Firm has 600 detached homes in reserve
With 600 new homes in reserve for the first half of the year, Lalin Property Plc will maintain its prices to compete with other developers, chief executive officer Chaiyant Chakarakul said yesterday.
Lalin started building the detached homes in November, he said, believing construction costs would rise this year once the government lifted its diesel oil subsidy and interest rates climbed again.
“We’ve tried to maintain our construction costs this year to nearly those of last year, and as a result we have a stock of recently completed houses and will pre-sell them during the first half of this year.”
Chaiyant said the company expected demand for new homes to continue growing at 15 per cent because the economy is recovering across the board, with the production and export sectors currently enjoying much stronger growth.
With such healthy market sentiment, Lalin expects its sales to rise by up to 20 per cent this year from its year-end total of Bt2.3 billion, he said – higher than the housing market as a whole thanks to its reserve stock.
The firm can therefore keep the price of its houses to nearly that of last year, while other developers are raising theirs by up to 10 per cent this year as construction costs increase, Chaiyant added.
Lalin had a net profit of Bt580.48 million at the end of 2004, down 26 per cent from Bt784.4 million the previous year.
Chaiyant said sales declined last year because homebuyers were aware the government would revoke tax privileges in 2004 and had therefore made their move in 2003.
Lalin will invest up to Bt2 billion to launch four new detached-home projects this year, collectively worth Bt4.55 billion.
Pre-sales will take place in the first quarter for those at Buri Ram Outer Ring Road-Pinklao and Buri Ram Rama II-Ekkachai. The other two – Baan Lalin and Lalin Greenville – will pre-sell in the second half of the year.
The company will invest another Bt1 billion to bank land this year for new detached housing in 2006.
It is mobilising funds by issuing debentures worth Bt800 million over three years, with average annual interest of 4.3 per cent, and promissory notes worth Bt300 million at 2.85 per cent interest per annum.
“We have enough money to develop our new projects this year, and our debt-to-equity ratio is still lower than 1:1,” Chaiyant said.
Published on March 01, 2005