Frasers Property says Thai business managed with agility amid challenges

High interest rates, rise in minimum wages among key risk factors for real estate sector

Frasers Property said it is managing its residential business in Thailand with "agility amid a challenging operating environment", in a business update on Aug 7 for the third quarter ended June 30.

The developer noted that the Bank of Thailand had raised its policy rate to 2.5 per cent in September 2023, up from 1.5 per cent at the beginning of that year, with the rate remaining the same since then.

"High interest rates, increase in minimum wages and construction material prices, and stricter assessment of housing loan applications are key risk factors for the real estate sector in 2024," it said.

The developer also pointed out that strategic diversification across housing segments has helped to drive sales in Thailand amid residential market headwinds.

By focusing on cost control, it has successfully reduced average material costs by 10 per cent year on year through efficiency improvements in the materials bidding process. Adjusting construction methods and outsourcing management are the next areas of focus, it added.