Property Firms Crunch Into Bitter Pill

Property firms will experience hard times in the last quarter of 2008 as homebuyers may holdup their resolution to invest in residential projects opening in the third quarter, as per a research by Asia Plus Securities.

Asia Plus Securities senior executive director Therdsak Thaveeteeratham said financial consequences in the third quarter of property firms programmed in the stock exchange will be well again compared to the same period in 2007. Though, the third quarter act will be lower than the second quarter in 2008 as homebuyers are holding up their resolution to purchase residential projects, worried about their upcoming earnings once the global economic calamity hits Thailand's financial system.

As per the research by Asia Plus Securities, 6 out of 12 property firms will declare lower net profits of about 12 %- 62 % in the third quarter of 2008 compared to the second quarter of 2008. Preuksa Real Estate will keep its net profit in the third quarter similar to that of the second quarter of 2008.

"We predict that their net earnings in the third quarter will be poorer than the second quarter as nearly all recorded presales in the third quarter of 2008 is lower than the second quarter of 2008. For the time being, demand for residential projects has decreased considerably, even though the government may choose to extend its tax incentive time limit for property from March 28, 2009 to March 28, 2010," he said.

He further declared that 31 property firms had confirmed presales of Bt28.12 billion in the second quarter of 2008, a decrease from Bt30 billion in the first quarter of 2008.

The company also predicts that their presales in the third quarter will be approximately Bt25.8 billion, an 8% fall from the second quarter of 2008. That reveals the government tax incentive was not sufficient to encourage home purchasers if they were worried about their upcoming earnings. This will affect economic consequences in the third quarter of 2008 and may have an effect on the last quarter of 2008 when the country's ongoing political insecurity and the global economic hold back start to hit the Thai financial system.

Phuket Condominium Prices Now Twice That Of Earlier

The usual price for a condominium in Phuket is currently 101,203 baht per square meter, which is just about two times the price per square meter as compared to the usual condominium prices in 2005.

This fact is revealed by new Raimon Land publication “Why Invest Phuket”, which in addition accepts the constant bang of the Phuket real estate sector thanks to latest hotel plans, acquirements and promotions moving further on regardless of current economic and political uncertainties.

“Why Invest Phuket” is organized by Raimon Land´s research team, making available all the most recent facts, figures and developments with respect to Phuket.

The research team moreover establishes that global interest from the United Kingdom, North America, Scandanavia and Australia remained strong, at the same time as interest from Russia and China was up-and-coming.

“Taking into consideration the international brands putting money in Phuket´s hotel market and the variety of nationalities purchasing Raimon Land developments, there is no uncertainty that Phuket is ready to face enduring expansion in the real estate sector,” the report acknowledged.

The report expected solid earnings and capital gains for the upcoming for both Thais and foreign persons who can pay money for freehold condominiums in Phuket and influence their investment all the way through the construction period with eye-catching structures.

At present, rental earnings are ranging from 6 to 10 percent per annum and purchasers are enjoying quiet compatible increases.

At Present Phuket Is The Ideal Place To Survive The ‘Storm’...

Phuket is a small Island that has undergone a spectacular change in the past 7 years … a makeover that for several reasons makes Phuket a safe place to invest and probably the only place on the planet that will keep on attracting affirmative capital flows and prominently confirm firm capital approval in the coming few years.

Phuket doesn’t have the rah rah of Ibiza, the candid hoi polloi and pretentiousness of Bridgehampton, the paparazzi of St Barts and the wild features of Bali’s party life although in that also lies its attraction and demand.

Phuket is an island that maintains the lure of being inaccessible from the world in various ways and also, absolutely, remote from Bangkok’s general political circumstances. The tsunami, bird flu and military revolution in Bangkok established this.

That refrain at present is one of power in the face of a global shakedown. Phuket is the hotspot for Singapore and Hongkong based tourists who are also the main property purchasers.

There is more or less no land obtainable and there are very restricted supply of fresh projects and luxury homes into 2009. Jumeirah private island is nearly sold out, The Taj on the island of Koh Lon is in progress and is to be launched in 2009 with a handful of superb residences. Park Hyatt has cancelled their expansion plans on the west coast, as have sweepstake up at Natai Beach. A latest W hotel (Natai Beach area) and impending declaration of further 5 star also at Natai Beach area is excellent news for the Northern beaches, in addition Bill Heineke is carrying out Turtle village in the exterior the JW Marriott by christmas which has retail shops. Langham Hotels are also on course to begin construction in 2009.

The most excellent luxury investments for peak season are:

1. Istana
2. Sava
3. Bluepoint
4. Napa (Koh Samui)

Anantara Looking For International Growth

Anantara Resort and Spa is ready to uncompromisingly spread out into international markets all over Asia and Africa subsequent to the achievement of its initial overseas projects in Bali and the Maldives.

Dillip Rajakarier, COO of Minor Hotel Group declared that the company was searching major developments in the subsequent few years, saying the “internal protuberance is for just about 30 hotels all over the world although my individual favorite is 40 plus”.

At present the group controls properties in Hua Hin, Koh Samui and in the Golden Triangle in Northern Thailand and will launch one in Phuket very soon.

India will also be endeavored into, with seven hotels by now signed up for supervision in chronological areas for example Rajasthan.

An additional fresh property called Desert Oasis will be launched by the last quarter of 2009, accumulating to the company’s 100-acre spa before now in Abu Dhabi.

Further, additional brands of the group take in the ultra-deluxe Naladhu, which plans to develop on the African market, with 3 to 4 hotels and resorts in the pipeline, adding to the 4 properties which the trade name have possession of.

Rajakarier further added, "We are not going to bring to a halt as our strategies take account of heading to Morocco, these will get nearer on-stream and in good time and are now in advance energy, and our recent center of attention is on building the trade name and making it a international achievement story".

Phuket Survey Reveals Long-Term Demand

The worldwide economic crisis will have a temporary impact on Phuket's property market, which has improved since the second half of 2007, although projects with low pre-sales might experience economic problems, said Nigel Cornick, chief executive officer of the property developer Raimon Land Plc.

He said projects with a pre-sales rate of below 35% might have troubles financing project development as financial institutions would decline loans to a project with low sales.

As per the company's survey, Phuket's villa supply started from 2003 is 17 projects and 363 units (63% sold) all at present under development.

The condominium supply is 48 projects with 2,202 units from 2003 in anticipation of June 2008. Of this total, 22 projects with 752 units have been finished and their units are currently 90% sold. Another 26 projects with 1,450 units (49% sold) were in the process of development.

Further 2,000 condominium units are ready to enter the market and 63% of these have been sold.

In the first half of the 2008, condominium unit sales overall 2.7 billion baht – an increase of 15% from 2.4 billion baht in the second half of 2007 and up 80% from the first half of 2007.

The revolution in September 2006 had set off a major decrease in condominium demand, with the price falling from 2.6 billion baht in the second half of 2006 to 1.5 billion baht in the first half of 2007. On the other hand, from the second half of 2007 the price of condominium demand has increased constantly.

The average value of condominiums increased by 8% to 101,203 baht per square meter in the first half of 2008, with the average value per unit being 15.9 million baht.

"Those who moved to Phuket can get a good opportunity of strong long-term profits both in rental yields and capital gains as shown by the elevated prices of units sold at lots of luxury projects," said Mr Cornick.

Investing In Phuket Real Estate Sector

It's very important that you complete your homework before making an investment in Phuket real estate sector.

If you previously have experience with domestic investment property market, you may want to think about expanding your range by buying an investment property in Phuket.

At the same time as diversification is a highly advantageous part of any property investment plan, you need to know that purchasing in Phuket carries a degree of threat if you do not revise your purchase. It's vital to deal with several major issues prior to jumping into the market.

Firstly, it's essential to explore the market in type of property you're bearing in mind investing in. The property market in various sectors may function rather differently from others. Villas, Condominiums, directed or self managed all have separate markets.

You must put on a perceptive of the long-term financial, demographic and political factors that make property values in Phuket. This will find out which property prices are comparatively steady and which are dependent on extreme instability.

Next, it's essential to be familiar with the lawful and authoritarian necessities that oversee purchasing residential property in Phuket. There are strict rules on foreign possession of residential property. Foreigners can only purchase definite type's of properties and not land if not a suitable corporate structure is in place.

Also, keep in mind that the type of property title differs to a great extent in Phuket. At the same time as most residential property in other countries is bought on a freehold title, it is an unusual story abroad. In certain countries, you don't purchase a freehold title; you just purchase leasehold entitling you to long-term utilization of the land.

It's crucial to learn about the tax management of residential investment property in the applicable country. What level of tax will be relevant to the rental income, and will you have to give capital gains tax when you sell? Also keep in mind that if there's no tax agreement between that country and yours, you may be accountable to pay tax at home.

In summary, purchasing direct property in out of the country markets needs a considerable amount of time and due attentiveness. If this sounds like too hard a job, it may be better to think about a managed abroad property fund in its place.

Dazzling Expectations for Green Building

Approval of green real estate practices in marketable and residential buildings presents very lucrative Green House Gas (GHG) emission cuts in contrast to other financial sectors. This is one of the major conclusions in a Green Real Estate Guide gathered by global real estate services company, Colliers International.

Mr Simon Carter, author of the Guide and Colliers International Regional Head of Sustainability for Asia - Pacific, reached Bangkok a few days back to talk about international best practice and modern trends in green design with neighborhood architects, designers and developers.

“On a daily basis we are observing the effect of global warming in weather patterns all over the world,” said Mr Carter. “With suburban and marketable buildings representing up to 15.4% of greenhouse gas emissions, we look forward to governments and economies will rapidly turn to buildings to attain deep emission cuts promptly.

“At the same time as the move to green buildings has just started, real estate markets in Asia and the world are expected to change promptly, adopting green standards both in developing fresh buildings and improving accessible ones.

“The expertises of green buildings and their capability to work competently have now been established in different locations all over the world. “

Colliers International Thailand Managing Director, Patima Jeerapaet said the Thai Government had approved the Kyoto Protocol on Greenhouse gas emissions, although had not accepted detailed targets for emission cuts.

“Currently there is a policy environment of hushed support, however there may be a requirement for the more substantial incentives and clearer rules comparable to those accepted in other countries, if Thailand is to maintain pace with other markets.”

Ms Patima said proposals by companies like Tesco Lotus, which has constructed two ‘green stores’ in Thailand and has an extensive energy management program in its facilities supervision, have verified the business reimbursement that is achievable from following green practices.

“The winners in the budding ‘carbon economy’ will normally be those who organize early. We believe progressive developers and landlords are now organizing themselves to show the way, before follow, the change that is imminent”.