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Showing posts with label luxury. Show all posts
Showing posts with label luxury. Show all posts
Tuesday, June 17, 2008
Monday, May 12, 2008
Koolpuntville eyes bangkok condo market
LUXURY HOUSINGKoolpuntville 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
Saturday, May 10, 2008
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.Saturday, April 26, 2008
The Sea (Koh Samui)
The Sea Samui, worth Bt550 million. ( Sinthoranee Property)Wuttichai said the company was also studying a possible residential project in Hua Hin, in order to support strong demand in that market.
“We believe in the next two years, we’ll launch new property projects – residential, retail, hotels and resorts – that will generate more income for our property business,” he said.
The Sea Samui is part of its business expansion this year and has sold 40 per cent of its Bt550-million value. The Sea Samui will have six villas and 15 units of low-rise condominiums starting at Bt7.6 million per unit and covering 66 square meters.
Wuttichai said that up to 70 per cent of its customer target for The Sea Samui was foreign investors wanting a vacation home or a second home on Koh Samui, with the rest coming from the domestic market.
The company expects Bt200 million worth of sales from The Sea Samui this year. Total revenue is expected to be Bt310 million, with Bt50 million of that coming from rental fees for Pavilion Place and Bt60 million from the two villas of La Bay Buri de Pran. Sinthoranee’s total revenue target for this year is double last year’s Bt100 million.
Thursday, April 17, 2008
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.
Friday, April 11, 2008
Developers return to Koh Samui
Builders to resume work on projects as government dispels uncertainty about FBA The Koh Samui property market is poised to stage a recovery this year, following the government’s decision to relax the Foreign Business Act (FBA), says property expert Pisarn Tangkasombat.
He said demand for residential projects on Koh Samui doubled in 2006 from the year before but that most developers suspended projects after the previous government tightened the FBA and announced stricter norms on land holding and construction licences for developing residential projects.
Pisarn, also president of the Arayaburi Group, which owns five hotels and resorts on Koh Samui, said most developers – foreign investors and local developers who were partnering foreign investors – had suspended the launch of new projects and work on existing ones. This was because of uncertainty surrounding the Act, as they were not sure whether their projects would be considered illegal.
However, Pisarn said after the new government outlined a clear policy regarding the FBA, developers who had planned projects on Koh Samui would restart work soon.
Some foreign investors will now begin work on their projects in collaboration with local partners, while others have decided to sell their projects to local developers, he said.
“We believe the property market, especially the residential segment, will stage a recovery this year, as the government has announced a clear policy regarding the Foreign Business Act,” Pisarn said.
Research by CB Richard Ellis has shown that Koh Samui, Asia’s emerging “boutique” resort island, is seeing significant growth.
Last year, the island had 1.5 million visitors, up from 600,000 in 2000.
The research also indicates that the number of tourists heading to the island may rise once Thai Airways increases the number of flights on the Bangkok-Samui-Bangkok route to two a day.
The number of airport arrivals this year is expected to surpass 2 million after this.
“ The improved connectivity will be a key factor in supporting growth in the area’s property market. CB Richard Ellis expects increased demand for homes,” said CB Richard Ellis Samui manager Prakaipeth Meechoosarn.
CB Richard Ellis remains confident of the long-term prospects of the Thai resort market.
Last year, the company opened two offices – on Koh Samui and in Pattaya – as part of its plan to expand its network in Thailand. The research said land prices in Koh Samui continued to rise last year even though the number of individual transactions dropped, due mainly to the uncertainty surrounding the FBA.
Last year, the value of property transactions in Samui was estimated at an average of Bt413 million a month, down from an average of Bt450 million in 2006.
Since last December’s general election, reports of viewings and bookings have risen. The type of residential projects most popular on Koh Samui is luxury villas.
Seventy per cent of the villas are priced at below US$1 million (Bt31.65 million).
CB Richard Ellis is now witnessing more developments within a price range of $2 million to $3 million. And as the luxury- villa sector on Koh Samui grows, chances are prices may move to a level that is on a par with Phuket, at least for the top end of the market.Thursday, March 27, 2008
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.Tuesday, March 25, 2008
Thursday, March 20, 2008
Suk31 - 3B-Bath - Royce project (Bangkok)
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.
Pattaya surge by up to 100%
Market rides on strong foreign investor interest Resale prices of luxury condominium projects in Pattaya have surged by up to 100 per cent due to strong demand from foreign investors, especially from the UK and Russia, according to a research report by property firm Raimon Land yesterday.
The Raimon Land report said that demand for luxury condominium projects located close to Jomtien Beach, Wong-Amat Beach and Pattaya Bay had risen strongly while new project launches have been limited.
As a result, the resale price of luxury condominium projects in Pattaya have increased from an average of Bt74,000 per square metre in 2005 to Bt150,000 in the first two months of this year.
Investors who are interested in snapping up properties in Pattaya are mainly from Russia, the UK, Australia, Germany, and Sweden.
Half the buyers of Pattaya properties treat it as an investment, which generates returns of between 8 to 10 per cent a year, while the other half invest in them as a second home, Simon Derville, Raimon Land vice president for research and development, said.
With strong demand in the market, a number of property firms have launched new residential projects.
According to the report, 19 new luxury condominium projects, or 5,177 units, were launched last year worth nearly Bt30 billion. Some are going through the construction phase and this year about 281 units would be completed. About 1,115 units are being constructed now and will be completed next year or over the next two years.
Some 3,781 units would be built over the next two years, to add to the booming Pattaya property market. Raimon Land is a property firm, which is planning to launch a new luxury condominium project this year called “EDGE”, with an investment of Bt3.6 billion.
Raimon Land was very successful with its Northshore project in Pattaya, worth Bt1.49 billion. Its Northpoint project has recorded presales of more than 50 per cent.
Tuesday, March 18, 2008
Investor confidence in Bangkok
Concrete expressions of confidenceNIGEL CORNICK
Investor confidence in Thailand's property market is once again on the rise as the sector is experiencing a new and invigorating start to the year.
The ushering in of an elected government in January has been the single most important factor, but the action of the administration to instil confidence among both overseas and local investors has been commendable and has immediately affected property sales.
The lifting of capital controls, for example, while not directly affecting the property market, has had the effect of creating a positive environment for investment and a perception that Thailand is once again welcoming capital inflows from international firms and institutions.
In addition, the government is about to release an economic stimulus package, which will have a clear impact on property investment and establish a framework that will inspire spending. This is good news for the industry and the country as a whole.
The stimulus package has cut the special business tax for property developers from 3.3% to 0.01% for one year and ownership transfer fees, which are split between the developer and buyer along with registration fees, have been cut from 2.0% to 0.01%.
While the initial tax reductions may seem minimal, business costs are reduced for suppliers, while affordability for investors rises due to the reduction in entry-level costs of transfer and registration.
More could still be done, such as increasing the maximum foreign ownership of condominium projects from 49% to upwards of 70% and opening up local lending to international investors.
In its Thai Property Sector report, the global wealth-management company UBS recently increased its 2008 forecast earnings for the Thai property market to 24%, as a result of theses policy initiatives.
The international business community was also recently reassured that the controversial Foreign Business Act would be next on the agenda in a process that would assess all existing concerns and re-create an environment that would welcome overseas investment.
The upbeat start to the year has been reflected clearly in strong purchasing patterns in the luxury condominium sector, where grade A units have been experiencing brisk business.
Sales at The River, an upscale condominium developed by my company, Raimon Land, surged past six billion baht in March, taking total sales volume for the project halfway to its target of 12 billion baht.
Buyer confidence is thriving throughout the Kingdom, and savvy investors would be wise to take a long hard look at what is on offer.
The Eastern Seaboard is a good example of the newfound exuberance among international buyers looking to active lifestyle destinations for properties to enjoy short-term capital gains or as solid rental return vehicles. Demand from this market has been high, driven by the development of the area into a five-star tourism location and the booming local economy.
Our Northpoint development is testament to this level of interest, with the 376-unit luxury condominium recently topping three billion baht in sales since its launch in November 2006.
Purchases have been noticeably quick since the beginning of 2008, with buyers signing up for 59 units worth almost 600 million baht at an average price of 120,592 baht per square metre. These early 2008 figures are most encouraging when you consider that we sold a total of 110 units in 2007.
This is a clear indication of investor confidence rising in Pattaya, with capital inflows coming from Thai investors as well as a wide spread of other nations, such as Russia, the UK, Australia, Sweden, Germany, Estonia and China. A more recent trend is an influx of Thai expat buyers based abroad who recognise the relative value of Bangkok compared to their current place of residence.
The lifting of capital controls and the offering of stimulus measures that directly benefits the property industry show a combination of both clear intent and positive action on behalf of the new government.
With such positive steps being made in the first quarter of 2008, local and international investors will continue to focus their attention on Thailand's property market and help the industry as a whole to grow.
Saturday, March 8, 2008
$220 million Halong Bay (Vietnam)
The $220 million Halong Star, the first project for Limitless in South East Asia broke ground at Halong Bay near Hanoi, Vietnam. The event was marked by a soil turning ceremony at the project's 125 hectare site, attended by dignitaries from the UAE and
Halong Star, announced in September this year, is a joint venture between Limitless, Phuong Hung Joint Stock Company and International Property Investment Partners LLC. The project will include the area's first five-star hotel, conference facilities, high-end residential units and recreational, cultural and education amenities, all with extensive views of
Speaking in
The start of the work on Halong Star comes just two days after Limitless marked the official launch of its regional operations for SE Asia, based out of
Saeed Ahmed Saeed said: "Limitless was established with the aim of capitalising on
Limitless will engage well-known architects to draw on traditional Vietnamese, French Colonial and modern Asian design characteristics for the hotel and residential elements of Halong Star. In addition, grounds will be landscaped, featuring lakes and tropical gardens to preserve and enhance the natural beauty of
The project is expected to be completed over five years.
Monday, March 3, 2008
Luxury property market in Pattaya.
Eastern Seaboard dynamism drives Pattaya property. Dynamic economic growth along Thailand’s Eastern Seaboard is fuelling the luxury property market in Pattaya and driving its development as a high-end lifestyle destination.
As the city’s economic fortunes rise, so too does the demand for top quality accommodation and facilities, and this has attracted the attention of property investors seeking solid long-term returns as well as many of Thailand’s property development leaders.
The world-class construction conglomerate Bouygues recently opened an office in Pattaya, the company’s first move outside of Bangkok, demonstrating its confidence in the Eastern Seaboard and its future potential for further growth.
The Chon Buri and Rayong areas have a gross domestic product that is climbing faster than in any other region in Thailand. According to the National Economic and Social Development Board, in 2006 the eastern region was the second wealthiest after Bangkok and its vicinity, with a 12% annual growth rate from 2005.
Rayong led the Eastern Seaboard’s annual Gross Provincial Product with 527,366 million baht (an increase of 18% year-on-year), followed by Chon Buri with 407,364 million baht (an increase of 9% year-on-year).
This has given rise to a substantial middle class and established a platform for strong long-term gains, creating a fertile ground for property investors looking to secure lucrative long-term rental agreements for their Pattaya portfolios.
Rental demand in Pattaya is being driven by people with business interests in the area or those who work for international companies that are establishing bases on the Eastern Seaboard.
These companies all have management who need somewhere to live, and this not only generates potential renters but also a large pool of potential buyers with a number of options. They can live in Pattaya for the lifestyle, sell their investment at a higher price or achieve solid rental rates for it.
Rental yields have been averaging 6-10% per year with monthly rates between 500 baht and 650 baht per square metre (psm), while investments are returning sustainable capital gains. Northshore, the first project in Pattaya or our company, Raimon Land, has seen values soar by 70-80%, and it has set a benchmark for the Pattaya market, which no one thought could be achieved. It also demonstrates where Pattaya is headed and where I believe it will continue to go.
The speed of capital appreciation has been staggering, especially when talk of achieving 75,000 baht per square metre was considered unrealistic in 2005. In 2007, Northshore achieved a high of 132,500 baht, although a resale occurred in January 2008 for a seafront unit that reached 180,000 baht psm.
The reason for the skyrocketing rates is largely due to a very limited supply of existing high-quality condominiums. Prices are set to continue to rise and no more than 1,000 to 1,200 units that have currently broken ground will be completed over the next three years.
The emergence of the Eastern Seaboard as Thailand’s most economically energetic region has also brought a more demanding landscape for developers in which investors need to be wowed by high-quality standards in construction, design and finishes.
Pattaya is among the first region’s outside of Bangkok that is seeing new high levels of construction, as evidenced by Bouygues local subsidiary BouyguesThai’s new operation. The company is overseeing the building of Raimon Land’s 374-unit Northpoint in north Pattaya.
From a design point of view, much of what is available is form over function stressing aesthetics rather than effective, practical design. However, high-end investors are looking for functionality in a modern design and many developers are responding accordingly.
Along with the rise in the quality of residential construction, the area’s economic boom is lifting standards across the board in Pattaya as it develops into a destination that can cater to affluent, well-travelled visitors.
All indicators point to continued sustainable economic growth on Thailand’s Eastern Seaboard, and the region’s ongoing rise in prominence will be met by continued demand for highquality residential properties, presenting an excellent opportunity for savvy investors seeking strong rental yields and impressive capital gains.
Wednesday, February 27, 2008
Buying Luxury Condominiums (Bangkok)
Bangkok's luxury condo minium market will become more active this year and the new supply will continue to be limited, according to leading international property consultants CB Richard Ellis.Bangkok, Thailand (PRWEB) February 27, 2008 -- Bangkok's luxury condominium market will become more active this year and the new supply will continue to be limited, according to leading international property consultants CB Richard Ellis.
The high-end and luxury markets, which faced a slight slowdown in 2007 mainly due to the low market sentiment, will become more active in 2008. Last year, the main focus in the Bangkok condominium market was in the mid-range market where projects are located close to the skytrain or other mass transit system. This segment will continue to grow and become more competitive.
Investors are aware that freehold land plots in prime central locations are very limited and the increase in land prices has resulted in a drop in the new supply of luxury units in these areas, whereas demand for downtown city living is growing. Prices of downtown condominiums have continued to rise since the market recovery in 2003, at an average of 10-12% per annum for new projects.
According to Ms. Aliwassa Pathnadabutr, Managing Director of CB Richard Ellis, "We have found that, with the rising construction and land costs in downtown areas, it will be difficult to develop new freehold high-rise condominiums to sell at prices below Baht 100,000 per square metre in prime locations such as upper Silom, Sathorn (a radius of 1 km from Lumpini Park towards Silom and Sathorn Road), inner Wireless Road, Sarasin Road, Rajdamri Road, Langsuan, and Ploenchit Roads, as well as Sukhumvit Road up to Thonglor in good neighbourhoods near skytrain stations. Lumpini Park is seen as the centre of the prime Central Business District (CBD) of Bangkok, an area covering a radius of 1 km from the park and is one of the most sought-after locations where good freehold land is scarce.
Prices of newly launched high-end and luxury condominiums in these areas range from Baht 100,000 to Baht 178,000 per square metre, depending on product and location. Most of these newly launched projects have sold over 60% of their units in 2007 and include such developments as Hansar Rajdamri. The prices of units at the Athenee Residence, a newly completed condominium project on Wireless Road, have appreciated by over 40% in the 3 years since the project's launch in 2004.
In December 2007, the Sukhothai Residences, developed by HKR International, set a new price record for the Bangkok condominium market by achieving Baht 220,000 per square metre for its typical units and Baht 343,000 baht per square metre for one of its penthouses. The project's success in selling over 90 units or 50% of the total saleable area at these record prices in one month indicates that demand for luxury properties is still strong from both Thai and overseas buyers.
CB Richard Ellis Research team has re-categorized the condominium market in the downtown area into 6 different segments by price, including the super luxury segment with prices of over Baht 180,000 per square metre, the luxury segment priced at Baht 130,000 - 180,000 per square metre, the high-end segment priced at Baht 100,000 - 130,000 per square metre, the upper middle segment priced at between Baht 80,000 - 100,000 per square metre, the mid-range segment priced at between Baht 60,000- 80,000 per square metre, and the economy segment priced at below Baht 60,000 per square metre.
The market for the luxury supply has become much more sophisticated in terms of target buyers' requirements. Developers will therefore face more challenges and more intense competition than in the mid-range market. The critical factors in developing in luxury and super luxury condominiums lie in selecting the right location, design, unit mixes and product that must be acceptable to the target purchasers.
"Investment in new luxury condominiums in prime CBD locations has generated an average of 4- 5% yield per annum during the past 4 years and 10-12% price appreciation per annum which is pretty good compared with other forms of investment. Another underlying benefit in investing in residential properties is its potential for future use," said Ms. Aliwassa.
CB Richard Ellis found that demand from foreign purchasers has been increasing during the past 3 years. The average percentage of foreign buyers of downtown condominiums as of Q4 2007 stood at 32% whereas the percentage of foreign buyers was less than 20% on average in the last decade.
The quota for foreign ownership in some condominiums has reached its 49% limit. That means foreigners are no longer able to purchase units in those buildings unless they buy a unit from a foreign owner. This makes units owned by foreigners more valuable in those buildings popular among foreigners. CB Richard Ellis is now seeing the beginning of two-tier pricing for Thai and foreigners in those projects which foreign quota is reached.
Foreign investors have started to note this trend and are looking to invest more in good quality and well-designed buildings that are located in prime CBD locations despite the skyrocketing prices.
Another reason that boosts condominium prices in downtown Bangkok among foreign investors and end-users is their affordable price levels. For example, with a budget of US$ 500,000 or around Baht 15 million, you could purchase a luxury two-bedroom unit with 90-120 square metres in a prime CBD location in Bangkok.
To buy a similar product in a prime central location in other cities like Singapore or Hong Kong, you would have to allow for a budget in the region of Baht 50 - 80 million.
This comparison shows that Bangkok has a wider market base as there are a large number of individual investors in the region with this budget who are interested in real estate investment.
Despite the world property market facing difficult times, Bangkok condominiums, in both downtown areas and along the skytrain routes, are still in demand.
"We do not see price increases at the same rate for non-prime locations in Bangkok as there is plenty of land available for development. The upper-middle, mid range and economy markets will be more competitive in terms of pricing, whereas the key success factor in the luxury market is product quality, design and unit mixes which must match requirements of the target market. Market sentiment is another key factor in driving the high-end and luxury markets," concluded Ms. Aliwassa.
Wednesday, February 20, 2008
Sales at The River hit Bt5bn (Bangkok)
The River, Raimon Land’s largest project to date, was pre-launched in March 2007. Within three days the initial units released were snapped up at a record-setting price for Bangkok of Bt150,000 per sqm.
Since then a further 279 condominiums – with a total area of 38,235 sqm – have been sold for a total value of Bt5.03bn.
Raimon Land’s Chief Executive Officer, Nigel J Cornick, said, “The recent sales figures at The River represent a very positive signal about the current strength of Thailand’s luxury property market. International and local players considering property investments in the country should gain confidence from this news. Capital gains and rental yields continue to show strong signs of growth.
“This is a solid start to the year for the project and a positive indication of where the Bangkok and Thailand property markets are heading in 2008” added Cornick.
The piling for the 250-metre-tall structures got underway towards the end of 2007. When completed, The River will be the tallest residential building in Bangkok, with a dedicated pier and shuttle boat service to the Saphan Taksin skytrain station. Living areas, bedrooms and studies will enjoy spectacular, floor-to-ceiling city and riverside views.
| Project : | Condominium |
| Location : | Charoennakorn 13 Bangkok |
| Land Area : | 13 rai, including 120 meters frontage on the Chao Praya River |
| Launch Date : | Q1/07 |
| Contact : | Sales Office Tel : : +66 (0) 2651 9600 |
| Website : | www.theriverbangkok.com |
Robert Carry
Sunday, February 3, 2008
Cambodian goes sky-high
With apartment now going for up to $1.6 million, the post-war Phnom Penh is barely recognizable
In the market for a million-dollar penthouse suite? Thinking Kuala Lumpur, Bangkok or Singapore? Try Phnom Penh. The Cambodian capital’s rocketing real estate prices have encouraged construction to reach for the skies, according to government spokesman Khieu Kanharith.
A South Korean-funded development, Gold Tower 42, announced this month that it is offering skyscraper apartments from around US$500,000 to $1.6 million, and the development, scheduled for final completion in 2011, will become the tallest in the capital.
‘‘Five years earlier, another company began planning a 32-storey tower on the outskirts of the capital which is yet to be built, and we expect many more such projects,’’ Mr Kanharith said.
‘‘The high price of land makes it sensible to make the most of land investments, and skyscrapers are the perfect solution.’’
Some analysts estimate that real estate prices in Cambodia have increased at least tenfold in as many years as the economy continues to grow and the country enjoys post-war political stability.
For instance, real estate brokers say one square metre of land on Monivong Boulevard — one of the capital’s main thoroughfares and the location of Gold Tower — now goes for an average of $2,500 (84,000 baht). It was as low as $30 when grenade attacks and coups were still daily possibilities.
The changes have come fast — it was only in 2002 that the capital’s first shopping center opened and special instructors were employed to educate shoppers on the previously virtually unknown contraption in Cambodia, the escalator, to prevent injuries.
Cambodia is still eagerly awaiting the arrival of its first international fast-food chain this year and it’s still a race between the Malaysian distributor of Kentucky Fried Chicken and Singapore’s Asian distributors of ice cream giant Swenson’s.
But Kim Tae Gon, general manager of Yon Woo Cambodia Co Ltd, which is building Gold Tower 42, says Cambodia is a ‘‘good marriage’’ for companies such as his.
‘‘The investment climate is good. Cambodia is eager for development. We have sold 40% of our apartments in Gold Tower 42 off the plan already, and the majority of buyers are Cambodians, although Koreans, Chinese and British have also bought as well,’’ he said.
Phnom Penh, known as ‘‘The Pearl of Asia’’ in the 1920s prior to decades of civil war, covers just 375 square kilometres and boasts just over one million inhabitants, compared to the more than 10 million in Bangkok.
With its location at the confluence of the Mekong River and the Tonle Sap River, with much of the French colonial architecture intact and low pollution compared to other regional capitals, Phnom Penh is widely seen as a good investment prospect, according to Gon.
Im Chhun Lim, minister of land management, urban planning and construction, said Gold Tower’s 42-storey, $1.56-billion development was an exciting addition to the Cambodian construction scene, which is now the country’s third biggest industry behind garments and tourism.
During last week’s launch of the Gold Tower 42 showroom, Chhun Lim said the construction industry provided up to 30,000 jobs nationally and revealed that top local technicians could earn up to $1,200 a month — a small fortune in a country where the average wage is around one dollar a day.
Gold Tower 42 will not stay the tallest building for long, however. On Jan 8 the South Korean construction company GS Engineering and Construction unveiled plans to construct a 53-storey skyscraper scheduled for completion in 2012.
Ground-breaking for that new international financial building on nearly seven hectares of land in the heart of the capital is planned for mid-year.
South Koreans have launched an investment offensive in Cambodia to catch up on missed opportunities in neighbouring nations, according to analysts.
An adviser to Prime Minister Hun Sen said that the building will house supermarkets, shops, offices, schools, and accommodation for 10,000 people.
Cambodia’s building industry is booming on the back of double-digit growth and hopes that revenue, and business, will begin rolling in on the back of the expected oil and mineral revenues due to be tapped within the next two to five years. A stock market is also in the offing within a year.Luxury condo market (Bangkok)
Major Development Plc Plc (MJD) remains confident in the growth of the luxury condominium market in next three years despite global sluggishness triggered by the declining US economy, says chief executive officer Suriyon Poolvoralaks. A company survey showed strong demand for grade A condominiums at prices over five million baht in the central business district, higher than the demand for mid-range units, Mr Suriyon said.
The unstable global economy has created worry about diminishing demand, especially for upper-end residential units, but MJD believed conditions would not affect its business operation as the company had targeted customers with high purchasing power that buy on the spur of the moment.
‘‘The premium condo market will continue to grow for at least one to three years. If consumer demand changes, the company is flexible enough to adjust the projects to serviced apartments or hotels,’’ said Mr Suriyon.
Major Development has eight ongoing projects worth 13.8 billion baht and will continue to develop projects serving the upper segment, with foreign residents of Thailand among its target customers.
Last year, the company realised revenue from the Water Mark Tower A worth 3.9 billion baht, and the 1.25-billionbaht Manhattan Chidlom, and partly from the 1.8-billion-baht Fullerton Sukhumvit. It expects to realise revenue from all ongoing projects in this year.
MJD shares closed yesterday on the Stock Exchange of Thailand at 3.70 baht, down 10 satang, in trade worth 16.7 million baht.
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