LPN turns to rental revenue

LPN turns to rental revenue

A digital rendition of Lumpini Park Phahon 32.
A digital rendition of Lumpini Park Phahon 32.

SET-listed developer LPN Development plans to boost revenue from rental properties and services to reduce any possible impact from the residential market slowdown.

Chief executive and managing director Opas Sripayak said negative factors affecting housing demand and the condo market will continue this year despite property incentives.

"Last year we almost missed our annual presales target as the residential market was poor in the first nine months," he said. "Our nine-month presales were below half of the 2019 target."

With the government's property incentives, including reducing of transfer and mortgage fees to 0.01%, the company's fourth-quarter performance picked up, said Mr Opas.

LPN this year plans to launch 10 new projects worth a combined 12-13 billion baht and aims to have 10 billion in presales, up from 7 billion last year.

The projects comprise six condo sites together worth 7-8 billion baht -- in the Tao Poon area, on Charan Sanitwong Soi 65, on Narathiwat Ratchanakharin Road, on Chaeng Watthana Soi 17 and in the Ekkachai area with average prices ranging 40,000-130,000 baht per square metre.

Four of the new projects will be duplex houses with units priced from 5 million baht.

"We don't know how long the condo slowdown will last," he said. "We will speed up sales of our inventory worth 10 billion baht, which are ready to transfer, aiming for 50% sold by year-end."

LPN this year also plans to rent out more condo units at completed projects where units remain unsold. Lumpini Township Rangsit Klong 1 was a pilot project that commenced in late 2018.

The company rents out 1,600-1,700 units at this project, averaging 5,000 baht in rent per unit.

The second project will be Lumpini Park Phahon 32, a new condo completed last month. Only 30% of the 524-unit project has been sold. LPN plans to rent out 100 units for 8,000 baht per month each.

LPN aims to generate 200-300 million baht from recurring income, led by rental properties and services such as property management to cover the company's annual expenses of 200-300 million baht if revenue from property development is insufficient.

LPN shares closed yesterday on the SET at 4.90 baht, up 16 satang, in trade worth 28.4 million baht.

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