Canapaya Residence (Bangkok)

CBRE is pleased to introduce CANAPAYA RESIDENCES, the latest and one of the tallest buildings of all the riverside projects with exclusive private access to yacht pier, situated on the riverside of Rama III Road within easy reach of CBD.

CANAPAYA RESIDENCES is a luxury riverfront condominium in a mixed-use development, comprising a high-rise condominium, a 20,000-square meter urban fusion lifestyle retail space, a marina, and an international 5 star hotel. CANAPAYA IS DESTINED TO BECOME THE LANDMARK AND BANGKOK'S DEFINITIVE RIVERFRONT DESTINATION.

The residential tower will stand 57-storey tall with 224 units ranging from 1 to 3 bedrooms, duplex and penthouse. Every unit has been designed to benefit from Chao Phraya River views with efficient layouts and have the finest specifications with 3-metre high ceilings.

CANAPAYA RESIDENCES is now opened for early bird booking at special PRE-SALES PRICE at CBRE ELITE LIVING 2013 on 26 April – 6 May 2013, on the 1^st floor, Fashion hall, Siam Paragon. For more information and to RSVP, please contact our sales representative at +66 89-483-4444 or send an email to canapaya@cbre.co.th

 Skyscrapercity

Reflection - Pattaya

http://orp.co.th/index.php/our-projects/reflection

Reflection is THE first oceanfront super luxury high rise residence in Pattaya located on the quiet Jomtien Beach and only 10 minutes from down town Pattaya. This 55 story 2 tower development offers 180 ocean view units with even private elevators for the larger units and a private sky garden for every duplex unit. With outstanding facilities which includes 5 different pools, tennis courts, putting green and fitness center and last but not least underground parking and open lobby, makes this an developments which stands out from all and everything else.

Raimon Land doubles prices - B300,000 per sq m

High costs push tag to B300,000 per sq m
Raimon Land plans to double the prices of its new luxury condominium to 300,000 baht per square
metre in line with rising production costs, according to chief executive Nigel Cornick.
Construction costs alone have gone up by 20% to about 90,000 baht per square metre, and the
company said it may raise prices of its future projects, starting with the 185 Rajadamri condominium on
Rajadamri Road set to launch by year-end.
Prices of 185 Rajadamri were earlier expected to start at 150,000 baht per sq m. Mr Cornick said he
was not concerned that the price increase would affect sales as most of its projects targeted highend
customers who were less pricesensitive.
It has already increased prices for The River, located on the bank of the Chao Phraya River, to
140,000 baht per sq m from 90,000 baht.
The company expects to realise revenue of two billion baht this year primarily from its previous
projects, with a nine-billion-baht sales backlog carried over from last year.
Raimon Land has two condominiums under construction: the 4.8-billion-baht Northpoint in Pattaya
and the 13-billionbaht project The River, its largest to date. They are are due to finish in 2010 and 2011
respectively.
Raimon Land has secured a fivebillion-baht project loan for the construction of The River, according
to its statement. The loan is a syndicated facility provided by Standard Chartered Bank (Thai) as the lead
lender, TMB Bank and Siam City Bank.
The company now has completed six new properties with a total sales value of six billion baht. Four of
those are in Bangkok under three brands: The Lofts, The Lakes and The Legend. The other two are
Northshore in Pattaya and Kata Gardens in Phuket.
Four projects to be launched this year include 185 Rajadamri in Bangkok, Amalfi in Phuket, The Lofts
Soutshore and Edge in Pattaya. Their combined value would be at least 22.15 billion baht.
It expects to invest 1.3 billion baht in joint-venture projects in Bangkok, Phuket and Pattaya this
year.
As of its earlier plan to raise its registered capital by 1.37 billion shares last month to support its
future projects, Raimon Land is looking to offer its 770 million shares to Thai partners as the Foreign
Business Act restricts foreigners from owning more than a 49% share. The remaining shares would be
offered to its major shareholder IFA Hotels & Resorts of the United Arab Emirates.
The company has been in talks with Thai buyers, especially funds and institutions.
In order to expand into the mass market, Raimon Land yesterday announced a new marketing
strategy to sponsor the reality TV show Superstar, produced by Orchestra Investor Group Co with a
budget of 120 million baht.
It will feature the lives of 14 stars living together in Raimon Land’s The Lofts Yennakart on Sathorn
Road. The show is scheduled to air between Aug 9 and Oct 25 on Channel 9.
‘‘It’s an opportunity to grow our brand as there seem to be a lot of people that don’t know about our
projects,’’ Mr Cornick said.
The show would target young people who could be potential customers of Raimon Land.
Shares of Raimon Land closed on Monday on the Stock Exchange of Thailand at 0.69 baht, down four
satang, in trade worth 270,000 baht.

Condominiums to get costlier in second half

Firms now see construction expenses stabilising, will factor them into projects

developers are planning to launch Bt50 billion worth of city-condominium projects in the second half. But home-buyers will have to shell out more money, because many firms have hammered in the rise in raw-material costs while pricing new projects.

With construction costs expected to stabilise in the second half of the year, developers are planning to launch city-condominium projects worth Bt50 billion during that period.

However, home-buyers will have to shell out more, because many developers have factored in the rise in raw-material costs while pricing new projects.

Many companies, including Plus Property, Sansiri, Property Perfect, Asian Property Development, LPN Development and Chaopraya Mahanakorn, delayed the launch of projects in the first half in the face of rising construction costs.

Property Perfect put off launching of six residential projects worth Bt18.3 billion until the second half, said chief operating officer Teerachon Manomaiphibul. Two of the six projects, Metro Par Ratchada and Metro Park Sukhumvit, are condominiums. The projects are worth Bt4 billion each.

"We delayed launching new city-condominium projects in the first half because we could not estimate how far the construction costs would climb and so could not decide prices for projects. Raw-material prices have seen a rapid rise since last year up through the first half. But we believe the prices will be stable [in the second half]. So we'll launch two city-condominium projects worth a combined Bt8 billion. We've factored in the rise in construction costs while setting prices for the new projects," he said.

LPN Development managing director Opas Sripayak said the company planned to launch four new city-condominium projects under the Lumpini Condo Town brand. The projects, worth about Bt8billion, will target the lower-income group by offering homes at prices under Bt1 million.

"The successful launch of Lumpini Place Rama IX-Ratchada last month boosted confidence in our business-expansion plans for the second half of the year," he said.

Asian Property Development senior executive vice president Visanu Suchatlumpong said his company planned to launch five new city-condominium projects worth a combined Bt10.5 billion in the second half.

They are the Bt800-million The Address on Phya Thai Road, the Bt3.2-billion Life@MRT Ratchada, the Bt1.6-billion Life@Ratchada-Huai Khwang and two projects worth Bt4.9 billion each in Sathorn Soi 12 and Sukhumvit Soi 28.

The company has revised prices 10-14 per cent for the new projects. The average price has risen from Bt70,000 a square metre to between Bt80,000 and Bt90,000, depending on the project's location, Visanu said.

"We've had to raise prices for new projects, in order to offset the rise in construction costs," he said.

Sansiri subsidiary Plus Property also plans to launch six new city-condominium projects worth a combined Bt10 billion in the second half.

Plus Property CEO Mayta Chanchamcharat said his company had delayed the city-condominium projects, because it wanted raw-material prices to stabilise before hammering in the rise in construction costs into new projects.

The company will launch the six projects under the My Condo label but with revised prices. The average prices will rise from Bt1.1 million to between Bt1.9 million and Bt2.1 million.

At a glance

n Property Perfect will launch two city-condominium projects after factoring in rise in costs.

n Asian Property Development has revised prices 10-14 per cent.

n Plus Property has hiked average prices from Bt1.1 million to between Bt1.9 million and Bt2.1 million.

By Somluck Srimalee
The Nation
Published on July 1, 2008

Now's the time to sell condos

Oversupply could push prices downward

Anyone thinking of selling a condominium should do so soon because prices are likely to drop in six to 12 months due to political uncertainty and oversupply, says Ian Soo, managing director of Hamptons Property.

Prices have already stabilised and as more units come on the market, they may be pushed down.

"I think there is an oversupply of units in central Bangkok and I think if you combine that with some sort of political uncertainty then what you will find is less demand," said Mr Soo. "This is effectively going to put pressure on prices."

He said that the downward price pressure was unlikely to be very pronounced in the 1-3 million baht condominium or townhouse segment. "I think the high end of the market will have some stock that will be harder to sell now, so it's more likely to affect the luxury end of the market."

As a lot of the property that was launched a few years ago is now coming on the market, developers will watch how sales pan out over the next six to 12 months. They are in a difficult position because of rising costs, but that does not mean they are going to be able to pass these on to the buyers.

"They can do that when the economy is strong and there is easy credit but not when the economy is stagnant," said Mr Soo.

While this raises fears that lower-quality buildings might be built, Mr Soo does not expect established companies to cut corners but will have to absorb some or all of the costs.

Whether lower prices could turn into a buying opportunity depends on what sorts of units come on the market, in Mr Soo's vie.w

And while sellers would get higher prices if they sell today, he said those who have money to spare are always going to be looking for investments, and property with rental yields of around 6% is not a bad place to park money. "But I think people are being a little bit cautious in this type of environment."

Some expatriate buyers too are holding back, though he says those who have money to invest are still active in the market.

The bright spot is in the rental market, which is unlikely to be affected by the anticipated price drop. But greater choice could lead to better-value units becoming available.

Demand right now is mostly for high-quality one- to two-bedroom units, even though the space is smaller. "There will always be people who will want 300 to 400 square metres, perhaps in an older building further away from the skytrain, but the majority of working professionals living here ... prefer smaller, more modern units."

Hamptons' clients, he says, prefer Sukhumvit as far as Ekamai, plus Silom and Sathon, and these are expected see both rental and buying demand.

Mr Soo said the real estate slowdown was widespread right now, but has not been as serious as in the UK and US because there are more cash buyers in Thailand, which has insulated the country from the credit crisis.

While many think it is good to buy during turbulent times, he said that a lot of people should keep their assets in cash if they are not sure what the situation will be like in a few months.

Although those who bought property during the 1997 meltdown did earn a big profit, this is seems easy in hindsight. "The economic crash of 1997 was huge, very sudden. This economic slowdown is not as dramatic."

Mr Soo urged the government to allow foreigners to get mortgages in Thailand. "They represent a very important part of the property market and expecting them to pay cash or not giving them financial support, something that they should do, is a mistake I think. Not all foreigners are really so rich that they can buy in cash."

NINA SUEBSUKCHAROEN

Developers adjust to cooling of condo fever

The condominium market that began heating up a few years ago is likely to start cooling down and reach a balance point as developers are more cautious about launching new projects when building material costs are volatile. At the same time, prospective buyers of condominiums may hesitate because of concern about higher costs of living and a decrease in their ability to afford new homes.

In fact, higher oil prices had been the factor creating strong demand for the condominium market as people were concerned about travelling expenses. Special interest was shown in those units near mass-transit routes and their planned extension lines.

According to a survey by Agency for Real Estate Affairs (AREA), the average sales rate of condominiums in six major locations _ Ratchada/Lat Phrao/Ratchayothin, Phloen Chit/Sukhumvit/Ekamai, Onnuj/Baring, Silom/Rama III, the western bank of the Chao Phraya River and Bangkok's outskirts _ rose by 40% in 2007 compared to 2006.

However, the average sales rate dropped by 7% in the first quarter of 2008 to 9,247 units from 9,895 in the same period last year.

The only two locations to enjoy an increase in sales were Sukhumvit and the western bank of the Chao Phraya River, up by 33% and 20% respectively.

The highest decrease in sales was in Ratchadaphisek with 46%, followed by Silom/Rama III with 43% and the outskirts by 0.1%, showing a significant downward trend in the condominium market.

Opas Sripayak, managing director of the low-priced condominium leader L.P.N. Development Plc, said the number of new condominiums launched in the first quarter of the year decreased compared to the same period last year.

''Some developers were not confident as volatile prices of steel and rising construction costs pushed unit prices higher while purchasing power was reduced because of inflation,'' he said.

Many developers shifted to develop more low-rise units as supply was limited and they expected single houses and townhouses would be more interesting to homebuyers while tax incentives lasted.

''Everything is becoming more expensive,'' Mr Opas said. ''Low-priced condominiums will be popular during a time of weak purchasing power.''

Teerachon Manomaiphibul, chief operating officer of the listed developer Property Perfect Plc, said higher construction costs were largely being driven by the doubling of steel prices and skyrocketing oil prices since last year.

As a result, construction costs for a condominium building that consumes a lot of steel have risen by at least 30% for construction of less than eight storeys and 35% for more than eight storeys.

Meanwhile, saleable area in a condominium building also has been reduced as stricter rules about environmental concerns require additional utilities in a high-rise residential building.

''Rising construction costs have forced many condominium developers to break their project plans. There will be no more projects at 30,000 to 40,000 baht a square metre,'' Mr Teerachon said. As condominium prices soar, townhouses in the same location might be an alternative.

''Though a condominium project may be sold out, if construction doesn't start or the financial status is not strong, developers may face lower margins and delays in unit transfers,'' he said.

Condo Focus (May 08)

Click the image to download the report

Tourism Condo Thailand

The tourism industry continues as the main driver behind interest in Thailand’s resort condominiums, with holiday destinations close to Bangkok receiving the most attention, especially from international buyers lured by attractive prices.

Thailand’s seaside resorts; namely, Pattaya, Phuket, Koh Samui and Hua Hin, where more than 30% of the country’s luxury condominium inventory is now located, have experienced 9.5% annual growth in international arrivals since 2003, and these strong figures are supporting resort property expansion.

A surge in condominium launches during the second half of 2007 reversed a slowdown that began in mid-2006 and propelled the year-end tally to 2,415 new units. Of these, 67% were located in Pattaya, 26% in Hua Hin, 4% in Phuket and 3% on Koh Samui.

Pattaya’s strong performance was boosted by impressive economic expansion along the eastern seaboard and its proximity to Bangkok and the new Suvarnabhumi Airport.

Luxury condominium launches in Pattaya are trending towards both inland projects with sea views and those with beachfront locations, a reflection of buyers seeking affordable properties regardless of whether or not they have direct beachfront access.

Located three hours southwest of Bangkok, Hua Hin remains attractive due to its relaxing atmosphere, more affordable prices, appeal to Thai buyers and faster development completion schedules. Hua Hin sprang back to life in 2007, with the introduction of 640 units from prominent Bangkok developers, many of whom are launching new projects this year.

Lacklustre demand in Phuket and Koh Samui was linked to hesitant developers baulking at external factors such as currency exchange rates and possible amendments in the Foreign Business Act to make residential property rights more restrictive for non-Thais.

Should the government’s policies on foreign ownership change to allow a higher percentage of foreign ownership, developers will likely introduce more projects in Phuket and Koh Samui to satisfy international demand.

In spite of the deceleration in the rate of new resort development launches in 2007, combined sales value leaped 12% year-on-year to 17 billion baht on the take-up of 1,789 condominium units.

Pattaya’s luxury condominiums sold 544 units worth 6.6 billion baht in 2007, compared to 1,609 launched, for an average of 12.3 million baht.

Hua Hin captured 6.3 billion baht on the sales of 979 units, averaging 6.4 million baht. These projects received strong interest from local investors leading to a majority of the 640 newly launched units being sold.



Limited supply on Koh Samui led to low sales last year, with only 52 units selling for an average of 15.6 million baht. The purchase of 214 units in Phuket generated 3.2 billion baht for an average price of 14.8 million baht.

The average price per square metre (psm) in Pattaya climbed 10% over 2006 to 96,332 baht psm, the highest among all resort areas, followed closely by Phuket at 95,181 baht. Samui units averaged 87,420 baht while those in Hua Hin jumped 14.6% to 72,063 baht.

Of the total resort condo sales in 2007, 27% of the units sold were priced over 100,000 baht psm, and 21% between 80,000 and 100,000 baht psm. Units in the 60,000 to 80,000 baht psm range commanded 29% while those under 60,000 baht made up 23% of the total.

It should be noted that very few of the beachfront or seaview developments are now priced under 100,000 baht psm, and sales at the top 10 most exclusive projects averaged 123,715 baht in 2007.

Of all developments launched since 2003, 1,814 units or 23% were completed as of December last year. Of the remaining 6,177 units, 3,632 were still under construction and 2,545 units were in the planning stages.

These figures demonstrate that there is still very little supply in completed condominiums, as well as a limited number of completed projects in Thailand’s resort locations.

This situation has lifted resale prices, allowing developers to increase the prices of units in new projects while opening the door for investors seeking impressive short-term capital gains.

Foreign buyers accounted a significant portion of condominium purchases in Thailand’s resort areas in 2007, though the most active markets have changed.

Russians rose from outside the Top 10 to head Raimon Land’s 2007 buyer chart, followed by Thais, British and Australians. Germany and China also moved higher while the US and Swedish markets started to slide.

Russians, Thais and British lead Pattaya’s property market, and Phuket is commanded by Russians, British and Australians. Hua Hin remains a predominantly Thai destination, with emerging international interest now making up 20-30% of acquisitions.

In 2008, look for more players and new groups of buyers in Pattaya, with limited completed stock driving up prices. Hua Hin will continue to exhibit strong local demand, with prices increasing in both resale and off-plan projects.

Phuket and Samui will remain vulnerable to external factors. New supply in Phuket will push demand, and look for new areas on the mainland adjacent to the island, now being referred to as Greater Phuket, to open up. Koh Samui will remain a niche market leaning toward branded real estate.

Sixteen city-condominium projects in Victory

Offices, Sky Train boost the area’s appeal for homebuyers, investors

Sixteen city-condominium projects, valued at about Bt16 billion, are expected to be launched in the vicinity of the Victory Monument. Most of these projects have sold 30 per cent to 100 per cent within three to six months of opening for booking.

According to a survey conducted by The Nation, these projects are targeted toward the middle- to upperincome segment of the market with prices starting between Bt48,500 per square metre and Bt100,000 per square metre.

The main locations include Phahonyothin Road from Soi 2 till Soi 18, Phayathai Road, Sri Ayudhya Road, Ratchapralop Road and Petchaburi Road.

Resale prices for city condominiums in this area have risen between 10 per cent and 20 per cent this year compared to last year.

Harrison chief executive Alan Lin said that when developers raise prices 10 per cent to 15 per cent of new residential projects to adjust for higher raw- material costs, resale prices of existing residential units will also rise 10 per cent to 20 per cent, depending on the location.

City condominiums located close to the inner Central Business District, in areas such as the Victory Monument, will also witness a significant rise from an average of Bt60,000 per square metre to about Bt80,000 per square metre, Lin said.

According to research conducted by Harrison, a local property consultant, the demand for residential projects around the Victory Monument has risen because this area has many offices and is located close to the mass-transit system.

However, there is limited availability of land for residential projects for sale around the Victory Monument. This is because most land owners have used the land to develop serviced apartments.

The research said population in the Ratchathivi district stood at 97,416 while the residential register recorded 33,769 units, as of January.

Other locations close to the Ratchathivi district, such as the Phayathai district, the Pathumwan district, the Hua Kwan district and Dusit district recorded a population of 332,538 while the residential register showed 125,647 units.

After analysing these figures, Harrison believes that demand for new residential projects in this location will continue to grow, especially for residential units priced between Bt50,000 per square metre and Bt80,000 per square metre.

Last year, the number of completed condominiums in Bangkok stood at 126,071 units, a rise of 21 per cent from 2006’s figures. Of these, 17 per cent were located at Ratchadapisek while another 17 per cent were at Rama III Road. Another 15 per cent were located at Sukhumvit Road, between Soi 70 and Soi 107 and 14 per cent between Soi 1 and Soi 55. A further 9 per cent of the total condominiums were located inside the Central Business District in areas such as Silom, Sathorn, Wireless Road and Pleon Chit. The Thonburi district also had a figure of 9 per cent while Phahonyothin Road had 7 per cent of the total. Phayathai district had 4 per cent of the completed units and the rest of the 8 per cent were located in other areas on the list.

The research also shows that 67,036 city-condominium units are under construction.

It revealed that one- bedroom apartments with a utilisation space between 45 square metres and 55 square metres are the most popular type of city condominiums.

City Resort Development managing director Chaivai Poonlapmongkol said the company believes demand for residential projects in areas close to the Victory Monument and the Sky Train has seen strong growth following the rise in cost of living.

“Buying a property located close to the mass-transit system reduces the transportation costs for homebuyers. People buying properties with an investment focus can also expect good rental income because this location has a number of offices and schools,” he said.

Chaivai said investors can expect a return of 7 per cent to 10 per cent.

• 27 May 2008
• The Nation
• SOMLUCK SRIMALEE THE NATION

Vietnam - Foreigners allowed to buy apartments

HANOI: Vietnam has passed a law allowing certain categories of foreigners to buy apartments beginning in 2009, the first time the communist country has allowed non-citizens to own real estate.

The National Assembly approved the new law on Thursday, with 88% of deputies voting for it, the government said on its official website yesterday..

Foreigners eligible under the law can only buy apartments in developments approved for foreign residency, not houses or land. Ownership will be for a term of 50 years, by which time the foreign owners must sell or transfer the property.

Real estate developers said the law was likely to give a much needed boost to Vietnam’s property markets, which have softened recently after explosive growth in 2007.

‘‘It could have a 20 to 30% impact in terms of rising prices,’’ said William Badger, a manager at Leonidas Management, a subsidiary of the Hong Kongbased real estate company Tung Shing Group.

‘‘Similar laws have been passed in China, Thailand and Malaysia,’’ said Misha Chellam, assistant to the chairman of Hanoi-based developer Vietnam Land. ‘‘Each time in those countries when a law like this was passed, it significantly boosted demand.’’

Those eligible to buy apartments include foreign firms purchasing housing for staff, and four categories of individuals. These include foreigners working at Vietnamese firms, foreigners married to Vietnamese, foreigners with special skills needed by Vietnam’s economy, and foreigners who have been awarded medals or other honours by the government.

It was not immediately clear how much the new law would differ from current law allowing foreigners to obtain 50-year leases on property in Vietnam. Normally in Vietnam, new laws are followed by decrees and circulars clarifying how the law will be implemented, and developers expect that the move from lease to ownership will grant foreigners additional security.

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.

Cash-rich buyers keep luxury real estate market healthy

Cash-rich buyers keep luxury real estate market healthy

The luxury property market is still strong due to healthy demand and high purchasing power, reflected in the fact that fewer than 20% of purchasers seek loans, according to Chatchai Payuhanaveechai, a senior vice-president at Kasikornbank.

Most buyers of luxury units pay cash as they are seeking better returns than from bank deposits in the face of inflation that is hovering around 6%, he said.

Yields on bonds and debentures are also seen as unattractive and stocks are too volatile, while prime real estate can bring rental returns of 5-8% per year.

‘‘You need to know the real estate market and each asset’s liquidity. Choosing a good location is the key,’’ Mr Chatchai said.

Developers of luxury units are offering more than 7,000 units at 24 projects in an exhibition taking place until May 18 at Siam Paragon, while three property brokerage firms are looking for combined sales of 2.75 billion baht.

Aliwassa Pathnadabutr, managing director of the property consultancy CB Richard Ellis (Thailand), said demand in the segment remained healthy.

Unit prices have been increasing at between 7% and 15% a year depending on the project and location, while units at the very top end of the market can fetch nearly 300,000 baht per square metre, she said.

Sixty percent of luxury property buyers are Thais and 40% are foreigners, up from 15-20% in the past, according to CBRE.

‘‘Confidence is a major factor affecting decision-making and demand in this segment,’’ Ms Aliwassa said.

CBRE is selling six projects worth a combined 15 billion baht and hopes the exhibition would generate sales of two billion baht. At a similar event last year, the company generated 800 million baht from five projects.

Harrison, another participating real estate brokerage, expects sales of 600 million baht from eight projects where it has four billion baht worth of units on offer.

Phanom Kanjanathiemthao, managing director of the property agency Knight Frank Chartered (Thailand), said his company was selling three projects worth 10 billion baht and expected to sell 40 to 50 units worth 150 million baht, up from 50 million baht from a single project in the 2007 showcase.

One of the three projects is the 400-unit My Resort condominium worth two billion baht at the Phetchaburi-Asok Junction, being developed by Everland. After a month of pre-sales, 20 units worth 100 million baht have been sold.

‘‘Demand in the high-end segment is strong but prices are up 20-30% due to higher costs of construction and land. Developers needed to increase their marketing budget as sales slowed down last year,’’ Mr Phanom said.

According to the company’s research, average prices of Bangkok condominiums have risen from 65,000 baht per sq m to 82,000 baht in the past year. New condominiums in Hua Hin are fetching 120,000 baht per sq m, up from 85,000 baht, as construction costs are 10-15% higher and land prices in the resort town have risen 20-30%.

Somchao Tantaterdtham, president of the Thai Real Estate Association, said transfers of residential units during the first two months of 2008 increased from the same period last year due to higher confidence among consumers.

Significantly, transactions were up even though new tax incentives approved by the government did not take effect until late March.

Transfers of single houses and townhouses totalled 1,200 units in January and 1,167 in February, up from 903 and 1,150 units respectively in the same two months last year.

Condominium unit transfers totalled 973 units in January and 888 in February, up from 616 and 759 respectively in January and February 2007.

‘‘Risks remain. Higher oil prices affected overall construction costs while steel prices never go down. Under such circumstances, the government should support building the investment atmosphere,’’ Mr Somchao said.

KANANA KATHARANGSIPORN

Fire Sale (Bids Open)

Developer invites bids for assets near mass-transit system

FIRE SALE

Harrison has today opened biding for its assets including undeveloped land, an office building, serviced apartments and apartments – a total of 26 items worth about Bt2.5 billion.

Most of the assets are located close to the mass-transit system in areas such as Sukhumvit, Phahonyothin, Ratchada and Petchburi.

People interested in bidding for the assets can visit the company’s website at www.harrison.co.th

The company also plans to organise the Thailand Investment Property Exhibition this year – part of an effort to promote the resale market, the company’s vice president Kittisak Jampathipphong said. – The Nation

Chanond has sold more than 3,500 units

With Bt5 billion in fresh funds coming from its European partner Primeamerica, a subsidiary of financial giant Prudential, Ananda Development’s CEO Chanond Ruengkritya is in a fix.

He is under pressure to build even more condominiums than the roughly 4,000 units he is now putting on the market.

“We now have seven sites and we plan to buy land to build seven more by year-end,” he said yesterday.

Already the first Bt8 billion injected into Ananda last year has reaped big returns with his Ideo brand projects, which are built close to subway and Skyrain stations in Bangkok.

Chanond has sold more than 3,500 units and already closed sales at three sites: in Lat Phrao Soi 17 and Phaholyothin and Phya Thai roads.

His newest site in Sukhumvit Soi 103 is already 25-per-cent booked. The two-tower project with 1,200 units on a 7- rai plot is expected to be worth Bt2.6 billion when sales close, he said.

“ There is no guarantee building next to a Skytrain station on Sukhumvit Road will draw buyers,” said Aquarius CEO Yongyuth Chaipromprasert, who is behind the design of the Ideo units and a key consultant to Chanond.

“Close to our Sukhumvit site are many other condominium projects, some selling cheaper, but many are just not attracting buyers,” said Yongyuth, who formerly headed Sansiri subsidiary Plus Property.

Chanond said the secret to Ideo’s success was the firm’s ability to produce fully fitted units that start from Bt62,000 a square metre.

“A 24-square-metre studio sells for Bt1.5 million, which is affordable to urban workers,” he said.

Moreover, changing trends among young Thai adults are boosting Ideo’s sales figures.

“Graduates are now telling parents not to buy them a car but an Ideo condominium instead,” said the CEO.

“ We have a resounding appeal with youths, because we are fully supporting the move to fight climate change,” said Chanond.

The developer dislikes car ownership, as it is expensive and robs Thai workers of a large chunk of their savings.

“It is far better for them to buy property, which over time increases in value,” he said.

But the speed at which his projects are selling is stunning even the builder himself.

“I did not expect the 470 units at Ideo Q on Phya Thai to sell out so quickly, being launched just last quarter, “ he said. “Its average floor price was Bt100,000 a square metre.”

The first 300 units in Sukhumvit Soi 103, which offers only studios and one-bedrooms, are also booked.

If buyers own cars, however, the Ideo estates do have ample parking facilities. The company has already obtained approval for five of its projects from the environmental impact assessment ( EIA) board, said Chanond.

“We try to be the most environmentally responsible and energysaving developer in Thailand to comply with all the regulations under the new city administrators,” he added.

Lately, the rules have been strictly enforced, and developers failing to measure up have been forced to chop off high floors that exceeded EIA rules. A number of developers denied EIA approval were also recently forced to return cash deposits to buyers.
ITTHI C TAN THE NATION

Golden era kicks off in Thonglor (BKK)

GOLDEN ERA KICKS OFF IN THONGLOR

Luxury rental segment shows healthy growth with demand from foreigners

PROPERTY REPORTERS THE NATION

Several property developers are spending almost Bt10 billion to develop luxury serviced apartments in Sukhumvit Soi 55 (Soi Thonglor), marking a golden era for Sukhumvit Road’s high-end market.

Research conducted by Colliers International Thailand shows that three new serviced-apartment projects worth almost Bt3 billion will be launched next year in Soi Thonglor. They include 148 units at Eight Thonglor by Pacific Star, 268 units at Somerset Sukhumvit Thonglor and Oakwood Residence Thonglor.

Meanwhile, a Nation survey showed more serviced apartments were under construction and scheduled for completion this year and next.

These include The Alcove Thonglor 5 worth Bt350 million, developed by the Alcove Group and a new building worth up to Bt1 billion developed by Tan Passakornatee, founder of the Oishi Group, owner of the country’s leading brand of greentea beverages.

Alcove Group director Anand Singjirakul said serviced apartments on Sukhumvit Road, especially in the Thonglor area, had great potential for appreciation, due to high demand from foreigners.

The group has already been very successful with its first project, The Alcove Residence Thonglor 23, he said. Driven by this success, the group has kick-started a new Bt350-million serviced- apartment project called The Alcove Thonglor 5, with 46 units.

The project will be completed this year and target foreign nationals, especially Japanese businessmen.

The Alcove Thonglor 5 has 36 units covering 51-67 square metres for rental fees of Bt65,000 to Bt75,000 a month. Ten units covering 80 square metres each have a rental fee of Bt90,000 a month.

Singaporean-based Pacific Star International (Thailand) has introduced its second residential project in Soi Thonglor Soi 8, called Eight Thonglor Residences, a mixed-use building worth Bt4 billion. Condominiums start at Bt100,000 per square metre. Rents for a serviced apartment range from Bt1.5 million to Bt3.5 million a month. The project is under development and will be completed by mid-year.

Apart from serviced-apartment projects that are still under construction, the Nation survey found many condominium and serviced-apartment projects available for rent.

Centre Point Thonglor, a servicedapartment project with 156 units on 12 floors, has been available since 2005 on an annual, monthly or daily rental basis.

A studio apartment covering 38 square metres is available for Bt51,000 a month; a one-bedroom apartment covering 68 square metres costs Bt74,000 a month; a one-bedroom apartment covering 80 square metres goes for Bt82,000 a month; a one-bedroom apartment covering 87 square metres is Bt85,000 a month; a two-bedroom apartment covering 131 square metres is available for Bt115,000 a month; and a two-bedroom executive suite covering 142 square metres costs Bt120,000 a month.

Most condominiums and serviced apartments in Soi Thonglor are available for more than Bt10,000 a month, with only a few available for less.

Phuket’s property market

Opportunities await

Phuket property market has prevailed amid political drift and cautious optimism persists, reports Nina Suebsukcharoen

Not many people want to admit it, but two years of political turmoil have hurt Phuket’s property market, with a lot of money that could have flowed into Thailand going to Vietnam, Malaysia and Bali.

This is especially important to keep in mind as signs of political unrest begin to surface once again.

Tom Travers, managing partner of Indigo Real Estate company, said that while Thailand did see investment during the two-year period, it lost opportunities.

‘‘Bali is busy and as popular as it was before the (year of the) bombing, and the market is very hot,’’ he said.

However, the troubled times did not affect land prices on the island. Mr Travers said they actually went up by 50%. ‘‘So the market in my opinion has been resilient . . . It’s like a lid has been kept on the market in Thailand as a whole, as prices have not really gone down but have risen very little compared to prices in Hong Kong and Singapore and the other neighbouring countries. The cost of a luxury condominium in Singapore versus Bangkok, depending on whether it’s a branded condo, could be five to 10 times as much per square metre.’’

Fortunately the new government’s economic stimulus package reduces the specific business tax from 3.3% to 0.1% and the transfer fee from 2% to 0.01%. ‘‘We have noticed a difference just in the past eight weeks in inquiries, sales and confidence,’’ Mr Travers said. ‘‘Many buyers are still waiting for more positive news from the new government, but the initial announcement, eliminating the land transfer tax, has really put a very positive light on the government.’’

The resort island has also remained unscathed from the credit crunch in the US. ‘‘It hasn’t affected the ability to buy here, as yet we haven’t felt that, certainly not on any scale,’’ he said.

One reason could be that a lot of expatriate buyers in Phuket are based in Asia; Indigo and other major real estate companies typically have just a few North American clients. Also the US economic downturn is actually hitting middle- and lower-middle income people rather than the very wealthy, who are usually the ones drawn to real estate here.

While foreigners do buy homes in the mid-price to lower bracket in Phuket, most are unable to obtain mortgages. This rules out leverage and keeps speculation out of the market.

‘‘There was nervous money going back a year ago,’’ Mr Travers said. ‘‘[Those in the] mid-range market were concerned about the political instability because that’s their nest egg and if anything happened they would be in financial trouble.’’

Regardless of the political and economic situation, those who yearn for a holiday home on a tropical island continue snapping them up. Mr Travers said the hottest projects on the island at the moment are Jumeirah Resort and Spa, which is on a private island 500 metres off the east coast; Andara, which overlooks Kamala Bay on the west coast; and Istana on Naithon beach, which is near Bangtao beach on the west coast. All have luxury villas for sale.

In addition, he said, Bluepoint condominium is located on a hill and offers stunning views of the developed Patong beach. Bluepoint is causing quite a stir with 12 of 20 units in the small boutique development already sold.

One of the first buyers was a Thai from Bangkok, which is something quite uncommon at the upper-end of the Phuket market. Its uniqueness is not just the views of Patong beach from the approximately two- to three-rai site, but that the design, worked out by Paul Raff Studio in Toronto in conjunction with a local architect firm, is very eco-friendly. It has three eight-metre-high three-floor buildings with grass roofs and and lots of natural shading.

‘‘The walls that wrap around the buildings are all going to be living walls, not just concrete because it will be framed in and covered with vines and plants,’’ he said. ‘‘So when you are looking at it you only see grass and green vegetation. You see very little concrete and steel.’’

Being close to Patong could be a plus or minus depending on one’s personality. It’s the busiest beach in Phuket and receives up to three million people a year.

‘‘One thing about Patong is that it has critical mass, which means there are hundreds of restaurants, hundreds of places to go and eat,’’ Mr Travers said. ‘‘Now they have the Jungceylon Plaza, so they have a modern shopping mall with movie theatres and a bowling alley.’’

Land in and around Patong is more expensive than other areas, costing as much as 30 to 40 million baht a rai. In the east coast it would be around five to seven million baht a rai.

Despite this, there is only a small difference in the price of condominiums. Bluepoint costs 110,000 baht a square metre and those on the east coast about 80,000 to 90,000 baht a square metre.

Mr Travers lamented the lack of a big selection of quality properties for sale in the secondary market because there is demand for them from people who hesitate buying off-plan. Five years ago the island had very few developments, so supply of second-hand villas and condominiums is tight even though many new projects were completed last year.

Sukhothai in the lap of Luxury

Fifty per cent of the units at the Sukhothai Residences luxury condominium project on Sathorn Road have already been sold. The value of the project is Bt5 billion.

The project has been developed by HKR Asia Pacific, a subsidiary of Hong Kong-based HKR International.

The project was launched last year with a starting price of Bt220,000 per square metre for a standard unit and Bt340,000 per sq m for a penthouse.

“We aim to provide a dream home for the discerning few who value luxurious living and appreciate the Sukhothai culture,” Benjamin Cha, director of HKR Asia Pacific, said.

The Sukhothai Residences comprise 187 units, with sizes ranging between 100 sq m and 1,200 sq m, as well as nine unique penthouse units.

The largest of these penthouses, the “Sky Villa”, will have its own 18metre swimming pool, a patio garden and interior designs which the developer describes as “truly exceptional”.

The company expects unprecedented bids for the “villas” and said the units will set a new benchmark in the Bangkok penthouse market.

Rising 41 floors, the Sukhothai Residences will include some of the most modern and aesthetically pleasing facilities.

These include a 50-m swimming pool and floating pavilion, which will house a juice bar, a gymnasium, a yoga and aerobics studio, steam rooms and a sauna. Other attractions include a concierge service, children’s playroom, landscaped gardens, tennis courts and basement car parking, as well as a full suite of management services.

Construction for the project is set to begin this year and development is expected to be completed by 2011.
PROPERTY REPORTER THE NATION

Bangkok score over cities in the Region

In recent years, condominiums have become the highlight of the Bangkok property scene. The cost of commuting and rapidly changing lifestyles of Thais are the driving forces behind the boom, especially in the downtown condominium market.

Condominiums are attractive to not only the young, but are in high demand among the elderly as they choose them over big houses. The availability of a wide range of options in the condo market in Bangkok, in terms of unit sizes and grades, has also made the segment more attractive.

Even though the prices of condominiums have gone up substantially in recent years, investors in the region still consider Bangkok luxury condominiums good value for money.

To take a comparative view, a super-luxury three-bedroom unit in the new Royce Private Residence Sukhumvit, covering 255 square metres, costs between Bt38 million and Bt40 million, while a similarsized unit in Dynasty Court in the mid-levels of Hong Kong costs about Bt250 million.

Meanwhile, a four-bedroom unit at Ritz Carlton Residences in Singapore, covering 284sqm, costs a whopping Bt360 million.

Bangkok offers better value over Ho Chi Minh City.

A 193- sqm home at the Millennium Residence in Bangkok’s Sukhumvit area, a high- rise with panoramic lake views, costs between Bt23 million and Bt25 million, compared to the about Bt32 million that a three- bedroom unit covering 163sqm in District 1 of the Vietnamese capital costs.

Investors with a budget of between Bt13 million and Bt15 million can buy a brand- new luxury two-bedroom condominium covering about 100sqm at the Athenee Residence on Wireless Road or The Met in Sathorn.

In Hong Kong and Singapore, the same amount of money would fetch just a 32-sqm studio.

In Bangkok, older properties are still cheaper and the coverage area larger.

For example, a 260-sqm, threebedroom unit at President Park costs Bt15 million, while a 366-sqm, fourbedroom unit at the Habitat Sukhumvit costs just Bt21 million.

Prices in Bangkok are about the same as in Beijing and Shanghai. Only Jakarta, Manila and Guangzhou offer lower prices.

Many investors may ask whether property prices in Bangkok will match those in Singapore or Hong Kong.

Prices in Bangkok, in most cases, have been driven by an increase in land prices and construction costs.

Bangkok is one of the few cities in Asia where the construction cost per square metre of saleable area is higher than the land cost element.

In the past, the land cost constituted less than 15 per cent of the total development cost.

However, with significant increases in land prices, especially in the city centre, the land cost has now gone up to about 22 per cent to 25 per cent of the overall cost.

In Singapore or Hong Kong, the land-cost element can exceed 60 per cent.

We have seen similar trends in prime residential areas of Bangkok, where there is a large price differential compared to the sutuation in non-prime locations.

Prices of condominiums in prime downtown locations of the city are likely to increase further, but will never catch up with those in Hong Kong and Singapore where there is a severe limitation on prime land for development.

This controls the supply and makes the market more stable for investors ensuring lower volatility in prices.

Also, the regulations over foreign exchange and ownership in these cities are more flexible and more investor-friendly than in Thailand.

Other related issues, such as taxation on investment and capital gains, are also clearly defined.

However, Bangkok remains a location that offers a wider range of high- quality properties in prime locations, at affordable prices for international investors.

Bangkok’s lifestyle is also more attractive, given the city’s superior healthcare, communications, shopping and transportation facilities.

With the existing selection of attractive projects, an investment in a Bangkok condominium is likely to generate good returns over the short and long term.

ALIWASSA PATHNADABUTR (Bangkok Post)

The Circle (Bangkok)

Click here to view animation


Airport Link Terminal Development Area
Rendering

The Pano (Bangkok)