After missing its 2019 target, SET-listed developer Land & Houses Plc (LH) aims to focus on its core business: housing and rental properties.
Chairman and chief executive Naporn Sunthornchitcharoen said the residential market sentiment is still gloomy, with flat growth from a glum economic outlook.
"We need to be more cautious and focus on our expertise and core businesses -- housing and rental property development," he said.
LH targets 28 billion baht in sales and revenue from housing development this year. Last year it posted 25 billion baht in sales, below its target of 30 billion.
The company expects 5.3 billion baht in revenue from rental properties in 2020, up from 5 billion last year.
"Rental properties can generate recurring income each year. We can also gain extra income once we sell them into a real estate investment trust," said Mr Naporn.
Last year, the company's investment was lower than the budgeted 10 billion baht as inflated land prices and an unfavourable market limited spending to 6.5 billion. Of the amount, 1.5 billion baht was poured into rental properties, half its budget of 3 billion.
"We spent only 5 billion baht on land purchases last year, lower than the budget of 7 billion, as land prices were so high," he said.
This year LH plans to spend a total of 11 billion baht: 7 billion to buy new plots for future residential projects and 4 billion for rental properties in Thailand.
For rental properties, more than 2 billion baht is allocated to the construction of Terminal 21 Rama III and Grande Centre Point Pattaya 2 Hotel.
Terminal 21 Rama III, worth 4.5 billion baht, will be located on a leasehold 15-rai plot on Rama III Road. This project will have a lettable area of 38,000 square metres and is scheduled for completion in the fourth quarter of 2021.
The 3.4-billion-baht Grande Centre Point Pattaya 2 Hotel will be located on a 13.5-rai site with 490 rooms and is slated for completion by the third quarter of 2022.
Some 85% of LH's rental revenue in 2019 was from Thailand, with the rest from the US.
The company has four apartment towers with a total of 800 rooms worth a combined US$450 million in the US. Three are in the San Francisco Bay area and the other is in Oregon. The occupancy rate was over 90%.
"We plan to sell one of the apartments in the US this year and will re-invest there," said Mr Naporn. "Since the company's first investment in the US in 2012, we've bought a total of six apartments and sold two of them."
In Thailand, LH has planned 16 new residential projects worth a combined 28.4 billion baht. All will be low-rise houses with 13 sites in Greater Bangkok and one each in Chiang Mai, Phuket and Ayutthaya.
Those sites comprise 10 single detached house projects, two townhouse projects, three semi-detached house projects and one mix of single detached houses and townhouses.
LH shares closed yesterday on the SET at 10.30 baht, unchanged, in trade worth 142 million baht.