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.

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.