Malaysian Contractor Seeking More Work in Thailand

After building Baan Ua-arthorn low-cost residential apartments in Thailand, the Malaysia-based contractor Bina Puri plans to look for further construction work from the private sector, bidding for five projects of approximate value of three billion baht. ''The Thai financial system remains healthy and will persist to develop in the next 10-15 years, seen from the population which is twice the Malaysian population,'' said the company's executive chairman, Dato' Mohamed Feisal Bin Ibrahim.

The bidding result for these five projects will be declared within September 2008. In the middle of increasing construction prices, the groups fill pays complete attention on cost and construction management, in addition to speed as its potency. It is also looking to build up some Bangkok apartments and Bangkok offices in Thailand.

At present, the Thai unit is managing construction of some residential apartment projects with an entire construction amount of 16.5 billion baht, together with TCC Capital Land's S&S Condominium and Areeya Property's three 'a Space' projects.

On the other hand, it has combination with Deva Development in a turnkey contract for Baan Ua-arthorn low-cost apartments with 31,100 units and total construction amount of 13 billion baht.

Dato' Mohamed said the company utilized a fresh tunnel formwork system to restore conformist resistant concrete post-and-beam structures with unbreakable concrete shear walls. ''This plan with the hi-tech advances added more inner space,'' he said.

The definitive benefit of the use of a tunnel form system with shear wall design is investment in terms of construction time, decreased workers and elevated structural reliability for the buildings, he said. At present, Bina Puri Group has construction jobs of approximate value 21 billion baht in hand, among which 40% are in Malaysia. It aspires to attain 6.2 billion baht in revenues by the end of 2008, among which 5.5 billion would come from Malaysia and 700 million from Thailand.

Companies are Moving to Tourist Centers to Attract Buyers

Companies are moving to tourist centers to attract buyers. This move comes as local requirement is expected to fall in 2008.

With requirement for Bangkok Apartments and Bangkok Offices likely to slow this year, developers are turning their focus to foreign buyers, with projects at tourist centers. Most companies are moving to Pattaya, Phuket and Hua Hin. The move is part of an approach to deal with business risk cropping up due to the predictable fall in local demand.

Developers are presenting fresh projects at tourist hot spots at costs higher than Bangkok apartments and Bangkok offices.

Key Development plans include two luxury condominium projects of value Bt6 billion in Pattaya and Hua Hin in 2008: the Marrakesh Hua Hin Apartments and Reflection Jomtien Beach Pattaya.

The company has prolonged its investment into the tourist hot spots for the reason that it views a strong demand, particularly amid foreign buyers. Foreign buyers have shown strong interest in making these places a second home and are eager to purchase property. The developers look forward to foreigners to rise up about 49% of the units in projects based in Pattaya and Hua Hin.

The demand for apartment and office projects at tourist places close to Bangkok has seen strong development,. This is the cause why companies are investing in those areas, with projects concentrating on the middle to upper markets.

Condominiums are the most preferable property for foreign investors, for the reason that Thai law permits foreigners 49 % possession of these types of projects. The left over 51 % of the units have to be possessed by Thai nationals or Thai companies.

A research by Colliers International reveals condominium costs on Koh Samui are the highest, ranging from Bt 125,000 to Bt 130,000 per square meter. After that comes Phuket, with costs ranging from Bt 77,000 to Bt 106,000 per square meter. Costs in Hua Hin were between Bt 66,000 and Bt 80,000 per square meter.

Developers Pay Attention to Save Power Theme

Developers are paying attention to the energy efficiency as government pushes fresh standards.

As the Energy Ministry is preparing to hit the power-save button on fresh Bangkok apartment and Bangkok office projects, developers are paying more attention towards environment-friendly apartments that helps to maintain electricity consumption low.

The ministry is preparing to set up innovative energy-saving standards for apartments and offices with a coverage area of 2,000 square meters or more. For instance, construction materials utilized in walls, roofs, doors and windows will have to pass the heat-ventilation standards test at the same time as the air-conditioning and lighting systems will have to contain energy-saving systems installed.

These are components of 11 energy-saving actions declared by the ministry in April 2008. The measures are likely to push developers to make the change to energy-efficient projects although it may involve a 5%-10% hike in construction expenses.

Firms are now preparing publicity operations about the energy-efficient theme to attract home-buyers. They are likely to include ecological and energy-saving deliberations into their brand-building plans in 2008.

Developers are worried regarding power consumption and are eager to design Bangkok Apartment and Bangkok office projects meeting the requirements to energy-saving standards regardless of the extra construction prices.

The energy-efficient label will be a new marketing device to endorse projects as developers will concentrate on home-buyers who are ready to pay additional price for such properties. Utilizing energy-saving construction material and design will happen to be a major distinguishing point at the time of selling projects.

According to a few developers, they can also save energy by making apartments keeping the direction of the wind and the sun in mind. Building a wind-facing apartment, would definitely keep air-conditioning necessities to a least and help save energy.

The government has been approaching the cause for a while now by arranging competitions for energy-efficient apartments and offices. And the developers are now looking forward to the competitions as a chance to endorse themselves if they win.

Bangkok Becoming The Most Preferred Location

Most of the freehold land in recent times purchased in Bangkok's central business district has been for Bangkok apartment and hotels developments rather than Bangkok office buildings.

In the coming four years, office space will be restricted and rents are likely to keep on increasing. The requirement for offices would perhaps be much elevated if Thailand endorses itself as striking location for companies providing services to the local financial system and developed Bangkok as an appropriate city for their regional headquarters.

One of the drivers of requirement for Bangkok office space is requirement from multinational companies (MNCs). Other Asian cities, like Singapore, Hong Kong and Shanghai, have taken huge advantage from this type of demand, both in terms of profit to the real estate sector and in terms of jobs created for local people. These countries have set up strategies that offer incentives to support MNCs to use their countries as a place to set up a branch to provide the local financial system and conduct local and international operations.

Thailand's plentiful land and major ports, and its developments in infrastructure and transportation, together with the mass transit systems, in addition to its capability to present value in terms of quality of office and apartments against price, make it an appropriate place for service industries with a manufacturing base.

There are several causes why a company prefers to establish operations in a specific country instead of another. One is convenience; Thailand, mainly from the time of opening of the new airport, is as effortlessly accessible as any other country in the area The size of the local financial system also plays a key role and Thailand has developed very quickly over the past two decades, although it follows regional competitors, like Singapore and Shanghai, in terms of infrastructure. There is one more reason i.e. government incentives. A few countries, like Singapore, provides a strong package of profits to any company that establishes its regional headquarters there, or have a desire to give services to the local financial system. These profits comprises of lower taxes, easier approval for the employment of foreigners (work-permit rules and visas), restricted bureaucracy and others. Actually, these countries make it simple for companies to establish an office in their country.

Property Market in Bangkok and near by Areas is about to Fall

The property market in Bangkok and nearby areas is about to fall 7.2 % in 2008 compared to 2006, because of the hike in cost of construction and a fall in customer's purchasing power, research by Kasikorn Research Centre revealed.

The research reveals that even though the government launched tax package to enhance property requirement on March 28 and many commercial banks established financial packages to increase their mortgage-loan business in the first half of 2008, demand for Bangkok apartments and Bangkok offices has continued to go down.

The government's tax package, which abridged special business tax, transfer tax, mortgage fee and transfer fee, did not have a positive effect on the real estate market for the reason that home-buyers are in front of far more negative issues, like hike in cost of living due to the oil price increase and costs of several goods getting higher.

Home-buyers' income is also likely to go down for the reason of the country's elevated inflation, which has touched a double-digit figure in 2008.

The research says that demand for Bangkok apartments and Bangkok offices will stand at 67,600 units in 2008, a fall of 7.2 % from 72,808 units recorded at the end of 2008.

Separate apartments, double apartments and townhouses are likely to fall 9 % from the 32,741 units in 2007 to settle at 29,700 units. Property market will also have to face a fall of 16.8 % from 25,251 units in 2007 to 21,000 units in 2008.

On the other hand, the condominium market will record a 14 % growth, from 14,816 units in 2007 to 16,900 units in 2008.

Demand for condominiums has recorded escalation regardless of the hike in oil-price as many home-buyers have decided to purchase city condominiums to cut down their transportation costs. Though, home-buyers have to choose projects based on whether they present ready-to-stay condominiums, as different from that are partially completed.

This is for the reason that property developers are likely to increase condominium-project prices after costs of major construction materials, like steel, have risen considerably.