LPN collaborates with Nye Estate, a strong partner, to penetrate the office market as part of a revenue diversification strategy to mitigate risks from the condo market. They have established "Donsiri Development Co., Ltd." to develop an office building on Rama 4 Road valued at approximately 1.5 billion baht.

 

          At Lumpini Tower: Mr. Opas Sripak, CEO of L.P.N. Development Public Company Limited (LPN), announced a joint venture with Nye Estate Co., Ltd. (NYE), a leading real estate developer, to form a new company, "Donsiri Development Co., Ltd.,” with a 50:50 investment ratio to jointly develop office and retail rental spaces in a prime location on Rama 4 Road. LPN was the first to pioneer this area in 1989 with the development of "Lumpini Tower," the first office condo project, which became the company's first highly successful project.

 

          Currently, the demand for office buildings remains very high, especially for quality offices in the city center. Rama 4 Road has seen rapid growth over the past 2-3 years and is set to become another important New CBD as it connects the inner CBDs like Silom, Sathorn, and Rama 3 with the Ratchaprasong, Phloen Chit, and Sukhumvit areas. Additionally, it features major mass transit systems such as the BTS Skytrain, MRT subway, and expressways, leading to significant development of large mixed-use projects and Grade A residential condominiums along the road, such as One Bangkok and Samyan Mitrtown by TCC Group, as well as Grade A residential projects from Land and Houses Public Company Limited, Ananda Development Public Company Limited, and Chulalongkorn University Property Management Office, available in both Freehold and Leasehold formats. Currently, Grade A office rental rates average 1,000 baht per square meter, representing a high fixed cost for business operations, making Grade B office spaces at a rental price of only 600 baht per square meter highly sought after in the market, attracting experienced developers to develop them.

 

          "LPN and Nye Estate have previously collaborated and understand each other's strengths. This joint venture presents a great opportunity for both companies to leverage their experience and expertise to develop projects that generate continuous dividend income, reducing risks from competitive pressures and negative factors affecting the real estate business. Furthermore, the company will utilize cash flow for business operations and loans under conditions that will not impact dividend payments to LPN shareholders in any way,"

 

          The office rental project under the development of "Donsiri Development Co., Ltd." will be a new brand on a prime 3 rai 7.5 square wah plot on Rama 4 Road, with a lease term of 55 years. The land is owned by Triksha Co., Ltd. and comprises a total usable area of 22,600 square meters, divided into approximately 21,000 square meters of office space and about 1,600 square meters of retail space, which will greatly facilitate business operations for tenant companies.

 

In previous collaborations, LPN partnered under "Kamala Senior Living Co., Ltd." with Nye Estate Co., Ltd., Chewathai Public Company Limited, and Ch. Karnchang Public Company Limited to develop a premium Lifestyle Senior Living Village project in Phuket, valued at 3.5 billion baht, equipped with five-star amenities and services to cater to diverse lifestyles, managed by a professional team from abroad.

 

Information Details

  1. Donsiri Development Co., Ltd. (considered a subsidiary of LPN) will be established by the end of Q1 2019.
  2. Registered capital: 1,000,000 baht (one million baht).
  3. Number of shares: 10,000 common shares.
  4. Share value: 100 baht per share.
  5. Shareholder structure: L.P.N. Development Public Company Limited and Nye Estate Co., Ltd.

 

Project Location: Located on Rama 4 Road, Phra Khanong Sub-district, Khlong Toei District.

 

Investment in the project: The budget for developing the office and retail rental project is approximately 3.791 billion baht.

(Three billion seven hundred ninety-one million baht) divided into

  1. Investment in a long-term lease contract for 55 years totaling 2.339 billion baht.

  2. Investment value for project development approximately 1.5 billion baht.

 

This will be funded by LPN and NYE, along with project loans.

 

Thank you for the information from www.lpn.co.th