TRIS Rating Co., Ltd. has affirmed the company rating of Quality Houses PLC (QH) at "BBB+" and has affirmed the "BBB" ratings to QH's senior debentures (QH064A, QH074A, QH084A). At the same time, TRIS Rating has also assigned a "BBB" rating to QH's proposed up to Bt1,000 million senior debentures. The ratings reflect QH's long track record in the property market, its strong brand name in the middle- to high-income housing market and recurring income from its serviced apartments and office buildings. These strengths are partly offset by the company's highly-leveraged balance sheet and the cyclical nature of the property development market. Increasing industry risks result from the rising trend of interest rates and construction material costs are rating concerns.
The "stable" outlook reflects QH's ability to maintain its financial position and recurring income from its serviced apartments and office buildings. Revenue contribution from its single detached houses (SDHs) is expected to increase from the new projects launched during the second half of 2004.
TRIS Rating reported that QH is one of the largest property developers in Thailand. It was established in 1983 by Land & Houses PLC (LH). As of March 2004, its major shareholders were the LH Group (26%), the Government of Singapore Investment Corporation Pte. Ltd. (12%) and the Thailand Prosperity Fund (11%). For the first six months of 2004, housing sales accounted for 85% of QH's total sales with the remainder derived from its serviced apartments (11%) and from office for rent (4%). While the overall housing market in 2004 has been less favorable than last year, QH's luxury housing sales totaled Bt2,304 million for the fist six months of 2004, a slight increase from the same period last year. Recurring income from serviced apartments and office rentals increased by 44% due to the opening of its new apartments in early 2004. This recurring income provides the company with a more regular source of income that is less affected by housing industry cycles.
TRIS Rating said that competition in the housing market in 2004-2005 is expected to intensify as supply has increased while demand growth is expected to be lower than last year. The trend of increasing construction material prices, together with rising interest rates, will put more pressure on developers' margins. The Bank of Thailand's regulations to control the down payment for high-market housing and stricter reporting requirements for pre-financing loans may reduce speculation in the residential market. -- End
Quality Houses PLC (QH) Company Rating: Affirmed at BBB+ Issue Ratings: QH064A: Bt584 million senior debentures due 2006 Affirmed at BBB QH074A: Bt917 million senior debentures due 2007 Affirmed at BBB QH084A: Bt499 million senior debentures due 2008 Affirmed at BBB Up to Bt1,000 million senior debentures due 2009 BBB Rating Outlook: Stable
The "stable" outlook reflects QH's ability to maintain its financial position and recurring income from its serviced apartments and office buildings. Revenue contribution from its single detached houses (SDHs) is expected to increase from the new projects launched during the second half of 2004.
TRIS Rating reported that QH is one of the largest property developers in Thailand. It was established in 1983 by Land & Houses PLC (LH). As of March 2004, its major shareholders were the LH Group (26%), the Government of Singapore Investment Corporation Pte. Ltd. (12%) and the Thailand Prosperity Fund (11%). For the first six months of 2004, housing sales accounted for 85% of QH's total sales with the remainder derived from its serviced apartments (11%) and from office for rent (4%). While the overall housing market in 2004 has been less favorable than last year, QH's luxury housing sales totaled Bt2,304 million for the fist six months of 2004, a slight increase from the same period last year. Recurring income from serviced apartments and office rentals increased by 44% due to the opening of its new apartments in early 2004. This recurring income provides the company with a more regular source of income that is less affected by housing industry cycles.
TRIS Rating said that competition in the housing market in 2004-2005 is expected to intensify as supply has increased while demand growth is expected to be lower than last year. The trend of increasing construction material prices, together with rising interest rates, will put more pressure on developers' margins. The Bank of Thailand's regulations to control the down payment for high-market housing and stricter reporting requirements for pre-financing loans may reduce speculation in the residential market. -- End
Quality Houses PLC (QH) Company Rating: Affirmed at BBB+ Issue Ratings: QH064A: Bt584 million senior debentures due 2006 Affirmed at BBB QH074A: Bt917 million senior debentures due 2007 Affirmed at BBB QH084A: Bt499 million senior debentures due 2008 Affirmed at BBB Up to Bt1,000 million senior debentures due 2009 BBB Rating Outlook: Stable