Raimon Land Lower Pricing Strategy with Amalfi
Reducing property prices has been tabled as a possible strategy by the Chief Operating Officer of Raimon Land Kitti Tungsriwong according to quotes in the Bangkok media. The company is reportedly revising the master plan of the 43 rai Amalfi luxury project here in Phuket which is valued at THB 500-600 million and now villa pricing points would be well under the anticipated THB 250 million mark for the 15 luxury estate homes.
Lower construction prices are being referenced as the rationale for downward pricing. Raimon's largest shareholder IFA Hotels and Resorts had injected THB 356 million into the company recently on a short term high interest loan at 15%. They are now injecting a further THB 359 million with interest pegged at 10% and a revision to the rate on the initial loan to 10%.
Cash flow remains a significant issue for all of the large Thai listing property firms and with the continued downturn forecasted for a least the rest of 2009, firms are now taking the view that 'cash is king' which may put property prices in the larger markets such as Bangkok at risk. At the end of the day, "you can't take percentages to the bank, only cash" commented an industry analyst.