The condominium developer Origin Property Plc (ORI) listed on the SET in October this year. CEO Peerapong Jaroon-ek discusses the company’s strategy and outlook.
What is Origin’s history and business model?
We founded the company in 2009 with the aim of providing a unique concept of property development to capture the entire range of customer segments. Our business model is aimed at developing clusters of projects that are either near a workplace or near mass transit, thereby targeting real customer demand.
Why was Soi Bearing Origin’s first area for development?
The opportunity that Bearing presented when we began was unparalleled. It is similar to On Nut when the BTS extension first expanded there and the market naturally grew. Bearing is experiencing the same growth but more rapidly. It is connected to Samut Prakan which has the fourth highest provincial GDP in Thailand, behind only Bangkok, Rayong and Chon Buri. Residents have direct access to Suvarnabhumi airport, and they are just 30 minutes away via the Motorway from Amata Nakorn, the largest industrial estate in Chon Buri, or via the expressway to the Bangkok CBD, Din Daeng and Chaeng Watthana. All of these factors together convinced us that Bearing was the best location to begin developing a cluster of 10 residential properties.
What differentiates Origin from its competitors and how do you view the industry developing?
Our key differentiating factor is that we focus on [transit] extension areas and industrial clusters. The locations that we target require strong local knowledge, understanding of the customers, in-depth market research and the ability to acquire land. We also have strong capability in attracting international customers. We were the first to go into budget condominiums, successfully attracting Japanese customers who represent nearly 80% of our international customer base.
As for the industry, our vision is that within the coming decade Bangkok will become a vertical city that will be cosmopolitan similar to Hong Kong and Tokyo, as the consumer trend has already shifted strongly to condominiums.
A decade ago single detached housing represented 65% of all transfers and condominiums were 30%. Now the ratio has switched and we believe that in the next decade condominiums will represent 90% of all transfers. It is this trend that led us to list on the SET to ensure that we have the capital to capture this growth. And that is why we now have 26 projects being planned, constructed or completed.
What projects are Origin planning on launching and how are existing developments progressing?
There are multiple locations that are potentially attractive for us due to the expansion of mass transit. For example, on the Purple Line extension there is an oversupply now but our internal research tells us that the trend will be similar to On Nut: once the Skytrain is running, supply absorption picks up quickly and new demand follows.
We also see Rattahanathibet and Tiwanon Road as attractive locations and expect to be the largest developer in that area next year. As well, we are expanding outside of Bangkok to Si Racha where there is a cluster of industries, especially Japanese firms.
Our first development tin Si Racha, Knightsbridge, is a 2.5-billion-baht project that was 50% presold within three weeks of its launch. With the success of this pilot project we hope to expand to nearby Laem Chabang as it is home to multiple industrial clusters from energy to automotives to electronics. Today we have six projects under construction, seven presale projects that are progressing well and five future projects that total 14 billion baht.
What are the biggest risks facing your business?
When operating in Thailand one has to be able to manage crises. We learned when we began in 2009 in the midst of the global financial crisis, and in this short period of time have already experienced the floods, a political crisis and a softening Thai economy. But we combat this by ensuring we have a value-added product for our clients, by focusing on the right locations and ensuring a high quality of service.
What impact will the Asean Economic Community have on your business?
If Thailand’s political issues are resolved then the country is in a prime position to benefit and capture opportunities from the AEC due to its location. We can see that Thailand will be a destination for companies requiring a base within the region and the country benefits from having an attractive culture for tourism and for retirement prospects as well. As a company we have prepared by attracting foreign clients from Japan and China with our roadshows throughout North Asia.
Where do you see Origin in five years?
We aim to be among the top three condominium developers in the country with a focus on developments around mass transit and clusters of industries. Our portfolio will expand to include recurring income assets as well, and we will continue to provide an international service at a Thai price.
Source: Bangkok Post