CPN’s residential arm synergises with its shopping mall business
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CPN RESIDENCE, a housing developer under listed company Central Pattana, aims for annual growth of at least 10 per cent, and is planning to launch five or six residential projects next year.
“CPN is aiming to use land [owned by the company] to add value to our core retail business,” said Preecha Ekkunagul, president and chief executive officer of Central Pattana.
“CPN Residence has been assigned to be in charge of residential development adjacent to our key shopping centres. This allows the company to enhance the business, creating a strong customer base to fulfil the lifestyles and needs of the new generation of customers as well as helping to create opportunities to bring out further potential from Central Group’s diversified business lines.”
Early this year CPN Residence launched its first three Escent condominium projects in Chiang Mai, Rayong and Khon Kaen. The project in Chiang Mai is fully booked, while more than 80 per cent of the other two properties have been reserved.
Construction of the three projects began in May and is due to be completed in the first quarter of 2018. They are expected to generate total revenue of Bt2.735 billion for CPN.
The 400-unit project in Chiang Mai is targeted to generate Bt925 million, the 419-unit condominium in Rayong will contribute Bt910 million and the 408-key high-rise project in Khon Kaen will create Bt900 million. Kree Dejchai, executive vice president for special project development, CPN Residence would look for opportunities to develop both low- and high-rise projects near CPN’s properties.
“We target customers with purchasing power from the middle to the high category,” he said.
The three projects are located near CentralFestival Chiangmai, CentralPlaza Rayong and Central Plaza Khon Kaen.
Kree said that before launching those projects, his team conducted feasibility studies for almost two years to make sure they understood customer behaviour in the three locations, and carried out detailed market surveys. He said residential projects were lucrative as they can generate gross profit of 30-35 per cent and net profit of 10-15 per cent.
Currently CPN operates 29 shopping centres nationwide and plans to continue establishing new ones every year. Having residential buildings nearby should increase the customer traffic at each shopping complex.
For example, half of the buyers of condos at Escent Chiang Mai are customers of CentralFestival Chiangmai. “Next year, we expect to have five to six new residential projects in Bangkok and the provinces. Those new projects are targeted to increase revenue by at least 10 per cent from this year’s,” he said.
