Major Thai resident property developer Land & Houses PCL said Tuesday it plans to launch 17 new projects this year intended to reap a combined 30.95 billion Thai baht ($942 million), but said profit growth could slow this year and cautioned that demand would be capped while domestic political tensions continue to linger.

The Thai property market performed strongly last year despite the country slipping into its first recession in 11 years, with the top three biggest developers all posting double-digit earnings growth. Sales were aided by government tax breaks for the sector.

The government decided not to extend those incentives when they expire March 28. That could pressure the bottom line for real-estate firms like Land & Houses, which said Tuesday it expects net profit growth of single-digit levels this year. Land & Houses posted a 14% rise in net profit last year to 3.91 billion baht.

"Demand has picked up but it may not be so overwhelming. It will be in line with supply," said Senior Executive Vice-President Naporn Sunthornchitcharoen. Sales for Land & Houses in the current quarter will remain robust before the support measures end, with full-year sales to grow 15%, Mr. Naporn said.

Still, Land & House's plans for this year underscore the opportunity it sees in the market. A recovery in the Thai economy is expected to help sustain growth.

Of the 17 projects to be launched this year, five should go ahead in the first half, with the remainder to follow. Two of the projects were postponed from 2009 after the suspension of $12.1 billion worth of projects at Thailand's Map Ta Phut industrial estate shook confidence, he said. A court stopped development there last year on environmental grounds, a move that has worried foreign investors.

The 30.95 billion baht figure represents the selling price per unit times the number of units to be sold.

Political tensions are expected to continue to further weigh on Thai investment decisions this year, with the festering divide between supporters of the Democrat-led ruling coalition and fugitive former Prime Minister Thaksin Shinawatra unlikely to be narrowed anytime soon.

"We are a bit concerned about what will be going on. We expect that after the first half, things will be more clearer," said Mr. Naporn.

The company said it plans to issue bonds worth around 3 billion baht in the first quarter. The first tranche will be 1 billion baht with maturity of 3.6 years that will carry a coupon of 3.4%. The second tranche of 2 billion baht, three-year bonds will have a coupon of 3%.

The firm has also set a 1.5 billion baht investment budget for two units, with 1.1 billion baht for a capital increase for fledgling consumer bank Land & Houses Retail Bank, which is controlled by Land & Houses and fellow home builder Quality Houses. The remaining funds will be invested in its 60%-owned L&H Property Ltd, a property investment arm of the company. It's now developing a 6 billion baht shopping complex and service apartment project in central Bangkok.

It has also put aside 5 billion baht to 6 billion baht for land purchases, bringing the total investment budget for this year to up to 7.5 billion baht. Last year, the firm spent 4.2 billion baht on land purchase.

Land & Houses has 2 billion baht in debt maturing in July, but the company has yet to decide whether it will seek loans or issue bonds to refinance it.

Senior Executive Vice President Adisorn Thananun-narapool said despite the property rebound, single detached houses and townhouses are unlikely to be oversupplied, although condominium projects are a concern.

However, he said Thailand is unlikely to have a property bubble as political uncertainty will cap growth.

Source: http://online.wsj.com/