LH to invest B4.6bn

The country's largest developer Land & Houses Plc (LH) is more confident in the country's economic and political situation and plans to increase investment this year to 4.6 billion baht, according to senior executive vice-president Adisorn Thananan-narapool.

He said the new investment reflected the company's view that the political situation was clearer and that consumer confidence was improving.

The company expected a recovery in residential demand from now onwards and would spend four billion baht to acquire new land for housing development in 2009-10, up from three billion in 2007.

''We should buy more plots of land,'' he said. ''The property market is accelerating and the new government announced megaproject plans that will open new areas for commercial and residential development.''

The company also said that land prices had stabilised because fewer housing developments were launched last year and lenders had become more strict in approving finance for developers and mortgages for buyers.

The main source of investment in the new land will be working capital. However, LH might issue warrants due to falling interest rates. Last year it issued two billion baht in warrants from a total of five billion baht approved by the board.

With an attempt to cap construction costs that rose 8%, the company stocked thousands of tons of steel, sanitaryware, tiles and cement sufficient for six months of development this year. It would increase unit prices by 2-3% within the year, he said.

LH plans to launch 14 housing projects worth 12 billion baht in 2008. They would be two pre-built condominiums, five townhouse projects and seven single-housing estates.

The company expects to earn 21 billion baht by the end of the year, up 13% from 2007. Major revenue would be from single-housing sales, accounting for 85% while net profit would also increase from 16.9% of total revenue.

Mr Adisorn said the company expected its gross profit margin to pick up slightly this year from 30.5% in 2007 to 31%.

''Margins this year will improve as our spending for marketing and advertising campaigns will decrease,'' he said.LH would also spend 500-600 million baht to raise funds for L&H Property Ltd, a joint venture with the Singaporean Government. LH would hold 60% while the Singapore Investment Corporation (GIC Real Estate Pte) would hold 40%.

The subsidiary needed an investment of five billion baht within three years to develop a project on a 10-rai site at the Asok-Sukhumvit junction, which would comprise of 500-600 serviced apartment units and retail space of about 30,000 square metres.

L&H Property has two projects in hand including L&H Villa Sathorn Bangkok, single houses for rent at rates between 100,000 and 200,000 baht a month, and Grand Centre Point Hotel & Residence Ratchadamri with 500 rooms at 8,000 baht a night.

LH shares closed yesterday on the SET at 8.50 baht, down 0.15 baht, in trade worth 221.2 million baht.

KANANA KATHARANGSIPORN