Among the big gainers for the first six months were AP (Thailand) Plc, which saw net profit soar 71.55 per cent from the same period of last year to Bt1.9 billion, and Golden Land Property Development Plc, which enjoyed an even bigger surge – 124.18 per cent – in net profit to Bt1.58 billion. Outdoing them, Origin Property Plc posted a 267 per cent spike in net profit to Bt1.5 billion from the same period of last year.

Buoyed by the strong growth in the first half of the year, most of the listed property companies plan to launch more residential projects in the second half of this year. Overall, 225 projects topping Bt355.7 billion are planned by listed and non-listed companies for the period, according to a recent survey by The Nation.

Origin Property Plc’s chief executive officer Peerapong Jaroon-Ek said, after announcing the financial results yesterday, that the company plans to launch three mixed-use projects worth Bt21 billion in the second half.

They are expected to boost its presales to Bt20 billion and see total revenue reach Bt15 billion at the end of this year.

For the first half, Origin Property reported total revenue of Bt6.65 billion and presales of Bt11.5 billion, jumping 224 per cent and 165 per cent, respectively, from the same period of last year.

Golden Land Property Development Plc’s president Thanapol Sirithanachai said recently that the company plans to launch 17 residential projects worth Bt21.3 billion in the final six months of this year to maintain its business growth.

Pruksa Holding Plc is even more ambitious, planning to launch 42 residential projects worth Bt41.5 billion in the second half.

The developer aims to boost its total revenue and its presales to achieve the company’s targets after it reported net profit of just Bt2.42 billion in the first half, eking out a rise of only 0.02 per cent from the same period of last year, deputy group chief executive officer Supattra Paopiamsap said recently.

“We are confident that the property market will continued to grow by up to 5 per cent this year,” she said.

AP (Thailand) plans to launch 35 projects worth a total of Bt54.38 billion in the following months, including 15 single-detached house developments worth Bt18.6 billion and 17 townhouse projects worth Bt15.38 billion.

The other three projects will be condominiums, to be developed by a joint venture company with its Japanese partner Jisho Residence, a subsidiary of Mitsubishi Estate Group, the company’s chief of corporate strategy and creation Vittakarn Chandavimol said recently.

Noelle Coak , the company’s country head for Thailand, Taiwan and Korea said yesterday that the ICON Park in Chiang Mai is a new mixed-use development combining a six-storey hotel, restaurants and retail shops on Maneenopparat Road in central Chiang Mai, a few minutes’ drive away from the famous Nimmanhaemin Road, one of the most popular areas in the city for cafes and restaurants.

This new opening is part of Regus’ commitment to continually expand into locations with easy access to services and amenities, in order to meet the needs of a growing network of flexible workers across the globe.

Chiang Mai is fast-growing as a popular destination for international business events, playing host to nearly 500 MICE functions and 47,000 overseas business travellers in 2012 alone, she said.

Christian Olofsson, shopping centre & mixed-use director of IKEA/Southeast Asia, told The Nation that the competitive environment in the retail industry precipitated the new format of incorporating non-traditional elements into a retail complex.

Development of mixed-use retail properties is growing with the inclusion of residential units, entertainment revenues and healthcare facilities in a single site. Catering to the needs of today’s consumers and staying relevant is the goal of the re-think among major players, Olofsson said.

The new strategy could bring higher return on investment if the developer optimises the opportunity and is able to better meet the needs of modern consumers than are single-use developers.

The concept is less risky as it comes with a greater variety of revenue sources. It can also help average out the land costs by integrating a mix of components with different types of incomes.

Given the positives, IKEA decided to develop a mixed-use project – Mega City – next to Mega Bangna, Olofsson said.

According to a report by the Council of Tall Buildings and Urban Habitat, 451 tall building are listed as under construction globally until 2025, of which a third are mixed-use projects combining hotels, residential units, offices, service apartments and retail outlets.

In Southeast Asia, excluding Thailand, 16 mixed-use projects are currently under construction – eight in Malaysia, five locate in Indonesia, and one each in Singapore, Vietnam and the Philippines.

The Council on Tall Buildings and Urban Habitat is the world’s leading institute on the inception, design, construction and operation of tall buildings and future cities around the globe.

Founded in 1969 and headquartered at Chicago’s historic Monroe Building, the council is a non-profit organisation with its Asia headquarters at Tongji University in Shanghai, a research office at Iuav University in Venice and an academic office at the Illinois Institute of Technology in Chicago.

It facilitates exchanges of the latest technologies for tall buildings through publications, research, events, working groups, web platforms, and an extensive network of international representatives.

James Pitchon, head of Research and Consulting at CBRE Thailand, said it is not possible to develop a single-use project on a large site, citing the likelihood of oversupply in the local market, be it an office or residential project. Developers of large sites need a range of diversified incomes, he added.

Consumers like the convenience of having a range of facilities in one place that are easily accessible in a climate control environment.

Having easy-to-reach retail outlets and a hotel in the same complex appeal to office tenants, especially for the convenience of foreign clients and visitors.

Thais are also open to the idea of staying in a condo next to where they work and play, provided it comes with privacy and exclusivity along with the convenience, Pitchon said.

A JLL research said that the growth of mixed-use projects in Asean (the Association of Southeast Asian Nations) began to take off amid infrastructure development and changes to consumer behaviours in the region.

The association marked its 50th anniversary last year and the region is gearing up for greater growth and investment.

Already powerhouses in the wider region, Southeast Asia’s economies are projected to grow at an annual average of 5 per cent until 2020. The real estate industry stands to benefit as demographics and market size draw further investments, given the manufacturing and logistics advantages.

The upgrade in Asean infrastructure, especially the advancement of high-speed rail networks, will attract development of mixed-use projects connected to the train stations, as is the case in Japan and Hong Kong, the research said.

“We set our sights beyond developing today’s residences as we look to meet the needs of residents in the future,” said Chief of Corporate Strategy and Creation Vittakarn Chandavimol. “The target customers for the urban condominiums we are developing are not the baby boomers, but members of ‘Generation X’, those who are 37-57 years old, born in 1961-1981. They are about to become ‘the young old’.”

He said designing residences for the young old requires a readjustment of the functions of existing residences and differentiation in the products.

Residences and communities of the elderly are often located deep in the provinces and far from urban conveniences.

“So we see an opportunity to offer condominiums that cater specifically to senior people. Our condominiums will feature outstanding design and will be located in the city centre,” Vittakarn said.

To keep up with the growing senior population, AP is ready to take advantage of its strengths in condominium development – location, design and know-how shared by its business partner, Mitsubishi Jisho Residence of the Mitsubishi Estate Group – to expand its portfolio of condominiums catering to the young old who are in a strong financial position.

“Japan has the highest proportion of seniors in Asia and is also among the fastest-ageing nations in the world,” Vittakarn said. “The development of businesses for the elderly is rather complicated. That’s why it is so beneficial for AP to receive great cooperation from Mitsubishi Jisho Residence, which keeps sharing insights on businesses for the elderly.

“By 2020, AP aims to be the industry leader in the development of urban condominiums for the young old – properties where spaces are designed to facilitate the harmonious co-habitation of all generations.”

Amid a shortage of available land in the central business district (CBD) of Bangkok, leading property developers have turned to mixed-use developments combining hotels, offices, retail outlets, parks and luxury residential units to boost revenue and generate sustainable income.

TCC Asset Co Ltd, the property arm of beverage tycoon Charoen Sirivadhanabhakdi, leads the trend with an investment budget of Bt148.5 billion for three mixed-use complexes  One Bangkok, The PARQ and Samyan Mitr Town.

Magnolia Quality Development Corporation Ltd, the real estate unit of Charoen Pokphand Group (CP Group), has mapped up plans for three mixed-use projects  Forestias, Whizdom 101, and Icon Siam, at a total investment of Bt170 billion.

In an portfolio expansion, Singha Estate of the Bhirombhakdi family, has invested in a mixed-use project on Asoke road. The Singha Complex has a market value of Bt4.2 billion.

Meanwhile, The Mall Group is developing Bangkok Mall, another mixed-use property of retail outlets and office space on Bangna-Trat road.

Siam Future Development Co Ltd is teaming up with SF Development Co Ltd and IKANO Retail Asia for the development of Mega City on land in the vicinty of Mega Bangna at a total cost of Bt67 billion. The project will consist of two hotels, residential and office buildings. The location is expected to draw 50,000 people.

Dusit Thani Plc has joined up with the Central Group to redevelop the famed Dusit Thani hotel on Silom road as a mixed-use project of hotel, residential units, retail and office premises.

Other property developers, such as Origin Property Plc, Supalai Plc, Grand Canal Land Plc, LPN Development Plc and Country Group, are also turning to mixed-use properties for higher revenue and sustainability.

A survey by The Nation shows an estimated total investment of Bt649.2 billion in mixed-use projects till 2025, mainly due to land shortage and Bangkokians’ preference of staying close to where they work as well as retail and entertainment venues.

“Rising land prices and volatility in different property sectors are making single-use developments less favourable,” says JLL managing director Suphin Mechuchep.

Faced with the challenges and comฌpetition in the market, developers are increasingly opting for the development of mixed-use projects, both large-scale complexes and single buildings, according to property consultancy JLL.

“In addition to existing mixed-use developments, there are several new projects coming on stream including One Bangkok, The Icon Siam, The Parq, Samyan Mitrtown and Singha Complex,” she added.

A utilisation of space, mixed-use developments bring about land use synergies. Combining multiple facilities within a single project allows the developer to draw on common resources, lowering development cost and maximising land use.

Furthermore, each component within the development complements the others.

Retailers benefit from a steady flow of consumer traffics from condominium residents, with the convenience of shopping right on the doorstep, as well as hotel guests and office workers.

For office tenants, the diverse offerings within a mixed-use development raises the appeal of a company among the staff.

The presence of hotels and residential units within the same development provides an added benefit for office workers and visitors.

These conveniences reflect the goal of mixed-use developments in catering to the modern urban lifestyle.

“Mixed-use developments are not limited to large-scale projects as several single buildings also offer a mix of facilities in a growing trend,” Suphin said.

“In view of the changes in consumer behaviour and rising land prices, we revised the plans for our projects in the Vibhawadi-Jatujak area to mixed-use developments. The two properties Lumpini Tower Vibhawadi-Jatujak and Lumpini Park Vibhawadi-Jatujak are being built at a combined cost of Bt5 billion,” said PLN Development’s chief executive officer and managing director Opas Sripayak.

He said the new business model was a result of surging land price in Bangkok’s business district and areas close to the existing and planned mass transit routes.

He pointed out that if the company purchased a plot for residential development at over Bt1.5 million per square wah, the sales price will have to set at above Bt250,000 per square metre  a level beyond the purchasing power of most housebuyers, in order to make a profit.

To generate higher sales and recurring incomes, the company has departed from single-use residential projects to mixed-use complexes with retail outlets and office space in line with customers’ preference, Opas said.

Siam Commercial Bank’s Economic Intelligence Centre (EIC)said that the trend of mixed-use developments has caught on in most countries, such as the Marina Bay Sands in Singapore.

With numerous developers competing in the Thai market, mixed-use projects will help property firms lessen business risks with recurring rental incomes from hotels, office space and retail outlets.

“Mixed-use projects comes with a new ecosystem through the integration of work, home, and lifestyle in one place. It also create higher market value for the properties,” the research said.

If a project is designed to be the landmark of a location, it will become a new tourist destination in the area. For example, after the opening of the US$5.5-billion Marina Bay Sands in Singapore in 2010, the number of tourists to the island state has grown from an average of four per cent a year to 10 per cent in the year 2010-2013, the centre said.

Prasert Taedullayasatit, honorary president of the Thai Condominium Association, also shared the view that the new business model was caused by changes in consumer behaviour and high land prices, making it difficult for the development of single-use projects.

Faced with the major expansion of leading property players in the market and the digital disruption, companies with limited financial resources are turning their attention to the design of unique residential projects and better aftersales services in order to stay afloat, he said.

The development of a mixed-use project requires long-term funding as the return on investment could take as long as seven years. Currently, most developers lack the financial prowess, said Prasert, who is also Pruksa Real Estate Plc’s chief executive officer for the premium market.

Thus, lesser players will have to turn to smaller residential projects in locations close to the business district, retail outlets and other facilities, he said.

“Although we are not in a position for mixed-use projects, we could still develop residential properties that cater to the lifestyle of our customers as a way to cope with the capital and digital disruptions,” Prasert concluded.

Those wanting to own a home worth up to Bt1 million could apply for mortgage loans in November and December, said Chatchai, with the about 10,000 houses initially available this year.

A mortgage loan package would soon be submitted to the bank’s board and the Cabinet, he said, and around Bt50 billion would be prepared.

Some 100,000 houses will become available this year through 2021, Chatchai pledged, as part of a government project initiated by Deputy Prime Minister Somkid Jatusripitak to provide one million homes for low-income people who can afford to pay no more than Bt4,000 a month in instalments.

“It’s better we get started on this now rather than doing nothing,” Chatchai said when asked when the bank would begin loaning to an estimated one million underprivileged people.

He said low-income people pay rent of Bt3,500 to Bt4,000 a month which would be better spent on repaying a mortgage, in instalments over 40 years. They would thus own their own homes. The bank could provide a Bt1-million mortgage loan with instalments set between Bt3,800 and Bt4,000.

Such potential homeowners typically do not maintain records on their income, he noted, but if they could show the bank proof of paying rent, they could obtain a mortgage loan.

Private-property developers are willing to provide cheap housing units if they’re confident about finding buyers, Chatchai said, so the GHB could also provide them with pre-financing and the buyers with post-financing.

Three major state-owned banks – Krung Thai, the Government Savings Bank and GHB – along with Bangkok Commercial Asset Management, Sukhumvit Asset Management and the Legal Execution Department and other state-owned specialised financial institutions could resell non-performing, asset-dispossessed homes to people in need.

The National Housing Authority and Treasury Department would also participate in the project, Chatchai said.

Cheaper units developed by the private sector would be available across the country and be profitable, he said.

As the second quarter of this year, the company reported total revenue Bt10.93 billion and net profit Bt1.59 billion 12.4 per cent and 10.7 per cent respectively from the same period of last year.

The company also said its presale Bt24.37 billion in the first half of this year or dropped 6.8 per cent from the same period of last year.

Wichian Pattayanunt, the CEO of Chaopraya Mahanakorn Public Company Limited, said: “CMC strives to become a leading integrated property developer.

“We focus on developing unique and high-value projects under condominium brands such as Bangkok Horizon, Bangkok Fe’Litz, Chateau in Town as well as popular high-end housing brands such as Kasa Eureka, Kasa Diva and the Rich.

“With 24 years of success in property development, CMC now focuses on developing projects along various BTS and MRT lines. The company plans to list its shares in the MAI stock exchange in fourth quarter of this year.”

For the past three years, CMC said it has continuously achieved strong business results. The company said it has revenues of Bt1.52 billion in 2017, Bt2.09 billion in 2016 and Bt1.41 billion in 2015. The company reports a high gross profit of Bt634 million in 2017, Bt879 million in 2016 and Bt558 million in 2015 and records a net profit of Bt127 million in 2017, Bt156 million in 2016 and Bt47 million in 2015.

Wichian said the company has 25 condominium projects, with a combined value of Bt3.8 billion, ready for transfer and revenue realisation. In addition, there are three condominium projects under construction with a combined project value of Bt2.8 billion with two due to be completed this year while the other project will be completed early next year.

In addition, CMC has plan to build 10 new projects, worth Bt10 billion within three years.

At present, CMC has registered capital of Bt1 billion, with paid capital of Bt750 million.

The company plans to offer 250 million shares (at Bt1 par value), equalling 25 per cent of total shares to the public and investors in the fourth quarter this year.

CMC plans to use the initial public offering (IPO) proceeds to acquire new land plots and invest in new projects.

The IPO will also strengthen its financial structure which has a debt to equity ratio of two times. In addition, this will increase the working capital, enabling the company to enhance its business and create a good and equal return for all investors.