Wide Opening between Price Prospects in Property

Regardless of constant interest and additional properties up for sale, investment activity in the Bangkok property market has been unresponsive as there remains a wide opening between purchasers and sellers prospects.

Suphin Mechuchep, managing director of Jones Lang LaSalle, said interest in the Bangkok property market continued to be strong. Though, purchasers were generally looking for concerned assets obtainable at profound discounts.

All together, sellers decline to dispose of their property at a loss, in spite of uncomplaining the softer market circumstances. So, investment activity in the property market had declined, with purchasers abiding to adopt a wait-and-watch attitude.

“In recent months, we have been persistent to get enquiries from investors in hunt of large land plots, office buildings or industrial properties obtainable for sale in and around Bangkok. Though, all the enquiries were motivated by the search for concerned property assets,” said Umpon Thepnumsommanus, director of investments at Jones Lang LaSalle.

“At the same time as purchasers are expecting to obtain the property at a profoundly discounted price, sellers have yet to meet financial circumstances which would compel them to acknowledge losses,” Umpon said. “We have until now seen a few landlords only eager to decrease asking prices.”

The wide-ranging consent is that property values are declining. Though, the extent of the decline in property values is highly indecisive.

He said there have been only some property investment transactions since 2008 to date. Therefore, real transactions against which to standard are limited. For instance, land on Sathorn Road was transacted at Bt500,000 per square wah in 2005 and Bt800,000 in 2008. Until now in 2009, there has been not a single land transaction to sustain the concept that land prices in this area have plunged.

“In the present situation, sellers are lowering their asking prices. On the other hand, circumstances are up to now dissimilar from those during the tom yum kung disaster when owners were compelled to sell at a loss,” said Suphin.

Owners Cautious Of Lowering Costs for Properties

A broadened bid-ask spread has came out in major real estate markets across Asia, because property owners, hold up by solid market fundamentals, remain unwilling to lower their asking rates, as per CB Richard Ellis' Asia Pacific Investment Market Report for the second quarter of 2008.

Even though Asian markets have been pretentious by slowing economic growth and disturbed capital markets, economically sound institutional investors, together with pension and independent wealth funds, stay active across major cities in Asia, and direct commercial property transactions in Asia were up somewhat year on year in the first half of 2008, as per the company.

Numerous large transactions were accomplished in Thailand, with the center of attention squarely on hospitality properties and the countries major resort markets, where investment response remained healthy on the back of continued growth in the hospitality and tourism sector. Many hotels in Phuket changed hands, with a few to be modernized and rebranded. Land transactions incorporated the sale of a freehold plot for about Bt1 billion on Koh Siray, and this trend will keep on like this because a number of investors realize large capital gains from holding properties for the past 2-3 years.

Investment movement in the Bangkok property market, in contrast, was highlighted by getting hold of a plot of land in Sathorn for Bt1.4 billion by AIA, representing that investors retain buoyancy in the sector's prediction. Other prominent transactions in the capital incorporated the sale of many hotels and commercial properties.

Regionally, Japan persistently attracts most of the investor's interest, accounting for more than 30 % of Asia's biggest investment transactions. Banks and financial institutions have been cutting lending activities in 2008 in Japan. Extremely leveraged investors as a result sought to decrease liability by bringing assets to the market and this resulted in a recosting of residential, suburban retail and fringe offices properties. Though, asset pricing for the best situated and utmost quality properties remained comparatively firm.

Panichewa Family Investing In B800m Condominium Project

The Panichewa family, the biggest shareholder of Unique Engineering & Construction and the Don Muang Tollway, has collaborated with Singapore-based construction firm TEE Group to invest 800 million baht to build up a condominium project in the Ratchaprarop area.

Chartchai Panichewa, chairman of Chewathai Ltd, said the Singapore partner, which has familiarity in mechanical and engineering construction, would add to the latest property project. "We have no experience but we have resources. The partner can lend a hand to control construction and expenses during unpredicted construction circumstances. With their significant engineering, we can build up the project with viable costs," he said.

The 1 billion-baht Chewathai Ratchaprarop Condominium will be situated on a two-rai site next to Century Park Hotel on Ratchaprarop Road, consisting of 329 units sized between 35 and 300 square meters and priced approximately 70,000 baht per sq m. Construction will begin in November and is planned for completion in 2010.

Mr Chartchai considers these prices are striking as other recently launched condominium projects in the same area were quoted between 80,000 - 90,000 per sq m. "We are latest in the Bangkok property market. We have to utilize low cost to lure buyers,'' he said.

Regardless of an official launch in September, the developer has by now sold 50 - 30 units by Thais and 20 by Singaporeans who saw the project's road show in Singapore. Approximately 100 Singaporean home-buyers on the waiting list would visit the location shortly.

The location is striking as it is around 700 meters from the Airport Link and 600 meters from the Victory Monument BTS station. The company is looking forward to have 50% sales by the end of 2008.

Launched in March of 2008 with registered capital of 100 million baht, Chewathai is 51% detained by Mr Chartchai and the remaining by the listed Singaporean firm. It is preparing to get listed on the Thai stock market in the coming 5 years and Mr Chartchai would lure his family members to invest.

Panichewa Family Investing In B800m Condominium Project

The Panichewa family, the biggest shareholder of Unique Engineering & Construction and the Don Muang Tollway, has collaborated with Singapore-based construction firm TEE Group to invest 800 million baht to build up a condominium project in the Ratchaprarop area.

Chartchai Panichewa, chairman of Chewathai Ltd, said the Singapore partner, which has familiarity in mechanical and engineering construction, would add to the latest property project. "We have no experience but we have resources. The partner can lend a hand to control construction and expenses during unpredicted construction circumstances. With their significant engineering, we can build up the project with viable costs," he said.

The 1 billion-baht Chewathai Ratchaprarop Condominium will be situated on a two-rai site next to Century Park Hotel on Ratchaprarop Road, consisting of 329 units sized between 35 and 300 square meters and priced approximately 70,000 baht per sq m. Construction will begin in November and is planned for completion in 2010.

Mr Chartchai considers these prices are striking as other recently launched condominium projects in the same area were quoted between 80,000 - 90,000 per sq m. "We are latest in the Bangkok property market. We have to utilize low cost to lure buyers,'' he said.

Regardless of an official launch in September, the developer has by now sold 50 - 30 units by Thais and 20 by Singaporeans who saw the project's road show in Singapore. Approximately 100 Singaporean home-buyers on the waiting list would visit the location shortly.

The location is striking as it is around 700 meters from the Airport Link and 600 meters from the Victory Monument BTS station. The company is looking forward to have 50% sales by the end of 2008.

Launched in March of 2008 with registered capital of 100 million baht, Chewathai is 51% detained by Mr Chartchai and the remaining by the listed Singaporean firm. It is preparing to get listed on the Thai stock market in the coming 5 years and Mr Chartchai would lure his family members to invest.