Lalin leery of launching projects this year
Company banking on property incentives
Despite property incentives and a focus on the resilient low-rise housing segment, SET-listed developer Lalin Property Plc vows to be cautious in launching new projects amid concerns the global economy might wobble because of Mideast tension.
Chief executive Chaiyan Chakarakul said two stimulus packages could revive positive momentum from last year, particularly demand for the low-rise (single detached house, duplex and townhouse) market.
"The growth range of the low-rise market is projected at 2-4% in 2020 and it depends heavily on the global economy," he said. "The condo segment will experience a soft landing because of an oversupply carried over from last year."
The property incentives include a cut of transfer and mortgage fees to 0.01% from 2% and 1%, respectively, for units valued at 3 million baht or less until Dec 24, 2020.
The other is the Baan Dee Mee Down scheme, which offers a cash rebate of 50,000 baht for those who have monthly income of less than 100,000 baht or 1.2 million baht per year. The scheme is limited to 500,000 buyers who register by March 31.
Mr Chaiyan said Lalin's core products are low-rise houses priced 2-7 million baht per unit. More than 65% are units priced less than 3 million baht, which should get a windfall from both measures.
"We will be more careful with our business plan as the tension between the US and Iran could dampen the global economy," he said.
"The dispute could affect exports and tourism, the two engines driving the Thai economy."
The company plans to schedule a revised plan on a quarterly basis and gradually launch one project per month to adjust quickly if risks loom.
"Low-rise development is less risky than condos because of its flexibility, unlike the latter which usually takes two years to complete. Low-rise stock is also easier to manage," said Mr Chaiyan.
This year Lalin plans to launch 9-11 low-rise projects, worth a combined 5-5.5 billion baht. More than 90% will be in Greater Bangkok and the other in eastern provinces.
Lalin targets 6.2 billion baht in presales and 5.25 billion in revenue by the end of the year, up from 5.5 billion and 4.64 billion, respectively, in 2019, which was a gain of 13% from 2018.
"The only hope for driving the economy is the government's expenditure on megaprojects such as mass transit lines, new airports and high-speed rail as they can lead private investment and draw more foreign investors," he said.
LALIN shares closed yesterday on the Stock Exchange of Thailand at 5.20 baht, down five satang, in trade valued at 1.98 million baht.