L.P.N. plans townhouses

B600,000 condos will also be built

L.P.N. Development Plc, which has specialised in developing budget condominiums, will diversify into townhouse development with 50 townhouses on a four-rai plot in the Lat Phrao area, according to managing director Opas Sripayak. The plot, located close to the Lat Phrao subway station, had earlier been planned for a condominium development but later the company was sued for illegal collection of title deeds and the court ordered it to stop the condominium development.

After resolving the legal issue, the company plans to develop a townhouse project worth 300-400 million baht with units priced between six million and seven million baht. The project would be developed by the company's new subsidiary, Porn Santi Co, whose managing director will be announced next month.

The new subsidiary would develop more townhouse projects in 2008 in the same locations as L.P.N.'s current condo projects including those near the National Cultural Centre and in the Pin Klao, Ratchadaphisek and Saphan Khwai areas.

Mr Opas said L.P.N. planned to launch 3,500 units of 600,000-baht condominiums for low-end buyers next month of which sales are expected to close within a month.

The target customers are people with fixed salaries in the range of 10,000 to 15,000 baht who currently rent rooms or houses. To speed up their decisions, the company would offer a monthly payment of between 2,500 and 3,000 baht, on par with their rents.

As the group is considered risky, L.P.N. would also ask financial institutions to offer special packages for this market segment. Among the privileges these packages may offer is longer repayment periods to help reduce their burden.

The pilot project, located on 32 rai in Ramkhamhaeng 43/1, will comprise 14 eight-storey buildings worth a combined 2.4 billion baht. It would be developed under a new brand, Lumpini Condo Town.

He said the company had experience catering to the low-end segment with the launch of Lumpini Center Happy Land in 1999 at prices of 280,000 baht a unit.

''For eight years, the quality life of people living in the project has not been different from that in our other projects. We're confident the new project will not turn into a slum or lack good management,'' said Mr Opas.

He added tricycles to transfer residents would be provided as the project was quite large, about one kilometre in length.

He said that if the pilot project received a good response from buyers, the company would adapt the concept to develop a very large mixed housing project with 10,000 units of all price ranges over the next few years.

A new project on up to 100 rai would consist of residential units of all price ranges but the key challenge will be how to manage such a large number of units efficiently.

This year, L.P.N. plans to launch five condominium projects with a total of 8,100 units worth a combined 8.8 billion baht. Three of them would be extension projects in the current locations, and the other two Lumpini Condo Town and a project in a new location with 1,200 units worth 1.2 billion baht. It expects to realise revenue of 6.3 billion baht this year from unit transfers at three projects.

Last year, L.P.N. recorded sales of 3,667 units worth a combined 6.7 billion baht. They generated five billion baht, up 40% from 2005, from the transfers of four condominium projects with 3,152 units.

Of the total of 14,000 condominium registrations in 2006, L.P.N. had the largest market share, accounting for 31%, followed by Supalai. Meanwhile, the new supply launched last year was 30,000 units, up from 11,500 in 2005.

''This year, the new condominium supply may reach 50,000 units provided there are no more bombs in Bangkok,'' he said.

LPN shares closed yesterday on the Stock Exchange of Thailand at 5.15 baht, down five satang, in trade worth 5.54 million baht.

Source: Bangkok Post by Kanana Katharangsiporn.
Tuesday January 09, 2007