LPN to use flexible rate for new condo site

The move is expected to reduce its risk from exposure to rising building costs, managing director Opas Sripayak said yesterday.

LPN plans to start the scheme next week at its building site at Rama 9-Ratchadapisek.

Opas said prices would be 5-10 per cent higher should demand pick up.

If home-buyers show strong interest during the launch, LPN may raise prices to cover higher building expenses. But if demand is stable or weak, LPN may consider lowering prices, he said.

By pursuing this strategy, the company said it should maintain a gross margin of 30 per cent and a net profit of "up to 14 per cent" this year.

Its construction costs had risen between 7 per cent and 10 per cent this year, compared with costs last year.

The company expected to earn Bt8 billion by the year-end after recording Bt1.39 billion in revenue with a net profit of Bt204.33 million in the first quarter.

"We expect the target should be achieved after recording pre-sales of Bt4 billion in the first five months of this year. We expect that to grow to Bt5 billion by the end of this month after the launch of Lumpini Place Rama 9-Ratchada," he said.

"That will be bring the company  total revenue of nearly Bt4 billion in the first half of this year," he said.

Opas said demand for residential projects located near a subway or skytrain station should continue to be strong as long as fuel prices continue to stay high.

He said condominiums were still in short supply when factoring cases where many projects face difficulty in complying with building regulations that are now strictly enforced by agencies such as the Environment Impact Assessment (EIA) body.

The rules have delayed many projects in the first half of this year, he said.

LPN has a market share of about 30 per cent of condominiums launched and registered in the market this year, up from a 20-per-cent share last year.