Major-AIG project unveiled MJAI Development Co, a joint venture between AIG Global Real Estate Investment (Asia) and Major Development Plc, has launched its first project, the three-billion-baht Royce Private Residences on Soi Sukhumvit 31.
AIG Global Real Estate Investment (Asia), the property arm of the US insurer, chose Major because it saw the potential for condominium development in Bangkok, according to its managing director Patrick M.S. Lee.
AIG normally expects double-digit returns on real estate, he added.
The initial investment for construction would be two billion baht for the Royce Private Residence. Half of the amount would be supported by Tisco Bank, he said.
‘‘We will see the response from this project before deciding to investing more. AIG has no limitation of investments in real estate sector in Thailand. We don’t focus only on super-luxury [projects] or condominiums as the company wants to explore the opportunities in other segments.’’
AIG can contribute to MJAI by sharing its client database. The joint venture also plans roadshows in Singapore and Hong Kong to seek potential customers.
Suriyon Poolvoralaks, the president of Major Development, said demand for condominiums remained strong, especially in prime locations.
Of the total condominium projects launched last year, 35% are located in Sukhumvit Road, 18% on the riverside, 14% on Rama III Road, and 13% on Silom and Sathorn Roads. The take-up rate in central Bangkok was 73% or 15,195 units.
However, super-luxury projects lagged far behind, accounting for only 1% of total launches or only four projects including The Sukhothai Residences and St Regis Hotel & Residences on Ratchadamri Road.
He said the average unit price of super luxury condominiums rose by 23.7% year-on-year, or at 136,300 baht per square metre. ‘‘In the super-luxury segment, there are fewer players and the segment has high potential to grow. All of them are located in Silom, Sathorn and Rajdamri areas but none in Sukhumvit,’’ said Mr Suriyon.
The company launches Royce Private Residence, located on a three-rai plot on Soi Sukhumvit 31, with 165 units, sized from 111 to 462 sq m, with prices ranging between 15 million and 52 million baht or 150,000 baht per sq m.
Since a soft launch last weekend, the company has already recorded 30% of sales to its existing customers. It aims to sell at least 50% of the project by the end of the year and expects a gross profit margin at 30-35%.
The company will also launch another two projects next month worth a combined six billion baht. One is a low-rise condominium in Hua Hin on a 16-rai plot, with a unit price at 140,000 baht per sq m. The other is a high-rise condominium in Pattaya at 120,000 baht per sq m. It plans to sell a total of 400-500 units from the two projects.
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