Thailand’s largest developer, Land & Houses, will focus on non-residential development and international investment projects instead of domestic housing developments due to weak demand. Despite this, the company will still launch some 14 residential projects in Thailand this year.
Managing director Adisorn Thananan-narapool said that L&H wants to double its total investment this year to THB14 billion. Of this total, THB7 billion will spent on new plots of land for housing developments. The Bangkok Post noted that the remaining budget will be used for acquisitions and development of company’s rental property business. L&H will spend USD100 million to buy an apartment building in San Francisco and renovate it at a cost of USD10 million. The developer has spent THB10 billion in the US with the company focusing on the San Francisco Bay Area in particular.
“Investment in US rental apartments is attractive. Last year we gained a 50 percent profit from our first apartment. We sold it for USD18 million last year after buying it for only USD12 million in 2012,” Adisorn said.
L&H has also budgeted THB1.2 billion for the continued construction of a hotel on Thong Lor that will have 440 rooms. The developer will also spend THB800 million to continue development of its Terminal 21 branch in Pattaya. The company earned THB2.3 billion in revenue from its rental business in 2015 which was a THB2 billion increase from its 2014 returns.
Despite the company not being optimistic regarding Thailand’s residential property market, L&H is still planning to launch 14 residential projects worth a combined THB23.5 billion this year. There will be nine single house projects, three townhouse projects and five condominium developments launched by the company.
“The property market this year will be flat again as the country’s economy still cannot rely on exports,” said president Naporn Sunthornchitcharoen. “The middle- to upper-end housing market will continue growing from last year as the economy is really hurting the lower-income segment.”