Young adults buying condominiums as their first homes are driving demand for high-rise residences, which will result in strong growth in the condo sector for the next three to five years, LPN Development managing director Opas Sripayak told The Nation in an interview.
LPN, the leader in the condominium market, plans to launch its first luxury condo project, priced up to Bt115,000 per square metre, on Rama III Road in October.
Opas said homebuyers' preferences had changed over the past five years as traffic in the central business districts (CBDs) grew worse and mass transit expanded.
Previously, he said, Thais viewed condos as suitable for a second home, as their primary residence should be a low-rise. As a result, more than 70 per cent of sales were single detached houses, twin-houses or townhouses, and only 30 per cent were condominiums.
Now, however, condominiums have about a 50-per-cent share of total market volume, according to research by the Real Estate Information Centre.
Opas said the trend towards smaller condominiums had been driven by limited land in the CBDs, and consequently higher land prices, as well as changed customer demographics and lifestyles.
Ten years ago, people who bought condominiums were aged between 35 and 45 years. Most of them needed units with one or two bedrooms to accommodate their families.
Now, condo buyers tend to be between 25 and 30, and want smaller units such as studios or one-bedrooms, which not only suit their needs but are in their price range.
LPN Development manages 60 condominium projects with a total of more than 40,000 units around Bangkok. It caters to buyers of medium-sized and smaller condominiums.
Opas said the company tried to develop and design residences to suit its customers' demands.
"Before we launch a new project, we research customers' behaviour and demands and tailor our products to suit our target customers," he said.
For example, when the company launched a project with one-bedroom condominiums of only 25 square metres at Lumpini Condo Town Ramintra-Nawamin last year, it sold out within three hours.
This year, the company introduced studios of just 22sqm in the second phase of the Lumpini Condo Town project. That phase sold out within one day.
"We believe that the young generation will accept the concept of staying in a small space if the project has good community facilities. This is the selling point for our business," Opas said.
ENTRY TO LUXURY MARKET
However, LPN will also try to make inroads in the luxury market with the launch of Lumpini Park River View Rama III, which will open to pre-sales in October. It is the group's first luxury condominium project this decade, asking Bt115,000 per square metre for a villa or Bt12 million for a three-bedroom unit.
The project will integrate three building types: villas close to the Chao Phya River, condominiums, and home offices. Condominiums behind the villa complex will be priced at Bt1.7 million per unit or about Bt60,700 per square metre.
"This is our group's first luxury condominium project after the economic crisis of 1997. This is the best location for it and the demand is there," Opas said.
The company does not wish to limit its business to the middle market only but has tried to find new business opportunities by building residences that match customer demand and also offer the best community facilities, he said.
"Our business's stress on creating good communities is why we have the best relationship with our customers. We also manage all of our projects after transferring them to the customers, so they can trust our after-sale service," he said.
To foster such trust, during the last weekend of August, the company conducted a seminar for directors of its condominium community that now has 60 buildings, or 40,000 units, in Cha-am.
Although the condominium market is highly competitive, Opas believes LPN's business strength will drive its growth, as the market expands over the next five year along with establishment of new mass transit routes.
LPN Development expects total pre-sales between Bt15 billion and Bt16 billion by the end of the year after recording pre-sales of Bt11 billion in the first seven months.