LPN targets foreigners as local condo buyers dwindle

Some 200 units at the Lumpini Suite Phetchaburi-Makkasan condominium have been bought by foreigners, mainly from China.

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SET-listed L.P.N. Development Plc is tapping more foreign buyers as it plans a shift to the middle-to-upper-end segment this year.

The company aims to boost sales from overseas to more than 10%, up from less than 2% now.

Managing director Opas Sripayak said the company this year will introduce new projects in the upper-end segment, catering mainly to foreign buyers through Singapore-based property agent Angel Real Estate.

"We need to find new buyers overseas," he said. "The middle-to-higher-priced condo market needs to rely on foreign buyers because Thai buyers in this segment are limited and there are a lot of products available."

The first project L.P.N. introduced to foreign buyers was the 2.5-billion-baht Lumpini Suite Phetchaburi-Makkasan launched last month. Of the total 636 units, 280 units or 45% were reserved for the agent to sell to foreign buyers, with about 200 units sold.

Mr Opas said the overseas market for L.P.N. products will be in relatively smaller cities in China like Shenzhen, as those in big cities like Beijing prefer units priced higher than 10 million baht. At the Makkasan site, the highest unit price was 6 million baht, which matches wealthy investors in smaller cities.

"Although selling to foreigners comes with a relatively high risk of cancellation, we are unlikely to make any losses because we collect 25% of the unit price as a one-off down payment from them," Mr Opas said.

L.P.N. this year plans to launch 12 new condo projects worth a combined 20 billion baht. Of this amount, eight sites will be in the higher-priced segment with units priced higher than 100,000 baht per square metre. The remaining four will constitute lower-end products.

Mr Opas said a shift to the middle-to-high-priced segment is one of the company's strategies this year to maintain sales growth, with the aim of achieving 10 billion baht in revenue and 20 billion in presales.

"This year we will see a mix of condo development between low- and high-priced projects and no longer cling to any one segment," he said. "Development of only low-end products hurt us last year, largely due to high household debt and banks' mortgage rejections."

Half of the presales target will stem from high-priced units, the other from low-priced units.

Although the company's shift to the upper-end segment is meant to move development locations from the outskirts to inner-city areas where land prices are much higher, the company's land investment budget this year will be close to that of 2016 at 4 billion baht.

LPN shares closed yesterday on the Stock Exchange of Thailand at 12.40 baht, unchanged, in trade worth 125 million baht.