Le Luk Condo

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

“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.

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)

Casa Ville

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

Uthai Uthaisangsuk, the company’s senior executive vice president, said demand for mid- to low-priced condominiums, lower than 80,000 baht per sq m, was strong with a take-up rate of 100% in the first half of the year.

“All projects in this segment were sold out within the first six months of being launched,” he said yesterday.

“Our five new condominium projects being launched in the rest of the year will tap this segment.”

Sansiri’s research found there was demand for 23,000 condominium units in the first half, for both newly launched and existing ones, up from the same period last year as demand shifted from low-rise to high-rise units.

The developer, which has delivered a total of about 12,000 condominium units to buyers to date, expects condominium demand in the second half will be more than 20,000 units with 50,000 units for the whole year.

Meanwhile, the launches of about 20,000 units have already been scheduled for the second half with another 10,000 additional units expected.

The take-up rate for condominiums last year was more than 30,000 units, about 49% of the total market, followed by townhouses at 30% and single houses at 20%.

Sansiri will market its D Condo brand for the low-end segment priced at about one million baht for a 25-square-metre unit. The projects will be located close to the skytrain extensions in the Taksin and Sukhumvit Road areas.

The developer’s new properties will comprise four projects with units priced from 80,000 to 100,000 baht per sq m and one luxury project with units priced above 100,000 baht.

During the first half, Sansiri launched two new condominium projects priced more than 80,000 baht per sq m with units starting at 4 million baht for 30 sq m. The average price was 6.5 million baht a unit. About 650 units have already been sold at the two projects worth combined 4.5 billion baht.

For the whole year, Sansiri’s average unit price is expected to be about 4 million baht as a larger number of cheaper units will be launched in the second half.

Mr Uthai said there should be a strong recovery in sentiment in the property market in the second half of the year, given the more stable political situation and an improving economy with higher exports and farm prices, bolstered by estimated economic growth of 4.5%.

The company has targeted 7 billion baht in presales of condominiums in the second half, up from 5 billion in the previous six months.

During the first half the developer transferred units totalling 9 billion baht. Of the total transfer value, 5 billion represented single houses and townhouses with condominiums accounting for 4 billion.

The company expects revenue of 16-17 billion baht for the full year.

Sansiri next month plans to launch Wyne Sukhumvit, a new condominium project worth 1.85 billion baht. Located in the Phra Khanong area, it will comprise 460 fully furnished units sized from 30 to 65 square metres with prices starting at 2.9 million baht a unit.

Emporio Place

TCC Capital Land is a joint venture company formed in late 2003 between TCC Land, a Thai development company owned by liquor tycoon Charoen Sirivadhanabhakdi, and CapitaLand in Singapore. According to its original plan, the company was planning to launch two condominium projects worth THB 1 billion (US$ 31 million) and THB 1.5 billion (US$ 46 million) respectively.

However the company’s chief executive officer Soammaphat Trisorat said that without funding from their Singaporean partner, the new projects will be developed by TCC Land alone.

“Our partner is quite concerned about the situation in our country and would like to hold its investment for a bit until they are more certain about it. But it won’t stop us from launching some new projects this year. We are here and well aware that the Thai property market has significantly improved in the past month,” said Soammaphat, who’s also executive director of TCC Land.

In the first half of 2010, TCC Capital Land generated sales of approximately THB 1 billion (US$ 31 million). It currently has a sales backlog of THB 9 billion (US$ 278 million), over THB 5 billion (US$ 154 million) of which is expected to be sold by the end of this year, with the rest to be sold next year.

Developers planning to launch new condominiums with units priced from 50,000 to 79,999 baht a square metre should put off or delay the launches to next year, he said.

“Uncertainty remains in the market,” said Mr Samma. “The global economy is unsteady and interest rates are on an upward trend.

A recent REIC survey found developers are planning to launch 60,000 condo minium units in the second half.

The REIC yesterday released its half-year condominium price index, which surveyed 100 condominium projects in Bangkok in March and April and compared prices with those in last year’s second half.

The condominium price index for all segments in the first half of this year was 101.43, up 1.43% from last year’s second half. The largest increase was in units priced between 50,000 and 79,999 baht a sq m, which rose by 3.42% to 103.42.

“The mid-priced segment is real demand. Investment or speculation is very slight,” said Mr Samma. “Buyers in this segment were less affected by the economic slowdown and political prob lems.” Developers of middle-market projects were able to control the market, so prices were rising higher than in other segments.

Meanwhile, the price index of units priced below 50,000 baht a sq m was 101.47, rising by 1.47%, as buyers are highly price-sensitive. In the high-end segment, with units priced from 80,000 baht per sq m, the index declined by 0.29% to 99.71 as most buyers were foreigners who were scared off by local politics and had their spending power clipped by the global economic crash.

“The index’s average growth of 1.43% showed a healthy, good market. A bubble will be signalled by double-digit growth in the index consecutively for three or four years like what happened in the US from 2001 to 2005,” he said.

The housing-developer sentiment index in the second quarter was at 49.9 points, the first decrease since last year’s first quarter and down from 59 in the first quarter of this year. Listed companies’ sentiment posted the largest decrease, from 67.6 to 53.7, while the index of non-listed firms dropped to 46.2, from 50.5.

The developers’ expectation index for the next six months was 68.9 points, up from 63.4, with listed firms at 77.5, up from 70.5, and non-listed firms at 60.3, up from 56.3.

“Most developers predict improvements in all factors except cost of development, which will be on an upward trend by year-end,” Mr Samma said.

The industry in the latter half would continue to be driven by strong local demand while foreign buyer sentiment would remain poor as western economies are sluggish, said Anukul Ratpitaksanti, deputy managing director for asset management.

“Since the beginning of the year, there was much worry over the impact of the political turmoil, but the overall market in the first half turned out to be better than expected,” he said.

The tax breaks, which expired yesterday after being extended twice, helped spur demand and offset the poor sentiment caused by politics.

Plus Property recorded transactions worth 1.5 billion baht in the first half, compared with 2 billion for all of last year. Sixty percent of last year’s transactions came from rental projects and 40% from sales.

The company forecasts its sales will grow by 15% to 2.3 billion baht this year.

Mr Anukul said the industry, however, still hoped the government would continue its support in terms of tax cuts to keep stimulating the market, which could also benefit the economy and related industries.

While foreign buying has been weak for three years, the rental market is still doing well, particularly in tourist destinations, Mr Anukul said.

The condominium rental market in Bangkok is also expected to remain stable given the large amount of new supply in the past few years. Existing condos have reduced rental rates to stay competitive with new projects.

Average monthly rental rates of condominiums near mass-transit stations such as Phra Khanong or Taksin are estimated at 10,000 to 30,000 baht a month or 300-500 baht per square metre. Those in the CBD areas such as Sukhumvit sois 24-26 cost about 600-800 baht per sq. m.

Rental yields of condominiums in Bangkok have eased to 5-6% per year when compared with 8-9%, but Mr Anukul said they remain attractive when compared with bank interest.

He added that there was only a small gap between yields of new projects and existing ones as new projects are facing rising costs of land.

Real demand makes up half of the condominium market in Bangkok while the other half is demand for investment.

The Lat Phrao to Ratchadaphisek area came first in the market this year in terms of new condo supply, with about 70 projects introduced in the last five years.

Plus Property currently has 15,000 listings worth 150 billion baht in hand. Of the total, 40% belongs to its parent company Sansiri Plc, and others include 500 land plots.