10 projects worth B4bn (Bangkok)

New condominium launches this year are likely to drop by 25% from 2007 due to higher competition in the market and rising construction costs, says Mayta Chanchamcharat, chief executive officer of the developer Plus Property Co. New condo units would total less than 30,000, down about 25% from last year. But demand remains strong as consumers are concerned more with travel expenses because of high fuel prices. ''We have seen signs of a slowdown since last year. Many small and medium-sized developers faded from the market, while the remainder were selling already launched units rather than opening new projects as financial institutions had stricter rules. Most new launches were from large developers,'' said Mr Mayta.

The take-up rate last year was 70-80%, which was solid but still down when compared to the levels in 2005-06. Some projects sold out within a few months, while some needed four to five months to sell 80-90% of the units.

According to Plus Property's research, 119 new condominium projects were launched last year in Bangkok with 39,341 units, up 42% from 2006. About 17,000 units from 61 projects were launched in the first half, while around 22,000 units from 58 projects were launched in the second half.

The figures indicated that newly launched projects in the second half had more units in each site, but smaller unit sizes as developers tried to offer lower-priced units to match lower purchasing power, said Mr Mayta. Some projects sold for 600,000 baht a unit, or as low as 20,000 baht per square metre. About 70% of launches this year would be condominiums, as sales depend on confidence in the economy, interest rates and living expenses.

Last year the top zone for new launches was the Thon Buri area, where the new BTS extension is under construction. It was followed by Ratchada-Lat Phrao, Phahon Yothin, Sukhumvit and the central business district, respectively. All are close to mass-transit lines.

Plus Property, a subsidiary of the listed developer Sansiri Plc, plans to launch at least 10 projects worth a combined four billion baht this year. They would comprise five townhouse projects and five condominium projects. Last year the company acquired four land plots for new projects, some of which will be located on Phahon Yothin Road near the BTS, Mr Mayta said. It also planned to spend two billion baht to buy more plots.
The new launches this year would include new townhouse brand Home+ to tap the lower-end segment as unit prices would start at 2.5 million baht. It will launch a new townhouse brand for a higher segment than Town+, as well as a new condo brand that would appeal to richer customers than My Condo.

Currently, the company has three housing brands: Town+ for townhouses priced between 2.8 million and three million baht a unit; My Condo and Condo One with prices starting at 50,000 baht a square metre; and sub-brand Condo One X tapping the lower-end segment. Due to higher construction costs, which are expected to increase about 6-8%, condominium developers should shift to pre-fabrication and precast construction technology to reduce construction time by 10% and save overall costs.

Mr Mayta said prefabrication would be used in building structures, while precast would be used for walls. These methods, which cost 10-15% more than conventional methods, would help speed up completion and reduce the reliance on labour, as construction workers are in short supply and wages are rising.
Bangkok Post

Hip, green condo (Bangkok)

Hip, green condo slated for Sukhumvit D-well Development Co plans to market a condominium near mass-transit lines this year by focusing on designs to differentiate itself from rivals, according to managing director Thavanan Tanesdechsundhara. He said the new project, to be located on Sukhumvit Road, would be in a unique hip, green style, make it different from the minimalist style of its first project. ''We will focus on design-base project development with affordable prices.

We will not sell the condominium but the lifestyle and good community,'' he said, adding that the company's concept for project development focused on serenity, convenience and design. ''Condominium demand remains strong due to a trend of urbanization.
Many people still wants to live in the city but the cost concern is a major factor to think about when deciding to buy a unit in the city,'' he said. Last month, the company launched sales of its white building, the second phase of the D'65 condominium with 112 units worth 300 million baht. To date, it has sold 30 units and the company expects to close sales by the second quarter of 2008. From the customer's feedback in the first phase, larger units are in demand.

The second phase will house duplexes sized 70 square metres each. Young couples are target customers, he adds. ''Competitors' projects in the area are mostly located on the main road but with many more units. This turns to be our strength, as some customers don't want to live in a large community but need privacy,'' said Mr Thavanan, a 31- year-old lecturer in urban design at Thammasat University.

D'65, which comprises one black building and one white one, will be located on a 2.5-rai site on Soi Sukhumvit 65 where Mr Thavanan's house was formerly located. Unit sizes will be between 35 and 110 sq m, with prices of about 57,000 baht per sq m on average or 1.9 million to 7.2 million baht.

D-well was set up last year with registered capital of 120 million baht. In July 2007, it launched sales of the black building, with 78 units worth 200 million baht, all of which were sold out. Construction of the black building will be completed by the end of next year while the white one will be finished by the first half of 2009. Muang Thai Life Assurance is the financier of the project.
Bangkok Post

Condo Investment (Bangkok)

With the political and economic climate looking more hopeful after the successful completion of the election, more foreign investment funds are expected to flow into Thailand, which will have a healthy knock-on effect for companies such as Grande Asset Development Plc.

The SET-listed hotel and condominium developer recently closed a 10.4- billion-baht financing package with an affiliate of the US investment bank Lehman Brothers. "That will probably be the most significant such transaction in quite some time," said Markland Blaiklock, Grande Asset's chief executive officer.

Previously Grande Asset's financing involved multiple financial institutions with varying terms.
The new consolidated three-year package represents a more efficient and cost-effective arrangement with a single institution.

Mr Blaiklock is confident that more offshore financing will flow in once an elected government takes the helm.
"With a different sentiment toward foreign investment, I think we can expect a lot more interest." he said. "The interest has always been there but as long as there is uncertainty relative to what you are getting into, that will cause investors to be cautious, and at the same time there are so many opportunities even within this region."
Grande Asset is counting on both large- and small-scale foreign investment picking up.
While it awaits fresh developments, it has stopped selling the remaining condominium units at The Regent Hotel and Residences, between Sukhumvit sois 11 and 13 and due for completion in 2009, and The Sails beachfront condominium in Pattaya.

There are two reasons for the decision, explains Mr Blaiklock. "One, to allow the construction process to move forward, and toward the completion of those projects it's deemed to be a better time to sell the remaining units. In addition, we feel that the market condition, certainly following the election, following different sentiment toward foreign investment, would create a better market."

While he admitted that the US sub-prime problem has led to a tightening of credit in general terms leading to reduced flows of money, it is expected to be a relatively short-term situation with less impact on places like Thailand.
Having been in Asia for 18 years and now more Asian than Canadian, Mr Blaiklock sees many positives for Thailand, notably its popularity as a tourist destination, good location, interesting culture and very service-oriented people.

All this helps the hotel market and Grande Asset. Aside from The Regent Bangkok now under construction, the company owns the Westin Grande Sukhumvit and the Sheraton Hua Hin Resort. Another hotel, the Crowne Plaza Sukhumvit, is due to be completed in 2009.

"You know, there have been different things that have been happening in recent years, we had the catastrophe in New York, 9/11, we had the Sars outbreak in 2003, and then we had at the end of 2004 and also affecting 2005 the tsunami - through all those events and even political change, Thailand has managed to maintain reasonable growth statistics, certainly on a cumulative basis, so that speaks more of the hotel situation.
"We are very bullish for the year ahead, following the election, following the establishment of greater confidence in the destination. In 2007 what was mostly been missing was corporate activity and also corporate meetings, and for hotels in Bangkok that is a big part of their bread and butter."

Overall Mr Blaiklock sees this as a good time to invest in condominiums though there might be a slight oversupply that will be absorbed over time. "Is now a good time to buy? I think it is because the market is a little bit soft right now and we have new supply coming in constantly, it is a good opportunity to make an investment at this point."

At The Regent Bangkok Hotel and Residences, the company's last realised price was about 120,000 baht a square metre and it sees an opportunity to reach 140,000 baht this year.
One pending development in Bangkok is targeting 200,000 baht a square metre, which in the
regional context is not an unrealistic figure, he says. "Certainly this market is commanding much higher prices than it did historically but it still remains very competitive with other major gateway cities in the region. If you compare with Singapore, it has gone through tremendous increases in the last 12-18 months, and Hong
Kong and Tokyo, the major gateway cities in the region, are all significantly higher."
Bangkok Post (January11, 2008)

Israeli firms eye Vietnam RE

Singapore´s Pacific Star Group and Israel´s Alony Hetz have signed an agreement to set up a fund investing in Vietnamese real estate. The two companies expect to raise US$200 million from
institutional investors by July this year.

Under the deal, Pacific Star and Alony Hetz will both manage the fund through a joint venture company that has yet to be established. The overall outlook of the Vietnamese property market
remains bright owing to the accelerated economic growth in the country, said Nathan Hetz, founder and chief executive officer of Alony Hetz.

Alony Hetz, one of Israel´s largest real estate holdings, recently invested US$40 million in a fund in India. The company hopes Pacific Star will be an excellent partner for its entry into Asia.
by Asia Pulse

India’s to thrive in ’08

India´s industry body Assocham said the year 2007 saw a growth of 30-35 per cent and 40-45 per cent in retail and real estate sectors respectively and predicts this boom will continue in 2008.

According to a report by Assocham, organised and unorganised retail sizes in 2007 has been estimated at US$300 billion which is likely to grow to US$365 billion in 2008 and will further reach the size of US$440 billion by 2010. "Out of (India´s) retail industry, worth over US$300 billion, the organised retail segment is less than 5 per cent which works out to be slightly more than US$16 billion," said Assocham President Venugopal Dhoot.

In the year, the retail sector ended up with a growth of 25-28 per cent whereas the real estate industry saw a growth of 35-38 per cent, said the report. As per the estimates made by Assocham, the organised retail segment should witness an additional investment of US$25-28 billion by 2008 and in 2010 the investment size would be around US$70 billion.

Organised retailers occupied a space of one million sq ft in 2002, which shot up to nearly 14 million sq ft in 2007. "In 2008, the space occupation in the organised retail sector is likely to be 16 million sq ft as retailers like Reliance, Plaza, DLF and even Aditya Birla Group will witness their major expansion drives in the retail sector," said Mr Dhoot.

With respect to the real estate sector, the market-size is estimated at US$15 billion which has been growing at a pace of 35-38 per cent in the last couple of years and is likely to touch US$90 billion by 2015. As a result, huge investments are coming into the sector.
by Asia Pulse