out in the past two years. The Pattaya project was revoked and AP later sold the plot to another developer.
Upon reentering the provincial market, AP will develop only low-rise houses in large-scale projects under the Apitown brand. The five pilot provinces include Khon Kaen, Rayong, Nakhon Si Thammarat, Chiang Rai and Ayutthaya.
Four key factors were considered for each province: major infrastructure projects; urbanisation; purchasing power; and local economic growth in multiple segments such as manufacturing, agriculture and tourism.
“The province should be a hub of something, such as education or medical services,” said Mr Vittakarn.
Khon Kaen, the centre of the northeastern region, has been deemed a smart city with two planned routes for a light rail system being funded and developed by the government and the private sector.
There is also a plan to expand the Khon Kaen airport to double the number of passengers per hour it can facilitate from 1,000 to 2,000, increasing its carrying capacity to 5 million per year after completion in March 2021.
The province’s GDP growth in 2016-18 was higher than the national average at 3.5-4%, while gross provincial product in 2018 was 122,950 baht per person, a regional high.
With a population of 1.8 million, 416,285 people live in Muang district and 63% had an income from a salary or business. Purchasing power was strong and there are two malls and two home furnishing outlets.
Srinagarind Hospital is adding 5,000 beds, funded by an investment of over 24.5 billion baht, and is set to become the largest public hospital in Southeast Asia.
On Nov 21, AP plans to launch three Apitown projects: Khon Kaen with 279 units worth 950 million baht on 45 rai; Rayong with 286 units worth 850 million on 45 rai; and Nakhon Si Thammarat with 215 units worth 650 million on 34 rai. Sales of 100 million baht from each project are expected, with an absorption rate of 25-30 units by the end of the year.