Japan invest Bt7.6 billion in Thailand.

SIAM ZOKAI GETS AGGRESSIVE ON EXPANSION PLAN

Thailand continues to be a key market as the firm designs an overseas foray

Siam Zokai, the property arm of Saha Group, has set aside an investment budget of about Bt5 billion for the development of property projects worth Bt7.6 billion in Bangkok, Phuket and Chiang Mai till 2010, the company’s Japanese president Yasuo Miyazaki said.

Siam Zokai is a joint venture between Saha Group which holds a 51- per- cent stake while Yasuo Miyazaki and his wife own the other 49 per cent. The company has a registered capital of Bt100 million.

The company is developing two property projects worth about Bt3.4 billion. Peaks Town, the first project in Chiang Mai, is worth nearly Bt1 billion. It will have six buildings including Twin Peaks, Peaks Garden, Peaks Changklan, Peaks Avenue, Peaks Mall and Peaks Market. This project is being developed under the community- living concept which integrates residential units and a shopping plaza in the same location.

Construction at Twin Peaks is complete and the building is sold out. The company expects to transfer the units to its customer this year.

The other buildings have also been sold up to 70 per cent and the rest is expected to be lapped up by customers within the year.

Grand Peaks, the company’s second project is worth Bt2.4 billion and is located in the Sriracha district, Chonburi. It is a luxury-condominium project with a 31- storey building and 570 units. Prices start at Bt65,000 per square metre – an increase from last year’s price of Bt60,000 per square metre consequent to construction costs rising. About 200 units have been sold. The project is under construction and is expected to be completed by the middle of next year.

Miyazaki said the company plans to develop three more projects with a cumulative value of Bt4.6 billion in 2010, after the existing projects are completed and sold off.

These three projects include; Peaks Andaman in Phuket worth Bt1.4 billion; North Park Office, an office building worth Bt1.2 billion located at North Park on Vibhawadee Rangsit Road; and Sathupadit Peaks Tower, another luxury-condominium project with a 31- storey building worth Bt2 billion.

The company is studying the market with a view to develop an integrated complex with luxury condominiums, a shopping centre and an office building in the same area with a combined utilisation space of up to 100,000 square metres. The project is likely to be in Bangkok’s Central Business District.

“We cannot give more information about the location of the new project but it will be developed on land already owned by Saha Group. This project may have another Japanese partner. This part is under negotiation,” he said.

The company will also start expansion in the overseas market in the next two to three years with a special focus on Malaysia and Vietnam. Malaysia is helped by a flexible law onforeign investments in the property business.

“Malaysia holds higher for us over Vietnam, where competition and land prices have surged,” he said.

Thailand remains the main market for Siam Zokai’s expansion plans. This is because it believes that demand for residential projects in the country remains strong.

Koolpuntville eyes bangkok condo market

LUXURY HOUSING

Chiang Mai property developer Koolpuntville Group this year plans to launch its second new residential project in Bangkok, worth up to Bt1 billion. The developer has already completed its first residential project, Belgravia Residences, worth Bt1.7 billion and has made sales amounting to 60 per cent of the project value.

Koolpuntville Group president Sompak Trakarnkoolpunt said the new residential project would be a luxury condominium located on Rama III Road. The building will rise to either 18 or 19 floors and prices will range from Bt85,000 to Bt90,000 per square metre.

"We have continued to expand our investment in Bangkok because we see strong demand for residential projects, especially luxury condominiums. Now we are considering whether to invest ourselves or with a partner. That will be finalised in the second half of this year," Sampak said.

Earlier, the developer set up a joint-venture firm, Pakporn, with UK-based First Oriental Investment, a subsidiary of Libra Holding, with a registered capital of Bt200 million to develop Belgravia Residences.

The luxury Belgravia Residences on Sukhumvit Soi 30/1 offers 48 luxury-condominium units starting at Bt38 million each.

"Demand for luxury residences at Sukhumvit Soi 30/1 has shown strong growth and we have adjusted the selling price from Bt127,000 to Bt135,000 per square metre. That drives our project value from Bt1.7 billion to Bt2 billion," Sompak said.

He added that the company believed that the rest of the total project value would be recovered in the second half of the year.

The Koolpuntville Group was established by Pramarn Chansue in 1987. It is now the largest property developer in Chiang Mai, with 12 residential projects worth up to Bt20 billion. It also has a land bank of 2,000 rai in Chiang Mai, Chiang Rai and Lampang. The group announced sales of Bt1.3 billion last year and expects Bt1.2 billion this year.

At present, the company has two property projects in Chiang Mai and plans to launch three new residential projects worth Bt1.1 billion in Chiang Mai, Chiang Rai and Lampang next year.

By Property Reporters
The Nation
Published on May 12, 2008

Chiang Mai property boom

After slowing down for a year, the Chiang Mai property market is expected to revive this year under the new government led by the People Power Party, according to Jarin Pongyen, senior vice-president of the listed developper Quality Houses Plc (QH).

''People in Chiang Mai are very sensitive to the political situation. They spent less and saved more since the political situation was uncertain (last year) despite having high purchasing power,'' he said yesterday. ''They are ready to spend again if they are more confident in the political situation which is clearer now.''

Mr Jarin said total savings in Chiang Mai rose from 94 billion baht in 2005 to 103 billion last year but a decline in spending was reflected in lower value-added tax collections and car and motorcycle registrations.

The number of transactions registered at the Chiang Mai Land Office declined from 15,000 in 2005 to 10,000 in 2006 and 9,800 last year. Revenue generated from property transactions dropped from 1.3 billion baht in 2005 to 1.2 billion in 2006 and 900 million baht last year.

The sharpest decline was in housing units priced below two million baht, representing 80% of the total market.

''People in Chiang Mai delayed their decisions. Last year small and medium-scale developers faced lower sales below 50% [of units available] compared with the normal period when they generated sales of up to 70-80%,'' said Mr Jarin, a Chiang Mai-born executive who oversees QH's business in the North.

However, housing priced above two million baht a unit, with about 20 projects on sale, remained strong. Total sales in this segment grew from 1.8 billion baht in 2006 to 1.9 billion last year.

In Chiang Mai, he said, most residential development is in the eastern part of the province in the San Sai, San Kamphaeng and Doi Saket areas.

QH plans to develop high-priced housing units under its Laddarom brand next year on a 60-rai site on the Middle Ring Road, after its Laddarom Elegance is expected to close sales by the end of the year. It also has another two plots of land _ 80 rai on the Outer Ring Road and 90 rai on the Middle Ring Road _ for future development.

QH last year recorded sales of 600 million baht, double its 2006 total, from the existing three projects including 300 million baht from Vararom Kaewnawarat and Vararom Charoen Muang and 300 million from Laddarom Elegance.

Mr Jarin said QH expected total sales of 700 million baht from housing in Chiang Mai this year. Currently, QH and its parent, Land & Houses Plc, have a combined 60% share of Chiang Mai housing priced above two million baht.

QH shares closed yesterday on the SET at 2.34 baht, up 20 satang.

KANANA KATHARANGSIPORN