The ratings reflect the company’s leading position in the residential property development market, strong brand position in several product types, reliable stream of income from rental assets, and a moderate level of financial leverage.

The ratings also take into consideration the financial flexibility LH derives from its portfolio of recurring income assets and marketable securities, the cyclicality and competitive environment in the residential property development business, and concern over the high level of Thailand’s household debt which impacts the affordability of homebuyers, especially in the middle- to low-income segments.

Bang Sue had great economic, transport and education potential along with a rising population from newcomers.

A radius of 5-6km has a population of over 606,000 with an approximate Bt70,000 monthly income per household, Napat claimed.

“The district of Bang Sue is a strategic location for commerce and business in northern Bangkok, surrounded by 14 government agencies, the new parliament building where people contact with many government agencies each day, over 10 major office buildings, each with tens of thousands of employees who are high-spending shoppers, 23 prestigious schools and universities, five large hospitals, and 30,000 homes in 18 housing projects by leading real estate companies.

“The development of Bang Sue central high-speed railway station will further render the real estate more attractive and easier to promote. It is also ideal for a shopping centre,” said Napat.

The company was given the award for achieving the highest corporate brand value in the Thai property sector, valued at Bt161.6 billion.

The award is jointly organized by the Faculty of Commerce and Accountancy at Chulalongkorn University, the Stock Exchange of Thailand and Manager Media in recognition of Thai organizations that have achieved outstanding corporate brand value in every industry.

Professor Dr. Bundhit Eua-arporn, President of Chulalongkorn University, presented the award to Dr. Nattakit Tangpoonsinthana, executive vice president of CPN at the award ceremony at Sukree Kaewcharoen Convention Hall, the Stock Exchange of Thailand.

The company topped the lists of Best Developer, Best Condo Development Thailand, Best Ultra Luxury Condo Development and Best Condo Interior Design for its VITTORIO ultra-luxe condominium project. It also led in the categories of Corporate Social Responsibility, Sustainable Development, and Design & Construction.

Chief executive officer Anuphong Assavabhokhin said, despite the awards, the company would continue to improve on its performance to better meet homebuyers’ demands, amid fierce competition in the market from existing players and newcomers.

For this year, the company has revised its launch target to 38 residential projects worth a total of Bt59.58 billion, from 43 projects with Bt64.75 billion in market value. The 38 projects include five condominiums and 33 single-detached house and townhouse developments. Three of the condominium projects have been launched to the market in the first half, with the other two scheduled for the final quarter of the year.

Of the 33 single-detached house and townhouse projects, 17 were launched in the first half of the year, to be followed by the rest later in the year.

The company has set a total revenue target of Bt28.13 billion for 2018.

Anuphong said local buyers accounted for up to 80 per cent of the company’s customers with foreigners – mainly from China, Hong Kong, Japan, and Taiwan – making up the balance.

“The proportion of our overseas customers has risen from less than 5 per cent to 20 per cent, thanks to our Japanese partner and the rising demand from foreign buyers – especially from China,” he said.

“I work together with Stanford University and am learning how to do business in the new-economy environment where digital and big data have the influence to drive business at this time,” he said.

The company made big changes in its organisation in 2016 to 2017, after a slide in its total revenues.

“My question at that time was how to drive sustainable business growth, how to organise the business. I read a book and got coaching from Dr Terry Warner, who founded Arbinger Institute in the USA,” said Anuphong.

“This changed my mindset to doing business from the inside to outside. This is the way we changed our business organisation and had success driving business growth from 2017 till 2018, with our total revenue recorded at over Bt20 billion in 2017.”

In 2014, AP (Thailand) Plc posted record-high total revenues of Bt23.2 billion, with Bt2.6 billion in net profit, before dropping in 2015 and 2016 to Bt22.39 billion and Bt20.81 billion respectively.

This forced the company management to seek a way to maintain business growth, including reorganising to find efficiencies along with driving sustainable growth over the long term.

Anuphong thought a lot at the time about what he should do until he took coaching from Dr Terry Warner, who is now 84 years old. Warner’s approach is to think from the inside to the outside, turning on its head the traditional business approach in which the CEO is expected to solve a firm’s problems. Warner’s approach is to give senior staff a lot of independence in exchange for taking responsibility for the business under their cover.

The company also changed the way it set up key performance indicators or KPIs, shifting from a yearly growth target to three-year targets for low-rise residences and single detached houses and townhouses, and four-year targets for condominiums.

This takes some of the short-term pressure off staff, while also providing benefits for allowing them to get onboard with the company’s approach for long-term success.

Normally, single detached houses and townhouses take about three years from the project launch until they are sold out. Condominiums take about four years.

But the new management approach of independence with responsibility has stimulated more creativity from staff, including new products designed under the theme of design thinking in collaboration with Stamford University.

Anuphong said that Design Thinking turns to the customers – the inside – to help design the company’s residential products by surveying and learning what customers need when they are making a residential purchase decision. There are many categories of customers – ageing, working, younger, kids, for example – and the company needs to learn what they want in a home.

The designs have to match their lifestyles, as it has to provide a quality of living for its customers.

“After we changed our mindset and the way we do business, I now focus only on the policies, and our key head staff have to operate their own departments and functions such as products design, deciding which land to buy, etc,” he said. “This creates more residential design under the AP umbrella. This is also different from when we make a decision on our own.”

After it changed the way it did business in 2016, the company has gone on to success with total revenues of Bt22.85 billion in 2017 and achieved a record high net profit of Bt3.1 billion for the year. And the company has gone on to record total revenue of Bt12.8 billion, and a net profit of Bt1.9 billion in the first half of this year, up 72.72 per cent from the same period last year.

“Financial results for 2017 is one of the fingers pointing to our move being the right one, along with the staff being happy doing their work and also being empowered and have more energy to drive business growth. These show we have found the best way to drive our business under the concept, “quality of living”, and that’s what we do,” Anuphong said.

Integration of units Under the concept of “quality of living provider”, the company has integrated all its business units for them to function and drive in the right direction to improve growth.

“We have merged all our business units, including the construction firm SQE Construction Co Ltd, property management firm Smart Service Management, and brokerage Bangkok CitiSmart. Together, they will be our tool to drive business growth under the policy of being a ‘quality of living’ provider,” Anuphong said.

For the construction process, the company is also collaborating with and learning from its Japanese partner, Mitsubishi Estate Group, to develop residential projects under the building information modelling or BIM system.

“We started to use artificial intelligence-backed BIM for single-detached houses and townhouses last year, and that success led us to create new designs to match our customers’ demands and the differentiated demands that they have,” he said.

“We then started to apply this system to help build our condominium projects this year.”

Anuphong said that BIM covered all of the company’s business processes, including design and visualisation, scheduling, cost control, energy analysis, and facility management. This enables the company to design smart residential properties at a time when the industry faces high competition in the market.

By following this system, the company can make designs for a range of residential property types, from the mass market to unique designs that address all the different demands of customers. Many homebuyers also required additional space to accommodate up to three generations under one roof, he added.

Meanwhile, the company also uses digital and artificial intelligence or AI to support its business design and gather information on homebuyers’ needs.

“We use big data and digital application to serve our customer demand,” said Anuphong. “We’ve learned how to use digital at a time when digital is disrupting all industries, but we have to change the disruption so we can utilise it to serve our purposes. We learn what our customers want and learn to select to use innovations to serve our customers. New technology is born every day; we have to select which ones match our business, rather than catching up with all.”

Under his business model, says Anuphong, AP (Thailand) Plc must be a property firm that provides quality of living for their customers during this period of changes.

“We cannot say what will happen in the country’s property sector in five or 10 years from now, but we can say that we are one of the quality property firms that provide quality of living for our customers.”

The Asia Pacific region is the largest retail market in the world, accounting for 39 per cent of the global total, followed by North America with 24 per cent. Up to now, the retail market has been dominated by major global brands from Europe and the US, but in recent years Asia Pacific brands have been growing. Japanese and Korean brands are leading the expansion, accounting for 34 per cent and 18 per cent of the new retail entrants between 2014-2017 in the Asia Pacific market. Successful expansion has mainly been driven by strong brand identity and prime location as well as by leveraging local market expertise.

According to CBRE’s “Rise of APAC Retailers 2018” report, more than half of Asia Pacific retailers are home-grown or independent retailers with operations in one or two Asia Pacific markets. Mid-range fashion and beauty brands are the top two categories leading the expansion activity. Muji was one of the first-movers and opened their first overseas store in London during the 1990s. Today, Muji has over 426 shops in 18 countries with 85 per cent of its stores in the Asia Pacific region. We have seen visible growth of home-grown brands expanding overseas since the early 21st century but the growth has been relatively slow.

Many of CBRE’s regional advisory and transaction services (retail teams) are working with Asia Pacific tenants in opening stores in new markets by advising them on local market conditions, choosing the best locations and negotiating with landlords to achieve the best leasing terms.

Uniqlo, the largest Japanese apparel brand, has been focusing on their overseas expansion strategy as a key driver for their growth. Uniqlo now operates over 2,000 stores in 19 countries with more stores overseas than in Japan, the brand’s country of origin. Uniqlo performs very well overseas, especially in China with 633 stores.

According to its financial statements for Q3 2018, Uniqlo International achieved significant growth in revenue of 23.7 per cent year-over-year, while Uniqlo Japan reported only 6.3 per cent growth in revenue. The company aims to increase the number of its stores in Southeast Asia and Oceania to 400 by 2022.

In Thailand, Fast Retailing Co, the operator of Uniqlo fashion, is planning to open 10 to 15 new stores this year.

The Southeast Asia market is emerging with retailers across Asia expanding rapidly to Vietnam. Thailand’s largest retail conglomerate, the Central Group, is expanding its stores in Vietnam with an additional US$500 million (Bt16 billion) investment.

The Central Group now has 250 stores under Big C, Robins, and Supersports in Vietnam and is aiming to reach 720 stores by 2022.

In Thailand, several local brands are establishing a global presence. Minor international, owner of one of the largest lifestyle retail brands, The Pizza Company, is committed to continuing to expand all of its own brands overseas and now operates over 2,000 restaurants and 400 retail trading outlets in 40 countries.

Earlier this year, several Thai brands expanded overseas. Panpuri, an established wellness brand with over 40 stores in Thailand, opened a flagship store in Ginza, Tokyo’s famous business and shopping district. Greyhound Cafe, a successful Thai restaurant chain with branches in Hong Kong, China, Malaysia, Indonesia and Singapore, also opened their first European outlet in London.

More Asian retailers are outgrowing their domestic markets and the only way for them to expand is to go overseas which, in many cases, is more challenging due to the different consumer behaviour, laws, taxes and property leasing conditions in their home markets.

Note: writer by  Aliwassa Pathnadabutr, Managing Director of CBRE Thailand

 NHA has a policy to team up with property companies in developing residential projects in the lower income market. The move provides an opportunity for lower income people to own their residences , NHA’s director general Tachaphol Kanjanakul said yesterday.

In the first half of the year, the Company recorded total revenue of Bt1.45 billion, including a backlog worth around Bt800 million that is recognised as revenue.

In the first half of the year, the listed company recorded revenue of Bt1.456 billion and its backlog was worth around Bt800 million, which is continuously recognised as revenue, he said.

The company has also developed a business plan to launch seven new projects of its own and two joint-venture projects, the MD added.

The projects to be developed include the Bt954-million Chewathai Residence Thonglor, a 155-unit low-rise condominium in Thonglor 20; the Bt1.7-billion Chewathai Kaset Nawamin, a 480-unit high-rise condominium; the Bt430-million Hallmark Charan, a 159-unit low-rise condominium; and the Hallmark Chokchai 4, an 806-unit low-rise condominium worth Bt2.011 billion.

To be developed under the company’s latest brand, Chewa, are the Bt700-million Chewa Home Wongwaen-Lamlukka, a 275-unit town-home project with an average selling price of Bt2.5 million-Bt3 million,; the Chewa One Bhuddhamonthon Sai 1, a 53-unit detached-housing project worth Bt1.226 billion; and the Bt885-million Chewa Home Suksawat-Pracha Uthit, a 391-unit town-home project with an average selling price of Bt2.1 million-Bt2.49 million.

The other two projects under the business plan – both joint-venture developments – are the Chewa Heart Sukhumvit, a Bt180-million town-home project located in Sukhumvit 62/1, and the Bt270-million Chewa Heart Thonglor, a town-home project located in Sukhumvit 36.

Among them, those who are 70-79 and above 80, will account for 37.2 per cent and 19.1 per cent respectively, making up 56.3 per cent of the total aged population.

According to a survey by the United Nations Population Division in Asean, the proportion of the ageing population will double in two decades, from 7.73 per cent in 2015 to 15.49 per cent in 2035 (equal to the global average).

The two countries with the largest proportion of ageing population are Singapore (31.74 per cent) and Thailand (23.39 per cent), while the two countries with the lowest proportion are Laos (8.38 per cent) and the Philippines (8.72 per cent).

A longer life brings opportunities for older adults and their families as well as for their communities. Commercial businesses can be successful in innovating on these opportunities and achieving business expansion, according to the Asia-Pacific Economic Cooperation (Apec) International Workshop on Adaptation to Population Ageing Issues. But first they need to better understand the market dynamics and spectrum of older adults as consumers and view them more as assets rather than as burdens to society, said the workshop.

The opportunities of longer life are impacted by health and underscore the importance of positive, healthy ageing-related behaviours such as good nutrition and active lifestyles.

Healthy ageing also requires a sustained commitment and actions from national leaders to formulate evidence-based policies, including systematic nutrition screening and intervention, healthcare workforce training, and education to strengthen and support an active ageing population.

In addition, governments should consider engaging commercial businesses to help set sustainable policies that can advance products for older adults.

Finally, governments should set national and local goals to incentivise commercial business development and investment in public-private partnerships to improve the quality of care, promote healthy ageing, and impact outcomes for non-communicable diseases, ultimately benefiting the populations of the Apec countries, the research said.

A commercial perspective on opportunities for business expansion should start with a review of market dynamics including size, growth potential and spending power of senior citizens.

This study presents a brief overview since other presentations during the Apec workshop included targeted details on ageing and economic growth. By 2020, an estimated 13 countries will be “super-aged,” meaning more than 20 per cent of their populations will be 65-year-old or older. Japan already meets this definition today.