SET-listed developer Pruksa Holding (PSH) is downplaying its housing development business after years of market slowdown, shifting focus to the healthcare business, which is expected to contribute half of its revenue.
Thongma Vijitpongpun, acting group chief executive, said the housing market once peaked at over 500 billion baht per year, but has recently declined to 350 billion baht and is forecast to shrink further to only 200 billion baht within the next 5-6 years.
"The overall housing market has been declining over the past two years, and even if it recovers, the growth rate is unlikely to be significant," he said. "We will maintain this business in line with market conditions."
This year, the company's strategy is to shift focus to non-housing development businesses, particularly healthcare, which it has been investing in for several years.
The healthcare business also has strong growth potential, driven by demand from both domestic and international markets.
In 2025, the company will invest a total of 8.5 billion baht, of which 5 billion baht would be allotted to land acquisition for the housing business, and 3.5 billion baht for the development and construction of new Vimut hospitals in three locations: Thong Lo, Sukhumvit Soi 54 and Pin Klao.
The company aims to generate 2.6 billion baht in revenue from its healthcare business, a 19% increase from last year.
It currently operates 178 beds at Vimut Hospital in the Saphan Kwai area and 80 beds at Vimut-Theptarin Hospital on Rama 4 Road, with plans to expand to 235 and 130 beds, respectively, this year. The company also plans to open a 50-bed senior hospital.
For its housing development business, PSH will launch 22 new projects worth a combined 23.4 billion baht, up from 16 projects worth 18.2 billion baht in 2024 and 13 projects worth 14.2 billion baht in 2023.
The lowest project value it ever launched was in 2022, totalling 11.1 billion baht from 19 projects, while the highest dated back to 2016 with 59.7 billion baht from 69 projects -- the largest in the market at the time.
It aims to generate 18.7 billion baht in revenue from the housing business, reflecting an 8% growth from last year.
At present, the revenue proportion from the housing business and healthcare business is 70% and 30%, respectively, but the company aims for an even split of 50% each in the future.
PSH will also divest land banks worth 1 billion baht that it has no plans to develop.
Some of these assets have high value, including a plot near Victory Monument and another in the Silom area, where it had previously planned to develop condo projects.
Another prospective business includes a logistics centre in Bang Bo, Samut Prakan, where PSH has a joint venture with Singaporean developer CapitaLand.
"Our precast factory will take on projects from other housing developers, and our construction company is also preparing to build homes for self-built home customers," he said.