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Operations and market reviewThailandKeppel Thai Properties (KTP) is a listed company on theStock Exchange of Thailand. KTP is developing two detachedhousing projects in Bangkok under the “Villa Arcadia” brand.Villa Arcadia at SrinakarinVilla Arcadia at Srinakarin is a 367-unit detached housingdevelopment on a 16-ha site located at Srinakarin, about17 km southeast of Bangkok downtown. The modern tropicaldevelopment provides a resort-like ambience amidst lushlandscaping, together with full facilities including swimmingpools, a fitness centre, a sauna, a jacuzzi, a games room, alibrary, and 24-hour security. Some 98% of the 100 launchedunits has been sold as at end-February 2007.Villa Arcadia at WatcharapolKTP is developing its second detached housing project underthe “Villa Arcadia” brand on a 12.5-ha site located at Watcharapol,about 20 km north of Bangkok. The 270-unit bungalow project,designed by well-known RMJM Architects, will offer moderndesign, lush landscaping and water features, and full amenitiesincluding swimming pools, a clubhouse and a fitness centre.The project will be officially launched in 2007.KTP will remain focused on trading properties in the GreaterBangkok area and seek new sites for development in otherresidential segments.Market reviewEconomyModerate growth in 2007The Thai economy managed to post 5.1% GrossDomestic Product (GDP) growth in 2006, up from 4.5%growth in 2005, supported by sound fundamentals,strong exports and a fiscal surplus, despite uncertaintiesfollowing the change of leadership, the imposition ofcurrency and investment controls, the bomb attacks inBangkok, and proposed changes to foreign investmentlaws. The Thai economy is expected to grow at amoderate pace, underpinned by lower interest rates andoil prices, declining inflation, rising infrastructure spendingand recovering consumer confidence.ResidentialMore positive outlook in longer termThe residential market remained resilient in 2006 and willcontinue to grow, supported by steady economic growth,high employment levels, rising income and recoveringconsumer confidence.Housing demand will continue to focus on the midendsegment with convenient connection to the masstransport system, while good quality condominiums withrecognised brands will perform well due to increasing landscarcity and relatively high foreign demand. Future supplyranging from lower-priced condominium units to luxuryvillas will trend towards the eastern part of Bangkokaround the Suvarnabhumi International Airport and othernew infrastructure.Thailand 2005 2006E 2007F 2008FReal GDP growth (%) 4.5 5.1 4.5 4.8Commercial banks’ prime rate (average, %) 5.8 7.4 7.6 6.3Inward FDI (US$ Bn) 4.5 6 2.9 3.3Exchange rate (Baht/USD, average) 40.2 37.9 35.1 34.9Personal disposable income (US$ Bn) 95.5 108.8 126.0 136.8CPI change (average, %) 4.5 4.6 3.6 3.0Source: Economist Intelligence UnitOperations and market reviewThailandKeppel Land LimitedReport to Shareholders 2006147