LPN is restructuring its organization to drive forward with the 'Turnaround' plan for 2022-2026, launching 16 new projects in 2022 worth a total of 11 billion baht, aiming for sales to reach 13 billion baht.

Mr. Opas Sripakdi, CEO and Managing Director of L.P.N. Development Public Company Limited (LPN), revealed the business plan for 2022, stating that following a three-year strategic plan (2021-2023) aimed at sustainable growth (Turnaround) in 2021, the company had to adapt due to the COVID-19 pandemic. This led to internal restructuring and a strategic plan adjustment from three years to five years, starting from 2022 to 2026, while maintaining growth targets in terms of revenue and profit. This will be achieved through efficient cost management using data (Big Data) to analyze customer needs (Customer Insight) for the development of both residential houses and condominiums that meet all customer requirements under the concept of 'Livable Home' at an affordable price, building on the idea of 'livable communities' to expand the customer base to the younger generation.

“To align with the planned objectives, the company has restructured its organization and adjusted its housing development concepts to meet buyer demands by incorporating digital technology to enhance operational processes (Digital Transformation). This will improve decision-making agility, increase efficiency in cost management, and elevate customer experience (Customer Experience) to ensure sustainable growth for the organization, with a revenue target of no less than 16 billion baht by 2026, after overcoming the business risks faced in 2021 while maintaining a reasonable revenue and profit generation rate, despite the challenges posed by the COVID-19 pandemic that required all sectors, including real estate, to adapt,” Mr. Opas stated.

2022 is thus a year of significant transformation (Year of Business Transformation) focusing on five key areas:

  • Corporate Transformation
  • Management Transformation
  • Project Development Transformation
  • Digital Transformation
  • Brand Transformation

Corporate Transformation: Business Structure Change

In 2022, the company is restructuring its business by separating real estate from service operations to clarify management and facilitate future business expansion. Under the new business structure, L.P.N. Development Public Company Limited (LPN) aims to be a developer of both condominiums and residential houses, with primary income from housing sales, while the service management business will be operated by LPP Property Management Company Limited (LPP), led by CEO Surawut Sukjareonsin.

With this structural change, LPN retains 100% ownership of LPP, allowing LPP to operate independently, particularly in creating new service business opportunities. The LPN group, encompassing both real estate and service sectors, aims for continuous growth of no less than 10% per year in both areas.

“This business restructuring will enable the real estate sector to expand and create new business partnerships, while LPP can broaden its service scope and customer base, as well as create new business opportunities,” Mr. Opas remarked.

Management Transformation: Structural Management Change

The company is restructuring its real estate management from a functional organization to a business unit model, continuing from 2021. This involves dividing into three business units: one responsible for developing condominiums, one for developing houses priced below 10 million baht, and one for developing houses priced above 10 million baht.

This management restructuring is a continuation from 2021 and will be clearly operational in 2022, allowing each business unit to work more flexibly in project design and development to quickly meet the needs of buyers in each segment.

Project Development Transformation: Project Development Change

The project development plan for residential projects, including condominiums and houses in 2022, emphasizes developing projects that meet the needs of the younger generation, who seek unique housing. This involves developing smaller projects designed under the 'LPN Design' concept to create 'Livable Homes' suitable for the younger generation and families of all ages.

This development plan will be implemented in launching 16 new projects in 2022, valued at a total of 11 billion baht, including five condominium projects worth 7 billion baht, focusing on uniqueness across various locations, and ten residential projects priced below 10 million baht, valued at 3.3 billion baht, along with one residential project priced above 10 million baht, valued at 700 million baht. The land acquisition budget is set at 4 billion baht for developing residential projects in 2022-2023.

Under this concept, the company plans to develop no less than 70 new projects from 2022 to 2026, with a total value of no less than 50 billion baht, and cumulative sales over five years of no less than 50 billion baht, aiming for sales of 13 billion baht in 2022, a 46% increase compared to 8.9 billion baht in 2021.

Digital Transformation: Technological Change

Since the COVID-19 outbreak from late 2019 to the present, the company has restructured its operations by incorporating digital technology as a tool to streamline processes and reduce costs, enhancing management agility and compiling customer data for developing housing that meets all customer needs. Continuing into 2022, the company aims to leverage digital technology to support marketing and sales, creating a new experience for project visits through 3-D Virtual tours in 360 degrees, which began trials in 2021 and will be expanded in 2022, along with analyzing customer demand data (Big Data) to develop projects and services that meet current customer needs and those of the younger generation in the future.

Brand Transformation: Brand Image Adjustment

In 2022, the company emphasizes building brand awareness for LPN as a housing developer under the 'Livable Home' concept targeting the younger generation aged approximately 25-35 (Gen Y), who are starting their careers (First Jobbers), becoming entrepreneurs, and including startups, with plans to launch new brands for both condominiums and houses in 2022.

Mr. Opas stated that the changes in these five business areas aim to strengthen LPN's organizational drive now and in the future, ensuring agile management and maintaining a continuous growth rate of no less than 10% per year, even as the real estate sector faces uncontrollable risks in the future.

Real Estate Market Expected to Recover by 5-15% in 2022

Regarding the real estate market trend in 2022, Mr. Opas noted that the market has already passed its lowest point in 2021, and 2022 is expected to be a recovery year after a continuous decline in new project launches from 2019 to 2021 due to a decrease in inventory from marketing campaigns that stimulated purchasing power. This has prompted real estate operators to accelerate new project launches in 2022 to replace the reduced inventory. Additionally, government measures such as reducing mortgage and transfer fees to 0.01%, along with the Bank of Thailand's temporary easing of loan-to-value (LTV) regulations to a ceiling of 100%, effective until the end of 2022, and persistently low market interest rates, are expected to stimulate the real estate market, which is projected to grow by 5-15% compared to 2021.

However, in 2022, there remain risk factors that the real estate sector must be cautious of, such as high household debt reaching 90% of GDP, which could impact purchasing power and borrowing capacity for housing from financial institutions, cautious lending approvals from financial institutions, and the spread of the COVID-19 Omicron variant, which could affect economic recovery—factors that are difficult to predict.

“Despite the uncontrollable risk factors impacting economic and real estate sector dynamics, LPN's organizational restructuring since 2021, continuing into 2022, gives the company confidence that it can drive the organization to grow according to the set goals,” Mr. Opas concluded.