In a historic move, property developer LPN will have its non-development subsidiaries take outside jobs as it looks to increase its revenue. In addition to this, LPN will shift its focus to the high-end segment after it saw a sharp drop in presales and revenues in 2016, local media reports.
The 3 subsidiaries that will take non-company jobs this year are Lumpini Project Management Services, Lumpini Property Management Co, and Lumpini Property Service and Care Co, tells LPN Managing Director Opas Sripayak to the Nation.
“It will be the first time since our establishment 28 years ago that we will take outside jobs,” says Opas. “This will help the subsidiaries generate additional income and improve LPN’s profit margin by 1 per cent.”
Lumpini Project Management Services is the developer’s project management consultancy company. As part of the arrangement, the company will now allow other developers to invest in so it maintains a steady income and isn’t solely reliant on LPN which holds a 99.9 per cent stake in its subsidiary. The project management consultancy also works with over 20 firms in the construction business as well as materials suppliers.
Lumpini Property Management only manages LPN projects at the current time with 129 sites and more than 130,000 units under its watch. The company will start engaging in property management at non-LPN projects as it looks to compete with companies like Plus Property which was created by developer Sansiri but has since been sold.
“This year will be a year of shifts,” says Opas. “Last year we had problems with low-end customers, who are our main target, due to a high mortgage rejection rate, causing a sharp drop in 2016 presales and revenue.”
LPM earned THB 8.5 billion in presales and THB 13 billion in revenue last year. This was down from 2015’s numbers and below its 2016 target of THB 14.9 billion and 15.5 billion.
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