CHIANG MAI - SET-listed property and retail developer Central Pattana Plc (CPN) plans to use land plots close to its shopping malls nationwide to develop residential projects, aiming for annual revenue growth of 15% from the housing business from 2018 onwards.
Kree Dejchai, executive vice-president for special project development, said the company would launch four or five new residential projects worth 3 billion baht in the second half of the year and in the following year.
"The plan aims for revenue growth to 3 billion baht in 2019, which will be the second year that we realise revenue from residential development," Flt Lt Kree said. "We are eyeing five plots of land near our shopping malls in Greater Bangkok and the provinces."
For 2018, CPN forecasts 2.35 billion baht in revenue from the first three residential projects from sales launched this year under the Escent brand.
The three projects, located in Chiang Mai, Khon Kaen and Rayong, are worth 925 million, 900 million and 910 million baht, respectively.
They are located in or close to CentralPlaza shopping centres in those provinces. The Chiang Mai site will be a 26-storey building with 400 units, now sold out. The Khon Kaen and Rayong projects will have 408 and 419 units and their sales rate now exceeds 85%.
The combined investment of the three projects is reportedly 1.62 billion baht.
Flt Lt Kree said that despite the slowing condo market in the provinces, CPN was able to achieve a high sales rate with selling prices of 73,000 baht a square metre in Chiang Mai and Khon Kaen and 70,500 baht per sq m in Rayong.
"The key [to success] may be locations close to shopping malls," said Flt Lt Kree, who resigned from SET-listed developer SC Asset Corporation Plc to join CPN three years ago.
"Today, the property development trend is towards mixed use. Residential developers come across the retail property business and vice versa for retail developers."
Residential business is nothing new for CPN, which has 12 condo units for rent with a total lettable area of 1,568 sq m near CentralPlaza Bang Na and an occupancy rate of 37% in the first quarter.
Late last year, CPN changed one of its subsidiaries, CPN Construction Management Co, founded in 2008, to CPN Residence Co Ltd for residential development. CPN increased the subsidiary's registered capital to 1 billion baht from 1 million.
Vacant land plots near CPN's shopping malls will be used to develop condos, home offices, townhouses and single houses.
One of the large plots is a 40-rai site near CentralPlaza Phitsanulok, where a low-rise project is feasible but further market study is needed.
"Our plots are the first priority. If they are not feasible, we will buy new ones," Flt Lt Kree said.
With a total investment of 13.5 billion baht, CPN is building three new malls in Nakhon Si Thammarat with 26,000 sq m, being opened in July this year, Nakhon Ratchasima with 56,000 sq m and Phuket phase two with 63,000 sq m, which will be opened next year.
CPN shares closed yesterday on the Stock Exchange of Thailand at 58 baht, up 50 satang, in trade worth 392 million baht.