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.

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.

Thai Real Estate Slows However Won't Collapse

If there had been buoyancy in the Thai real estate, the worldwide economic crisis has quickly turned the outlook around.

Most real estate sectors all over the world have been affected and Thailand is no exemption. Worse, the local political chaos and reports of current turbulence may have added to the uncertainties of property investors.

Certainly, prices of luxury homes in Thailand - which were well-liked with wealthy foreigners - look set to fall. Although while demand and costs are to be expected to fall, analysts and property experts based in the country says they do not look forward to the market to collapse.

What this means is that those who are in search of a retirement home may want to wait, at the same time as those who have by now bought property there may want to keep a hold of and ride out the emergency.

A current Citi report said the third quarter was the beginning of a recurring recession in the Thai residential property market, as sales slowed.

Fresh launches, for example, forced by 55% in September compared with September 2008 as the political chaos, weaker customer confidence and indecisive financial position took their charge, it said.

Though, the sharp drop in fresh condominium launches in September was not a symbol of a failing condo segment as condos continued to be the best ever selling segment in the third quarter, it said.

In addition, analysts do not make out the political chaos hitting the market harshly. Mr David Simister, chairman of property consultancy CB Richard Ellis (CBRE) Thailand, said the Thai political circumstances may be chaotic at present, but this is not new and will not outcome in the market collapsing.

In Thailand, foreigners are not permitted to possess land although they can purchase a condo unit, though only up to 49% of a development's commercial area. Based on a third quarter CBRE survey, out of 3,217 condo units in Bangkok sold to foreign purchasers since mid-2005, Singaporean purchasers accounted for 12%.

Singaporean property manager James Tan invested in a $190,000 two-bedroom unit in a low-rise residence block in Bangkok with capital approval in mind six years ago. He said he made small earnings however it was not worth the costs concerned.

Future of High rise Property Projects on the Edge Remain Undecided

Regardless of the optimism in the real estate market, there are at present a large number of high-rise property development projects left on the edge. At the same time as a few of them have the prospective to continue construction, it is estimated that several will see no movement in the near future.

A large number of high-rise property development projects were initiated and completed in Bangkok from the property market crest in 1994. Though, construction of most of these projects comes to an end when the economic crisis hit the roof in 1997. At the same time as a number of them have restarted construction over the past recent years in response to better market conditions, lots of them have remained left incomplete since then.

The finding of a recent study reveals that there remain 48 high-rise projects, whose construction is in progress and then has been put on hold from 1997 till now. The findings also show that the office and condominium sectors have seen the utmost supply on the edge, with 43 projects having stopped construction for over five years.

As only some parties have discovered the technical authenticities for these long-time skeleton buildings to restart construction, there are many issues that both developers taking into account re-establishing their projects and investors in view of taking over poised projects will have to take into account in terms of viability. For example, along with high-rise property projects that have been left incomplete for several years, it is hardly feasible that parts of the building structure and a number of built in systems that have been installed by now may be damaged by the atmosphere and due to the shortage of maintenance. Changing new systems can take additional time and be more expensive than installing the similar systems in a fresh project. The possible marketability of the projects by the time when they will be finished is another key subject to think about.

The Bangkok and Pattaya Real Estate Market

After revolving in a stable sales performance in 2007, in spite of political circumstances and declining global economic conditions, Pattaya is likely to see the launch of a lot of distinguished residential developments in 2008, together with up to eight new condominium projects such as Major Development’s Reflection, Raimon Land’s The Lofts Southshore and other projects. These projects are most probably support the high-end development tendency that has been seen in Pattaya in the last five years.

Raimon's Northpoint has proven to be triumphant and has accomplished few of the highest prices per sqm in the area. The Spinnaker, part of the White Sand Beach project, has also gained good sales.

Although investors are persistent to be interested in the Thai property market, the intensity of transaction activity continues to be low due to a deficiency of eager vendors. Buildings and land plots are obtainable; though, most owners are seeking finest prices for both income-producing assets and land plots. Besides, there is a shortage of fresh and good quality properties in the market with most owners wanting not to sell, there is still a good requirement in resort destinations like Phuket, Pattaya and Koh Samui.

The Bank of Thailand (BOT) relaxed capital controls in fourth quarter of 2007 for ventures in property funds to let off overseas investors from both the unremunerated reserve requirement (URR) and fully-hedged requirement for recently issued units in obtainable property funds by accessible unit holders although not for fresh investors in obtainable or fresh property funds..

In first quarter of 2008, requirement of residential property continued to be stable as luxury projects in excellent locations with exclusive selling points sustained to execute strongly. The number of recently launched city center condominium projects and Bangkok Metropolitan Region (BMR) housing projects reduced as developers prefer to be careful, given long-lasting hikes in construction costs and the election of a new government whose strategies were as until now unknown.

The residential leasing sector also observed constant demand. The average possession rate of emigrant apartments in the city center area remained in the 87-93% range observed since 2000, suggesting a stable market. Serviced apartment occupancy decreased because of the sharp elevation in supply in 2007.

2008 Could Be a Good One for High-End Property Projects in Thailand

After a inactive first half of 2008, the Thailand property market has observed considerable growth in the third quarter of 2008, mainly in the luxury condominium and apartment estate segments, commercial property has continued to be strong which presents an even brighter point of view, according to Thanisarra "Honey" Sinprasertwong CEO of One-2-Property.

Thai Real Estate Association president Somchao Tanterdtham expects that the real estate market in Thailand would see growth of approximately 5 % to 10 % in the third and fourth quarters of 2008.

"In the first six months, the property market has not done well for the reason of economic volatility and price increases, which have elevated the level of ambiguity in the minds of customers," Somchao said.

Honey said the costs of a lot of real estate projects are likely to increase considerably in the next few years for the reason of strong price increases, elevated construction costs and the increasing costs of raw materials.

Lots of customers are ready to pay money for property in 2008 on the prospect that costs would go up in the next few years.

Commercial banks in Thailand will decrease their deposit insurance to around Bt1 million [per account] in the coming five years in agreement with the Deposit Protection Act lowering interest and security from bank accounts. A lot of locals have wanted different investment prospects, like investing in property and exchanges which makes available higher returns.

Buzz-Inc's (Owner of One-2-Property) Chairwoman , particularly Phuket and Bangkok said, "China's quick expansion has given a fresh market not only for tourism, however for property also, we have observed enthusiastic interest at Expo's in Hong Kong and from our Advertising from China and at present around 20% of hotel enquires are coming from Hong Kong and Shanghai".

Numerous property developments that had been built in the previous year are still convincingly priced as developers sustained lower prices then, however they are preparing to sell out as the market knows things will turn out to be more costly next year.

M.K. Delays Condominium Development Plans

M.K. Real Estate Development will give attention on developing low-rise apartment projects after the termination of tax incentives next March, and is holding up plans to bigger scale condominium projects, says assistant managing director Chutima Tangmatitham.

“The tax incentives helped get better demand for our apartment projects in the first half of 2008 as homebuyers got tax reimbursements”, said Chutima.

On the other hand, because of the harsh environmental impact appraisal rules, elevated construction expenses and lower margins when compared to low-rise apartment projects, the company is not preparing to get underway any high-rise condominium developments in 2009, although does look forward to start 3-4 low-rise apartment projects worth a combined value of Bt2 billion.

M.K. Real Estate Development has already purchased a number of land plots for the new developments and is at present in talks for others.

M.K. Real Estate Development has a sales accumulation of approximately Bt1.6 billion baht, among which the company looks forward to clear around Bt1.4 billion this year in 2008. The developers has attained revenue of around Bt1.48 billion by now in 2008, which is more than half of the Bt2.7 billion sales target for the year 2008.

After a heavy first half of 2008, the Thai property sector is beginning to rise up, and will record growth somewhat between 5-10 percent, says Thai Real Estate Association president Somchao Tanterdtham.

"In the first six months, the real estate industry has not done well for the reason of economic volatility and high inflation, which have increased the level of hesitation in the minds of customers," Somchao said.

Many consumers are keen to purchase this year on the probability that prices will rise considerably in the next few years due to high inflation, elevated construction costs and the increasing costs of raw materials.

A lot of property developments that had been built last year are still sensibly priced for the reason that developers earned lower costs then, although they are beginning to surrender as the market knows things will happen to be more expensive in 2009, says Somchao.

Thailand Should Take Advantage from the Projects

In this age of globalization, the partition between East and West appears to have become hazy. However things are still done in a different way in the two halves of the world, and this definitely applies to property growth. In the UK, for example, some perceptions unknown to Thailand's market could be very welcome.

For example, says Joel Feldman, managing director of Akando Co Ltd, why shouldn't developers be grateful to make their projects promote the wider society?

Akando is constructing 275 out of 700 flats at FP Condominium in Lat Phrao Soi 48 for the UK-based Lizmans Property Fund. And, in spite of the disagreement with his own financial interest, he would prefer to observe such developments adding significance to their cities.

"Honestly, that is what the administration should make certain. It shouldn't be about trying to satisfy developers and to let them make their earnings. If they can't make their earnings then they don't do it,'' he says.

In London a developer cannot get planning permission for any project over 14 units without a transaction in social housing for key workers like firefighters, police officers, schoolteachers and nurses. For the reason that workers in these professions cannot have enough money for the city's property prices, the British government has gratified developers to participate in a subsidized scheme.

''The key worker is permitted to pay money for a shared ownership with the government having 50% of it. It's a lower price although it's still done to the necessary quality and conditions,'' he says.

Mr Feldman also sees a useful comparison with the UK in the advancement of the Thames and the Chao Phraya rivers. ''If you stare at the Docklands, South Bank and all the way up the [Thames] river this time they have made an astonishing renewal,'' he says.

Unsurprisingly, Mr Feldman is also eager on protecting old buildings. In his outlook, preservation orders should be extended to take in the modest buildings that uphold Thai traditions. Mr Feldman adds that he sees no cause why buildings in Thailand should be estimated to last only 15-20 years.

Shinawatra Family Plans to build up a Luxury Project

The Shinawatra family plans to build up a luxury apartment project consisting of a hotel, condominium and villas for sale at $2-3 million each on a 160-rai plot on Mai Khao beach in Phuket in 2009. As per an industry source, the project was not associated to the family's property arm, SET-listed SC Asset Corporation Plc.

''If SC were to build up resort in tourist hotspots outside Bangkok, it would take a few years, not in 2009. This may be the family's personal investment,'' said SC vice-president Kree Dejchai.

The real estate consultant Colliers International expected the project would need an investment of minimum 10 billion baht, not including land cost. The market price for land plots on Mai Khao beach is approximately 10-12 million baht per rai.

Mai Khao is rising as a striking area to local and overseas investors because land prices are lesser than for other beachfront areas on the island. Patong beach, for instance, can cost 30-40 million baht per rai and accessible plots for new development are limited.

Mai Khao is just a 10-minute drive from the airport and the majority of the land is still detained by local people who do not want to hang around for price approval.

In the last decade, there was no fresh development on Mai Khao apart fromthat of the JW Marriott Hotel. Minor International Plc, which have the JW Marriott, plans to launch the luxury villa Anantara at prices of 20,000 baht per night in September 2008. By the end of 2008, it will build up a four-storey building housing a Villa Market supermarket and high-end restaurants to assist its guests.

The family of ex- Prime Minister Thaksin Shinawatra, purchased the Phuket plots with the help of its representatives late in 2007.

A Dubai-based group also paid out US$60 million to get 180 rai on Mai Khao from Thai owners and it plans to spend another $250 million to build up a Venice-style hotel. Additionally, a Hong Hong-based investor is acquiring 380 rai, and a joint project between local and foreign investors is taking another 100 rai to build up a 5-6 star hotel and luxury villas.

SC Asset, in the meantime, will be sticking to its foundation business of mid-market residential development in Bangkok for the time being, as per Mr Kree.

Property prices rising in Rayong Market area of Thailand

For the time being, the silent seaside town of Rayong is most likely known as much, possibly not always reasonably, for pollution as it is for property. Though, its thriving real estate market is starting to attract investors' attention.

Over the past three years, takings have definitely been inspiring. In older buildings, costs for a few condo units initially attained in non-performing asset sales have by now doubled.

A 36 sq m studio unit at the towering V.I.P. Condominium positioned at Mae Ram Phueng Beach that was promoted in 2005 for 500,000 baht is now costing 900,000 baht. After renovation, a 70 sq m one-bedroom unit has increased from one million to 2.5 million baht.

One of the champions in this movement is Jens Brochner Nielsen, CEO of D2 Real Estate, who says demand for this type of properties now far exceeding supply.

''Over the past two years we have sold around 120 units in the V.I.P. Condominium, and there is nothing for sale at this time,'' he said. ''It's correct that owners will put up these condominiums again for sale in the resale market however there are no NPLs anymore.''

He says the development's reputation replicates how far the well-liked observation of Rayong varies from the truth. In his analysis, pollution from the Map Ta Phut industrial estate is less persistent than normally assumed. The region's eastern side is generally agricultural and "very clean''.

Even the seabed of Mae Ram Phueng Beach, where plenty of high-rise condominiums are situated, is confined and dirty water cannot be released there.

However also key to Rayong's demand is a cost point that remains low in comparison to other resorts _ in spite of the rises of the past three years.

''Costs have certainly increased in Rayong although they have not reached the top so far and even if we go into a slump _ when costs generally decreases in Thailand _ in Rayong they will remain steady,'' said Mr Nielsen.

Medium Priced Condominium Sales in Bangkok Continues To Be Steady

While the rate of fresh launches of high-end condominium market has decreased, extensions of the BTS and MRT have driven new development in the middle and upper-middle parts in central Bangkok. Significance of the inner north area of Bangkok has heated up with huge increase of both supply and demand, as per the international real estate services firm, Jones Lang LaSalle.

Jones Lang LaSalle’s research intimates that most recent units launched in Bangkok since 2007 are located in the middle and upper-middle parts, consisting of comparatively smaller unit sizes -- studios and one-bedroom units. In 2007 alone, 11,480 units were launched in fresh projects. Approximately 50% of the fresh units launched are situated in the inner north area of Bangkok.

The preface of new supply in Bangkok has been driven by probable demand for medium priced condominiums in closeness to bunch transportation access. Actually, few projects in high-demand areas like Phaholyothin and Lad Prao were supposedly sold out within a week of launch. The Phaholyothin area has turn out to be one of the most well-liked areas, given its suitable way in to the BTS sky train and more plentiful facilities in the area.

In the luxury and high-end areas, developers have turn out to be more conventional, as proved by the decreased growth rate of fresh launches. The number of fresh units launched in the luxury and high-end areas in 2007 goes down to 40% from 2006. This decrease reflects the shortage of probable sites suitable for high-end condominium developments and developers.

Determined by increased sales in the middle and upper-middle segments, the sales rate for marketed projects is now approximately 80%, which is 70% in early 2007. The total number of units sold in 2007 was 12,300, exceeding the number of fresh units launched during that year.

Property Ownership in Thailand

In Thailand there are basically two types of Property ownerships. One is Individual property ownership and second is corporate property ownership.

Individual Property Ownership in Thailand
Normally, foreigners may not possess property in Thailand. There are a few exceptions to this law, which are related to condominiums and BOI (Board of Investment) promotions to permit corporate housing in selected areas, dependent on observance with investment terms of the BOI promotion and condominium ownership. There is time and again talk of a few changes in the law which will let foreigners to possess land; it is improbable that this will take place anytime in the near future. The patriotic approach to land possession is so engrained in the law and the Thai culture that is doubtful to overturn. That being said, one former Minister of the Interior said, “I don’t appreciate all this excitement about foreigners possessing Thai land, it is not as if they will take carry the land with them when they leave!”

Lately in 2003 with the beginning of the Elite Card, foreigners who meet the criteria for this card may buy land in some of the specific areas in the country for their own use. The price of an Elite Card is Baht 1 million.

Corporate Ownership of Property
Thai corporate structures are quite comparable to western corporate structures. Thai law gives permission to PLC’s, LLC’s, Limited Partnerships, Ordinary Partnerships, and a range of other types of corporate bodies. Once these are created, they are referred to, in Thai legal terminology, as Juristic Persons.

Juristic Persons in Thailand, which are possessed by a Thai majority, are regarded as in terms of property ownership, to be a Thai person and as a result, may possess property in Thailand. Note that equitable ownership, which Thai law addresses, does not inevitably associate to actual control of the Juristic Person. The most admired form of corporate land ownership is the Limited Liability Company (LLC).

Foreigners Buying Condominiums

For foreigners to be suitable to buy a condominium in Thailand they have to make available a proof to the Land Department that the finances in foreign currency have been dispatched from abroad. Devoid of such confirmation the Land Department will not authorize the transfer of possession to the foreign purchaser.

While purchasing a condominium you have to be a little bit careful. You should read the following instructions with awareness and pursue them correctly to make certain that you don't face any problems in the future. The Thai authorities are not flexible on this subject.

Advices to Overseas Condominium Purchasers on Remitting Funds from Abroad

1.Remittances must be sent in just the same name as that on the purchase agreement, i.e. if Alfred Rose is the buyer then the name Alfred Rose must be there on the remittance advice. A. Rose or Rose Enterprises are objectionable.

2. Transfers of funds should be done in foreign currency only and not in Thai currency (Baht), i.e. if you are operational in US Dollars then remit in US Dollars. Never remit in Thai Baht.

3. The bank being paid the amount should be intimated in advance that the transfers will be done and you will have to ask for a transfer certificate to be given away to the Land Department at the time of transfer of the possession.

4. The intention of the remittance should be declared on the remittance advice. It should be written as “For the Purchase of a Condominium”.

5. If the receiving bank is that of the developer or seller just make sure in advance that this bank will provide you with a transfer certificate.

Sales of Condominiums Dependent on Four Types of Taxes

In Thailand, foreigners are allowed to own condominium units with less than 49 % of the total area of a condominium building. On the other hand, overseas buyers are needed to transfer the funds for the procurement from abroad or take out the money from their local nonresident bank account.

Purchasing a condominium may appear comparatively easy. There is generally a cooperative sales agent all set to help in completing the documentation for you to sign on the dotted line. When it comes time to sell, though, it is significant that you prepare yourself with a fundamental understanding of the prices linked with a sale, with the intention that you can take these into concern when agreeing a price.

The sale of a condominium is dependent on four types of taxes and fees that are each paid to the related government office: government transfer fee, specific business tax (SBT), stamp duty and withholding tax. Under the law, only the government transfer fee is shared evenly between the consumer and the seller, and the left over taxes are the liability of the seller.

The computation of the government transfer fee is quite simple, with the amount payable 2 % of government evaluated value irrespective of the genuine selling price.

The SBT is a special tax on a few business transactions. It applies to the sale of a condominium by a person at the rate of 3 % of the government evaluated value or sale earnings, whichever is more. This tax is to be paid if the condominium is sold within one year of purchase if the individual has registered the condominium as his or her official residence in the government household registration system or if the condominium is sold within 5 years of purchase in other cases.

The stamp duty is to be paid to all condominium sales that are not dependent on SBT. The rate is 0.5 % of government evaluated value or the selling price, whichever is more.

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.

Strong Demand Helps To Sell 50% of Units at Pattaya Project of Major Development

With strong demand for apartments in Pattaya (Thailand), Major Development has been able to profitably sell 50 % of the units at its luxury condominium project, Reflection Jomtien Beach Pattaya.

This project is of approximately Bt3.3-billion and was launched in the second quarter of 2008 and makes available 330 units. The project targets both local and overseas consumers, Major Development managing director Suriya Poolvoralaks said.

Research by the company revealed that 5 million foreigners visit Pattaya once or more than once every year. There is a strong demand from overseas buyers seeking a second house or a retirement house in Pattaya. This is for the reason that projects in Pattaya gives more amenities and the island is only just an hour-and-half's drive away from Bangkok.

Major Development's project is situated on Jomtien Beach. It mainly has the 55-storey Oceanfront Tower with 102 units and the 42-storey Oceanview Tower with 228 units.

The project makes available six kind of units: one-bedroom units with utilization area between 58 - 60 square meters; two-bedroom units with utilization area between 109 - 110 square meters; two-bedroom duplex with utilization area of 96 square meters; three-bedroom units with utilization area of 205 square meters; three-bedroom duplex with utilization area ranging from 181 - 202 square meters; and, penthouses with utilization area ranging from 179 - 340 square meters.

Prices of the above mentioned units begin from Bt100,000 per square meter. The project is most likely to be completed by 2011. "We think our project will definitely attract home buyers as they can have a beautiful view of the beach from their room and feel close to nature," Suriya said.

Firms Consider Ways to Attract Buyers amid Likely Increase in Interest Rates

With the minor achievement of the government's economic package and a hike in interest rates on mortgage loans expected, developers are considering a change in plan for the second half of 2008.

The trouble of home-buyers will increase around 5-6 % because of increasing rates and elevated apartment prices. This will reduce their interest in property investments in the second half of 2008. Keeping this in mind, developers are trying hard to look for new ways to stir things up on the sales front.

Land and Houses is preparing to stick to its policy of making available apartments at initially predetermined construction prices, in order to attract consumer. It has priced apartments at Bt 3 - 5 million. The developer hopes the low-cost Bangkok apartments and government tax incentives to increase sales and assist the company meet its sales target of Bt21 billion in 2008.

Land and Houses director and senior executive vice president Adisorn Thananun-narapool said elevated inflation and the predictable hike in interest rates were not the only aspects that would lower home-buyers' procurement power. Worsening buyer buoyancy will also play a significant role in keeping them from house hunting, he said.

Asian Property Development plans to decrease sales of condominium projects for which the company has required environmental-impact-assessment licenses. This is for the reason that condominiums take longer time to build. "This approach will protect consumers if the projects do not pass the assessment or there is requirement for any modification in building plans," a company source said. The developer is preparing to launch 10 projects worth a combined Bt18 billion in 2008, among which five worth Bt10 billion are condominiums along the Skytrain.

Preuksa Real Estate is concentrating on projects of Bangkok apartments in Bangkok's central business district and on the outer reaches of the city. The company is purchasing construction materials beforehand and speeding up projects, with the intention of keeping prices down.

Developer Plans To Invest In Bt 7-Billion Projects on Praditmanutham Road

Property developer KE Land is planning to put approximately Bt7 billion on four projects around Praditmanutham Road, which is situated under the Ekamai-Ram Indra Expressway, in the next 3 years.

The company's managing director Kaveepan Eiamsakulrat told that half the sum would come from the company's cash flow and the left over would be loaned from a bank.

The four projects are two retail centers, a detached apartment project and an office building. One of the retail centers designed is part of the second stage of the high-end Crystal Centre. The second project, the Bt 2-billion Crystal Design Centre, is going through construction and is likely to be complete by May or June of 2009. The combined operation space of the retail projects will be somewhere between 40,000 and 50,000 square meters.

Sale of the Bt1.5-billion luxury detached apartment project, Grand Crystal, has started. The apartments will most probably be ready for delivery in 2009. The office project will offer utilization space of approximately 20,000 square meters. The Bt 2-billion project will be complete by 2009.

KE Land has possession of approximately 200 rai of land on Praditmanutham Road. The two retail centers and detached apartment project will occupy only 42 rais. The company is making arrangement to take up three additional projects spanning 100 rais in the area. The rest will stay undeveloped.

Kaveepan said the company is paying more attention on projects that produce rental income for the reason that land prices on Praditmanutham Road are too elevated currently to develop apartment projects for sale.

"We are paying attention in developing condominium projects although are not planning any now as it is still too early to build up those type of projects on the land. However in the next 3-5 years, we will start on those type of projects on Praditmanutham Road," he said.

The company hopes rental income will produce around 70 % of its revenue by 2010. The remaining will come from the sale of apartment projects.

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.