Business Diversification Strategies of Mid-Sized Real Estate Development Companies Listed on the Stock Exchange of Thailand in the Post-Covid-19 Period from 2020 to 2024

Abstract

The COVID-19 pandemic significantly disrupted Thailand’s real estate sector, prompting developers to diversify their businesses to reduce reliance on a single core revenue source. This study examines the diversification strategies of mid-sized real estate companies listed on SET during 2020–2024. Data were collected from annual reports and consolidated financial statements of eight firms and analyzed using content analysis of business operations and diversification structures.

The findings indicate that 1) medium-sized companies can be categorized into three groups based on their level of business diversification: those highly reliant on their core business, those with a dominant core business but beginning to diversify, and those that are highly diversified. Despite diversification efforts, all companies retain their core focus on residential real estate development while expanding into related and unrelated activities to support revenue continuity. 2) Companies with high reliance on their core business generate the majority of their revenue from core activities, whereas highly diversified firms exhibit more varied revenue structures, ranging from moderate to low dependence on core income. 3) Companies that maintain a strong focus on their core business tend to achieve higher gross and net profit margins, while excessive diversification may weaken performance stability despite increasing revenue diversity.

Overall, although 75% of companies have adopted diversification to enhance revenue flexibility, companies maintaining specialization in their core business demonstrate superior profitability and financial stability. Key findings indicate that maintaining a 70% core revenue threshold reduces performance volatility. Ultimately, diversification success heavily depends on cost efficiency and overall portfolio complexity.