RGP adopts cost-saving tactics to sell condos for 1.2 million baht
Regent Green Power, a property developer known for inexpensive apartment units, is fighting back against the universal cost of living crisis to make prices more affordable for consumers.
The Bangkok-based property business says it can build condominiums priced at or lower than 1.2 million baht, for about 25-30 square metres, in areas less than 500 metres from mass transportation.
How do they do that?
Regent Green Power managing director, Nirat Yoopakdee, says they have adopted cost-saving tactics to keep the prices down. Low expenses, tight financial management, and internal construction have all led to an increase in the supply of affordable apartments.
“Our land and construction costs are not much different from others, but we save development costs from other methods. We don’t have many sales staff as our sales usually go fast. We can relocate them to new sites quickly as each project is sold out in a short period due to the low prices.”
Due to the rising cost of construction supplies, mainly steel, the company has had to modify some of its expectations and will introduce 10,000 new condos, instead of the planned 15,000, at 2022 prices of less than 1.2 million baht.
The company builds apartment complexes under the Regent Home brand and creates every project from scratch. The money saved will be used to buy new property or reinvest in new projects. The tactic can help save 10% of what would otherwise be paid to contractors.
“Last week we cancelled a land purchase for a new condo project to save 750 million baht in cash flow in case of an unfavourable situation.”
Due to decreased expenses, its sales and administrative costs make up only 8% of overall costs, compared to the average of 15% for other companies.
Customers making significant payments of 15–18% of the unit price, together with high sales rates quickly after launching, or 50–80% sold, also contributed to easing the financial burden.
“We borrow at a minimum amount, mostly around 35% of the project value, while a general condo project borrows at least 50-60%. We cap our debt-to-equity ratio at no more than 0.5 times to reduce financial costs.”
SOURCE: Bangkok Post
