Asia Property News » Bangkok

Thai Property Bubble Dismissed

admin — Wed, 10 Nov 2010 02:21:52 +0000

Thailand property

The Bank of Thailand has played down concerns over the country’s record foreign direct investment fuelling a property bubble.

“Many foreign investors still choose to invest in the stock market while some choose to invest in bonds,” Bank of Thailand’s domestic economy department director Methee Supapong said on Monday according to the Bangkok Post.

The amount of foreign investment in the country’s real estate remains small, due to strict foreign ownership laws in Thailand that largely forbid foreigners from freeholds and restricts leases to 30 year periods. Investors have long called for these restrictions to be eased, but, Thailand, in contrast to some of its larger neighbours, Singapore and Hong Kong, has not become a speculators market. Bangkok property prices rose over 4 per cent over the last year, but Thailand has enjoyed relatively stable market prices since its recovery from the 1997 crash.

The Bank’s comments come several days after Supavud Saicheua, managing director and head of research of investment brokerage Phatra Securities warned Thailand’s property and stock markets run a risk of facing a bubble burst if foreign capital continues flowing into Asia.

With further liquidity expected in the market, partly due to US Federal Reserve measures, some Asian economies are expected to grow 7.7 per cent on average this year. Anticipating this drive for investment and in an attempt to slow the Baht’s meteoric rise the Thai Government has recently introduced capital inflow taxes that have deflected some investment.

However, with market forces exceeding the government’s own, inflationary pressure is still strong in the region, heightened further by the US dollar’s expected weakening against the Baht with the injection of USD 600 billion by the Federal Reserve.

SME developers need to know their limits

admin — Wed, 04 Aug 2010 04:59:38 +0000

Small property developers with little experience need to obtain sufficient information before making an investment, according to industry experts.
Tawatchai Sudtikitpisan, president of Kiatnakin Bank Plc, said big developers have an advantage not only in fund size but also access to information and research from their large client base.
“SME developers that may have completed three or four projects are still limited compared to big developers who have gone through more than 20 projects,” said Mr Tawatchai.
“Developing property from experience alone can be tough because the market changes fast and consumers are knowledgeable.”
Keerati Satasook, head of the Innovative Real Estate Development Programme at Thammasat University’s Faculty of Architecture and Planning, said SME developers need a new attitude.
“New developers who succeeded in other businesses may not be able to use the same methods in real-estate development,” said Mr Keerati.
For example, pricing in real estate is different from other products because if you unknowingly set the price too low, the product and the opportunity is forever lost, he added.
“In investment and loans, some businesses have learned that borrowing is not a good approach. But this is not the case in property,” he said.
Developers also need to know which projects are suited to their resources.
Kiatnakin has joined with Thammasat University’s Architecture department in organising an eight-week seminar, starting July 22, aimed at equipping SME developers with necessary information on property development.
The seminar content includes property development fundamentals, feasibility analysis of all project sizes, the property development process and property management fundamentals. The participants are 20 SME developers who are Kiatnakin’s loan clients.
Mr Tawatchai said the seminar should enable SMEs to compete with the big developers.
“SME developers who survive are those offering competitive products to the big developers,” said Mr Tawatchai. “What worries me is the ones who take up the business in the near future who need to keep up with the market.”
Thammasat University has also introduced an undergraduate programme in Architecture for Real Estate Development this year.
“It’s not enough for new architects to have only architectural design skills. They also need to understand business plans and property management,” said Asst Prof Santirak Prasertsuk, dean of the Faculty of Architecture and Planning.
The faculty aims to enroll about 90 architects in both the undergraduate and graduate programmes in real estate development each year. The graduate programme has been running for three years under the name Innovative Real Estate Development with about 40 students each year.
Source : bangkokpost.com

Property sector tops consumer complaints list

admin — Tue, 03 Aug 2010 03:06:36 +0000

The most number of complaints received by the Office of the Consumer Protection Board (OCPB) are against Thailand’s property sector, the office revealed yesterday.

In the first nine months of this fiscal year beginning October 2009, a record 2,900 complaints were filed against property firms, or 48.3 per cent of a total of 6,000 complaints.

OCPB secretary-general Niroth Charoenprakob said all complaints against property firms were about their failure to honour contracts.

Some of the complaints were about property firms not delivering the residence to the customer; firms unable to proceed with construction of the project when they face financial problems; not building infrastructure as promised in the advertising; not returning the down payment when the bank rejects a customer’s loan application.

However, OCPB has succeeded in dealing with 80 per cent of the complaints through negotiations, while the other 20 per cent have taken their cases to the civil court.

Niroth said that in all the cases filed in court, the customers will win and get pay back their money though it could take one to two years.

To help customers select the best property firms, OCPB has launched a campaign to find the best property firms by awarding stars to companies under the ‘The Star Property firm’ plan.

This scheme looks at five areas to find the best property firms. They are: financial structure, experience in property sector, design and construction standards, social and community responsibility, and customers’ application.

The 10 property firms who received ‘Star Property Firm’ rankings this year are: Pruksa Real Estate, Supalai, LPN Development, NC Housing, Charoem Nakorn Co, Home Place Development, Green Asset Co, Kanda Decor, Success Property, and Big 3 Asset. They were selected from 18 property firms who applied for the classification.

Niroth said that although there have been some complaints against property firms with the star classification, they are very few.

However, OCPB can withdraw the star if property firms fail to keep their commitments to their customers and the customers takes their cases to the court, he said.

Auto sector is behind property as the one with the most complaints, followed by the service sector, and consumer products.

Le Luk putting Phra Khanong on the map in Bangkok

admin — Tue, 03 Aug 2010 03:02:33 +0000

Le Luk Condo

Le Luk Condominium, a development in the Phra Khanong area of Bangkok by W-Property, has launched a sales campaign for the remaining 25 unsold units in the 285 unit project. W-Property is also moving forward with plans for retail space at Le Luk.

W-Property hopes to advance Phra Kanong as the new “hotspot” residential area in Bangkok with Le Luk, which has so far generated sales of THB900 million (US$27.85 million).

“We saw the potential of Sukhumvit-Phra Khanong a long time before we launched Le Luk Condominium. Today we celebrate the success of Le Luk Condominium and the launching of Le Luk as a new landmark in Sukhumvit-Phra Khanong,” said Mr. Wichai Poolworaluk, president of W-Property.

Le Luk has a value of THB4.4 billion (US$136.12 million) and is located on 9 rai of land. Units range in price from THB3.3 million to THB15 million (US$102,062 to US$463,922) in the condo development, which features a communal infinity pool, party room, gym, green area, reading cafe, and kid’s room.

The new sales campaign, called “7 Best Wishes”, throws in seven special offers for buyers, including furniture, appliances, and 10 MB Hi Speed internet for one yea

“First ever” UK property show in Bangkok

admin — Tue, 03 Aug 2010 02:58:29 +0000

London Property show in Bangkok

Buyers and investors in Thailand are being targeted in what is believed to be the first ever ‘United Kingdom Property Show’ in the Thai capital later this month.

Singapore company SQFT Global Properties, formerly known as OrangeTee Global Properties, will be showcasing projects from “many U.K. Developers” at the event, including what it is describing as the “First ever launching condominium” in Bangkok. One property being promoted at the event will be The Pulse, a condominium development in the Colindale area of north west London.

The organisers say that loans of up to 80 per cent will be available at the event for Thai residents. Other promotions will include free legal fees and free furniture for selected units.

Andrew Batt, Managing Editor of Property Report South East Asia, said: “Exhibitions and launches like this are common in places like Singapore and Hong Kong. The organisers will no doubt have recognised that overseas properties are increasingly attractive to Thai buyers, and I am certain we will see similar events in future months in Bangkok.”

Recent surveys have indicated that buyers from Asia account for more than one third of all new-build properties in London, with most from Hong Kong, mainland China and Singapore. No figures have been released regarding how active buyers from Thailand have been in the United Kingdom property market.

The United Kingdom Property Show will take place on July 31 and August 1 at the the Cove Room, Sheraton Grande Sukhumvit, Bangkok, between 10am and 7pm.

SOURCE: Property Report

Pruksa – committed to constant growth

admin — Mon, 02 Aug 2010 04:00:05 +0000

PRUKSA REAL ESTATE PLC’S president & chief executive officer Thongma Vijitpongpun.
“To achieve our revenue target of Bt100 billion in 2017, we have to be a multinational firm,” Thongma Vijitpongpun, president and chief executive officer of Pruksa Real Estate, the market leader among listed property firms with pre-sales of Bt20 billion in the first half of this year, said in an interview with The Nation’s Somluck Srimalee last week. He shared his ideas on how he is managing his business in order to achieve this goal.
How do you intend to become a multinational firm?
We have set up a team to study how to expand our business overseas. Vietnam, the Maldives, and India are the locations of our pilot projects, which will start to generate income this year. However, they will generate less than Bt500 million, compared with our pre-sales target of Bt29 billion this year.
We also are studying home-buyers’ behaviour and demand in Indonesia and Oman.
Indonesia has the potential to be the next country for our business expansion, because it has a growing population and the purchasing power to buy residences. Meanwhile, Oman’s potential depends on research. This project was initiated at the suggestion of an Omani businessman we invited for a visit in the first half of this year.
In China, we also have strong interest to expand our investment, but under China’s rules, when you develop a residential project, you have to use local constructors. As a result, if we expand our investment in China, we may only be involved in management and sales projects.
Why did you set the business goal of being a multinational firm?
That was not our business plan when we started in 1993. At that time, we thought that if we could drive our sales to nearly Bt1 billion, we would be a success. Then we faced the financial crisis of 1997, and the question became one of how to survive.
After that, we set yearly business targets until two years ago, when we asked ourselves how to drive our business with sustainable growth averaging 25 per cent a year in a way that would not be disrupted by cyclical problems like economic crises, political problems, etc.
To manage our business to achieve that goal, our team decided that we have to manage our business risk by expanding our business both here and overseas. This will balance our business risk. This follows our business expansion from the lower-income market 10 years ago, to the middle and upper income markets.
Currently, our customers cover all segments. That’s why the company was not badly hurt by the political problems in the second quarter of this year, and was able to achieve pre-sales of Bt20 billion in the first half of this year, which exceeded estimates.
Following this model, if we want to maintain business growth of 25 per cent every year from now till 2017 that means we have to expand overseas. The company also has to balance its income by targeting 60 per cent from the domestic market and 40 per cent from overseas by 2017.
Why have you set your business growth target at 25 per cent?
In my experience, most businesses have a life cycle: from starting, to high growth, to stable growth, to decline. With Pruksa Real Estate seeing strong growth, if we do not do anything, we will decline. If we don’t want to be like that, we have to change our business strategy from year-to-year business plans to setting a goal of sustainable growth averaging 25 per cent a year.
This goal is a challenge for us. If we want to achieve it, we will have to change ourselves. All related parties, such as shareholders, staff and customers, will benefit in the long term.
As management, we are committed to creating wealth for all parties, not just for ourselves.
[Pruksa recorded pre-sales of Bt20 billion in the first half of this year and plans to launch 50 to 60 new residential projects this year.]
How are you preparing your business structure to support your business growth plan?
We review our business structure all time. We have decentralised our management from the president and CEO to six senior executive vice presidents. Three of the six are authorised to manage multi-residential brands, and the other three manage back-office affairs, including construction systems, prefabrication manufacturing, accounting, information technology, etc.
Meanwhile, all of our multi-residential brands have business units to take care of the brand. The company now has 15 business units authorised to manage business units by themselves.
This business model is easy to manage and supports our expansion. Our overseas organisational structure will be flexible and depend on the rules in each particular country.
We have set up training systems and promote our staff to focus on their natural abilities.
What risks do you face and how do you manage them?
In the more than 15 years since I founded this business, I have faced at least two economic crises, and multiple political changes. These have been the major risk factors, but we have survived and recorded strong growth every year by learning how to manage risks on an event-by-event basis.
For example, in 1997 we faced the financial crisis. Our business strategy focused on how to survive the crisis. We didn’t suffer foreign-exchange losses, and we were focused on the lower-income market, which was less affected by that crisis than other sectors.
Then Thailand faced the global recession in 2008, which didn’t affect us too badly because our customers now cover all market segments.
The key to managing our business risk is managing cash flow and monitoring the market at all times. When we know who our customers are, we can manage our business in line with customer demand.
For example, in 1997, we focused on townhouses. In 2001, we entered the market for single detached houses. In 2002, we developed prefabrication systems to speed up construction of residences, reducing management costs and speeding up cash flow by allowing us to transfer ownership to our customers within 120 days.
In 2009, we started to expand our business overseas to balance our portfolio.
Expanding our investment overseas also limits our investment, because we must have sufficient capital in case our expansion results in a loss.
That is not always a successful formula, but it depends on the environment.
Do you have any plans to move into other property sectors such as hotels, offices, or retail?
For the time being, we remain focused on residential projects, in which we have long experience.
Who are your main competitors, now that you are the market leader?
We are our own main competitors. We don’t think of competitors as being out there in the marketplace. Strive constantly to improve: That’s my motto. It has been since the day I got into this business

Bangkok property sales strong despite political unrest

admin — Mon, 02 Aug 2010 03:58:39 +0000

BANGKOK — Investments in Bangkok’s property sector were robust in the first half of 2010 despite protests that paralyzed parts of the capital and ended in a looting and arson rampage, a leading property broker said Tuesday.

“For the past six months, investment activity in the Bangkok property market was buoyant,” said Umpon Thepnumsommanus, director of investment at the property services company Jones Lang LaSalle Inc.

The firm said it handled transactions worth 3.5 billion baht (US$109.4 million) during the six-month period.

Violent anti-government protests were staged in Bangkok from March 12 to May 19, leaving 90 people dead, 1,885 injured and culminating in a looting and arson rampage that left 36 buildings in flames.

The good news was that the unrest might have persuaded some property owners to sell their assets at reduced prices, Jones Lang LaSalle said.

“As the political unrest that intensified between April and May softened investor sentiment, sellers adopted a more compromising approach with their asking prices, allowing faster sales transactions,” Umpon said.

Bangkok property owners are somewhat notorious for never reducing their selling prices, no matter how severe the economic or political crises battering the kingdom.

Another factor hastening sales during the first half of the year was the approaching expiration of the government’s property stimulus package, such as reduced transfer fees on transactions.

“Many sellers became more flexible during the negotiation process in order to complete the sale and have the property transferred in time prior to the expiry of the property stimulus package on June 30,” Umpon said.

While property sales were strong in politically challenged Bangkok, they were “subdued” in Thailand’s coastal holiday destinations such as Pattaya, Phuket and Samui, the company said.

Jones Lang LaSalle noted that sales at Thailand’s beach resorts have traditionally been dominated by foreign investors, who have been bearish since the global financial crisis hit in late 2008.

Rays of recovery – Bangkok property investment surpasses THB 3 billion in H1

admin — Mon, 19 Jul 2010 03:18:50 +0000

Bangkok Post reported that investment activity in Bangkok’s property market remains robust, reaching THB 3.5 billion during the first 6 months of 2010 despite political unrest.

Mr Umpon Thepnumsommanus investment director at property consultant Jones Lang LaSalle said that the transactions concluded by the firm were for the sale of a portfolio of office condominium units at Sermmit Tower for THB 1.5 billion early in the year and a number of prime land plots. Supply was in part fuelled by some corporations restructuring their portfolio by disposing of non core assets.

Demand came from property developers buying more land for future developments, while some investors remained keen to buy into income generating assets like office buildings, given the low interest rates. The narrower gap between the price expectations of buyers and sellers was another driver of demand.

Mr Umpon said that “As political unrest intensified between April and May, softening investor sentiment, sellers adopted a more compromising approach with their asking prices, allowing faster sales transactions.”

He said that several sales in the second quarter were accelerated due to the expiration of the government’s property stimulus package. Many sellers became more flexible during the negotiation process in order to complete the sale and have the property transferred before the tax breaks expired on June 30th 2010.

The acquisition of land and sites for redevelopment by property companies accounted for much of the investment in the first half. Land plots located no further than 200 metres from a BTS, MRT or Airport Rail Link station tended to receive especially high interest.

Mid priced condominiums with convenient access to mass transit systems remained very popular, as reflected by the fast sales rates achieved by many off-plan or newly launched projects in close proximity to mass transit systems. This has encouraged demand from property companies for land with potential for condominium development.

He added that “The trend of property development companies securing prime land for condominium development will continue. The recent issuances of debentures by a number of major listed residential property developers show that these companies have been well prepared for new investments.”

However, the property markets in coastal holiday destinations like Pattaya, Phuket and Koh Samui remain subdued. Dominated by foreign buyers, investment activity has witnessed a marked slowdown since the global financial crisis escalated in the final quarter of 2008, he said.

Meanwhile, many parts of the world have seen signs of economic recovery, so some international investors are regaining their financial strength and expected to come back into Thailand’s holiday property markets in the near future.

(Sourced from www.bangkokpost.com)

Foreign investors will return to Thailand’s coastal resorts

admin — Mon, 19 Jul 2010 03:15:59 +0000

The cyclical nature of the property market in Thailand’s coastal resorts means foreign investors will return – sooner or later.

Unlike the constant demand for real estate in Bangkok, the property markets in Thailand’s coastal holiday destinations such as Pattaya, Phuket, and Samui have remained subdued during the first half of 2010.

Professional real estate services firm Jones Lang LaSalle said that, dominated by foreign investors, investment activity in these areas has witnessed a marked slowdown since the global financial crisis escalated during the final quarter of 2008.

But as many parts of the world have seen signs of economic recovery, a number of international investors are regaining their financial strength and are expected to come back into Thailand’s holiday property markets in the near future.

In addition, Jones Lang Lasalle noted, there are several good resort properties and land offered for sale in these markets. Selling prices are generally very attractive with some properties being offered for sale at a price discounted by between 20 and 30 per cent from the peak levels seen three or fours years ago.

Umpon Thepnumsommanus, Director of Investment at Jones Lang LaSalle, said: “Smart investors understand the cyclical nature of property markets. Sooner or later, these investors will come back.”

Q House enters Bangkok’s condo market with Casa

admin — Fri, 16 Jul 2010 09:29:51 +0000

Casa Ville

Casa Ville, a subsidiary of Thailand’s leading property developer Q House, is jumping headlong into Bangkok’s competitive condominium market with the launch of its 8-storey project – Casa Condo Ratchada-Thaphra.

Located on a two-rai plot of land very close to both the BRT and BTS rapid transit systems, the THB540 million (US$16.7 million) project consists of two residential buildings, featuring studio and one-bedroom units ranging in size from 25 to 59 square metres. Price start from THB60,000 (US$1,855) per sqm.

The project is expected for completion and ready to move in by Q3/2011, and pre-sales open on July 17-18.

SOURCE: Property-Report