SET-listed L.P.N. Development plans to spend 1-2 billion baht on new land acquisitions for condo development after freezing purchases for more than two years to clear inventory and refocus on the upper-affordable segment.
Chief executive Daranee Chatphiriyaphan said the company's existing land bank, acquired before the current management team took over in 2024, had largely targeted the affordable segment.
"Over the past few years, buyers in the affordable segment have faced high household debt and tighter mortgage approvals, resulting in high rejection rates and a large volume of unsold condo inventory," she said.
Acquisitions for the firm's condo land bank were halted in early 2024, and the bank is close to fully developed, with only a three-rai plot on Rama III Road remaining, slated for development within two years.
L.P.N. plans to resume land purchases this year, with locations still focused on Greater Bangkok, but with a stronger emphasis on areas with genuine demand from the upper-affordable segment, rather than solely targeting the affordable segment as in the past.
Challenges in the affordable segment prompted the developer to adjust its strategy in 2023, shifting both its condo inventory and land bank towards the rental market, offering units with tenants to investors with guaranteed yields of 7-8% per year.
The strategy has proven effective, with the company achieving an occupancy rate of nearly 100% across more than 2,000 rental units, with monthly rents averaging 5,000 baht, said Ms Daranee. Of these, around 1,000 units have already been sold to investors.
Most of the rental and investor-sold units are located at Lumpini Township Rangsit-Khlong 1, the largest condo project developed by L.P.N. and one that previously carried a significant volume of unsold inventory.
Launched in 2013 and completed in 2019, the project sits on a 100-rai plot in Rangsit-Khlong 1, comprising 50 buildings and more than 10,000 units, with prices starting from 630,000 baht per unit at launch.
Roughly 300 units remain unsold, worth about 200 million baht, or 800,000 baht per unit, she said.
Rental condos generated 270 million baht in revenue for L.P.N. last year and helped reduce its condo inventory from 8 billion baht in 2024 to 7.1 billion baht by the end of 2025, equivalent to around 5,000 units.
L.P.N. expects total revenue to reach 7.6 billion baht by the end of 2026, up 13% from 6.73 billion baht last year, which declined 16% from 8 billion baht in 2024.
Rental income is projected to rise to 300 million baht, supported by the completion of a new project near Amata City Industrial Estate in Chon Buri, where rental demand is strong.
"We will continue focusing on the rental strategy and investor programme this year, as our existing land bank, acquired before I took over, makes it challenging for L.P.N. to reposition towards the upper-affordable segment with stronger purchasing power," she said.
Ms Daranee became chief executive in August 2024 after her family became the company's major shareholder earlier that year.
