Kanana Katharangsiporn

Phuket’s property development boom is expanding to four small nearby islands with total project investments of around 20 billion baht, says Risinee Sarikaputra, head of research at property consultant Colliers International Thailand.

“It’s a trend toward private islands,” she said.

“World celebrities, Hollywood stars and people in the ultra high-end segment love privacy and prefer buying a resort on a private island where no one can interfere with them. That’s why many property developers move to small islands.”

She said the largest investment on Phuket’s neighbouring islands is from the huge Indian conglomerate Tata Group’s Taj Hotels Resorts and Palaces on Koh Lone, located on southeastern Phuket near Chalong Bay.

The Indian-based hotel firm is investing almost 10 billion baht to develop Taj Exotica Resort and Spa on 125 rai, comprising a 100-room hotel worth two billion baht to be operated late next year. It will also include 19 villas priced between 128-384 million baht a unit, which is the first time the Taj has ever sold villas.

The second largest is an investment of Prime Minister Samak’s nephew Dilokpol Sundaravej and a Canadian partner that is developing Jumeirah Private Island Phuket worth around six billion baht on Koh Raet northeast of Phuket.

Another investment is on Koh Maphrao where a British investor late last year started developing The Village worth two billion baht. Of the total 62 villas for sale at prices between 18-45 million baht, 17 units are remaining.

This year there will be a development of a hotel and villas worth around two billion baht on a 180-rai site on Koh Mai Thon, southeast of Phuket. The owner is a group of local Phuket investors that are asking for a Board of Investment approval to allow the investment of foreign investors.

Ms Risinee said this trend also emerged in small islands in the Gulf of Thailand, including Koh Kood near Koh Chang where Six Sense opened Soneva Kiri resort. On Koh Tao near Samui an overseas fund will start an investment. and new hotel developments have started on Koh Phangan.

In Phuket, there are at least 17 residential projects in the pipeline with a total of 969 units worth more than 20 billion baht which will be completed in the next few years.

Land prices on Phuket’s west coast with good sea views climbed by 30-40% year-on-year but there is no availability of such plots of land for future development.

Land prices per rai in the western area average 35 million baht while they are 17 million baht a rai in the eastern area. However, the selling price of residential units in the east is about 130,000 baht per square metre while those in the west are 100,000 baht per sq m.

The trend of residential projects in Phuket is for projects integrated with hotels and managed by the same group that manages the hotel and the letting of property.

She added that Phuket tourism would soon vie with the Malaysian island of Langkawi as two new marinas will be added to the current three to offer a total of 800 yacht berths.

“Phuket is having high season all year long as tourists from the Middle East fill in during the low-season period between June and September, a time of hot weather in their region.”

Phuket property is also attracting South Asian investors. Last week institutional investors from Bangladesh and Pakistan with total funds of at least 10 billion baht asked the company to seek Phuket property projects in which to invest, she added.

For more information on our private island near Krabi, click here.

Phuket development shifts to private islands

Technorati Tags: Phuket development shifts to private islands

The Nation

Firms mull ways to lure buyers amid likely rise in interest rates

With the slight success of the government’s economic package and a rise in interest rates on mortgage loans likely, developers are mulling a change in strategy for the second half.

The burden on home-buyers will likely increase 5-6 per cent on rising rates and soaring home prices.

This will dampen their interest in property investments in the second half of the year. Keeping this in mind, developers are busy devising ways to stir things up on the sales front.

Land and Houses is planning to stick to its strategy of offering houses at originally stipulated construction costs, in order to lure buyers. It has priced houses at Bt3 million to Bt5 million. The developer expects the low-cost houses and government tax incentives to boost sales and help the company meet its sales target of Bt21 billion this year.

Land and Houses director and senior executive vice president Adisorn Thananun-narapool said high inflation and the expected rise in interest rates were not the only factors that would lower home-buyers’ purchasing power. Worsening consumer confidence will also play a major role in keeping them from house hunting, he said.

Asian Property Development plans to slow down sales of condominium projects for which the company has sought environmental-impact-assessment licences. This is because condominiums take longer to build.

“This strategy will protect customers in case the projects do not pass the assessment or there is need for a change in building plans,” a company source said.

The company is buying construction materials in advance and speeding up projects, in order to keep costs down. It recently put up 23 projects for sale and has also launched three-storey modern townhouses and single-detached houses at competitive prices.

LPN Development is planning to concentrate on low- and middle-income customers. The company is confident of meeting its income target of Bt7.5 billion to Bt8 billion this year. This is because 90 per cent of its projects undergoing construction are reserved.

It plans to launch a new Bt5-billion project in the Rama IX Road area, which will help its presales reach Bt11 billion for the whole year.

Meanwhile, Property Perfect is speeding up new project launches, raising prices and lifting up margins.

It plans to factor in increased construction costs this month and in the second half.

The company expects the move to push buyers who are otherwise reluctant to go for a house now to rush in and snap them up before prices rise.

The company predicts presales of Bt10 billion for the entire year, up Bt1 billion from previous projections, with the launch
of seven new projects worth a combined Bt20 billion.

It looks set to achieve presales of Bt3.2 billion to Bt3.3 billion in the first five months of the year, up Bt2 billion from the same period last year.

Developers eye change in plan, to boost sales

Technorati Tags: Developers eye change in plan, to boost sales

Source: WERACHON LAW OFFICE / Pattaya Today June 17 2008

THERE are pros and cons of buying a condominium unit in a brand new project, a brand new product is always good. However, it is advisable not to use your brand new brain to buy a condominium in Thailand because a brand new brain means that it has never been used. In Thailand, you have to use your brain more than you normally used it in your own country.

The pros for buying the brand new project are:

1. The starting price of a condominium unit in a brand new project is quite low comparing to the finished project. Many foreign buyers of a brand new condominium unit can easily make good speculative profits in the short term especially for a renowned project or well positioned.

2. Some demanding buyers feel obliged to check the construction from the foundation until finishing stage to see if the quality is in compliance with the specification.

The cons for buying the brand new project are:

1. Some developers may have problems with their contractors which may cause a delay in construction, and some unscrupulously construct more buildings in the common areas.

2. Some developers hand over condominium units, which are defective or units where the quality has not complied with the specifications.

3. If you have to make a down payment for one or two years, it is risky that a change of the economic situation could adversely affect the high profile developer. As we are aware “Everything is impermanent”. The cost of construction depends on many factors which sometimes suffer from an “Act of God” or “Force Majeur” which are beyond our control. Many developers become bankrupt by the laxity of their financial management, and a project becomes a “Non Performing Loan” (NPL) with a bank, you will be involved in a time consuming judicial process. You may not draft a contract requiring the Developer not to become bankrupt. The good developer should have a good financial record, e.g., Rattanakorn or Viwtalay who always keep their promise as goodwill which is their great assets.

4. Some crooked operators in the guise of developers may easily set up a “paper company” and put banners in an empty plot of land with a cabin sales office. They may arrange for the classy grand opening parties with good food and wine with a fancy show and a rhetorical MC to get reservation money from gullible foreigners and then disappear. If the crooked developers are foreigners, you cannot find out their whereabouts easily, because they just pack their bags and clandestinely leave Thailand.

We strongly believe in the old maxim that “Forewarned is Forearmed”. To avoid a legal dilemma, it is advisable to comply with the following advice:

1. It is advisable to have a due diligence search for the corporate and financial information of the company who is the developer of the project. In this regard, you may retain a qualified lawyer and accountant to check the corporate documents and balance sheets. You may verify who are the shareholders and directors, and some prudent buyers even check the credit background of each incumbent director. If the development project is financially supported by a bank or financial institution, you may discuss this with the bank or finance company concerned.

2. Most of good projects will have a signboard showing the details about the registration number of the land title deeds (Cha Nod) and a construction permit of the project. It is advisable to retain a qualified lawyer to check the details of the land with the Land Office to verify if the land for the project actually belongs to the developer. The mortgage on the land should be also checked.

3. With the title deeds and the construction permits, some prudent buyers check all the common areas and utilities to ensure that the developer will not use for its own commercial purposes, e.g., parking lots, recreation areas, club houses and swimming pool, etc. There are many developers using the common parking lots for the weekend market.

4. The developer of the project has to apply for the construction permits with the “Civil Works Office” (Sum Nuk Ngan Yo Tha) of the Pattaya City Hall. If the project is of more than 80 units, the developer will have to get a clearance certificate from the Office of the Environmental Protection, and it is advisable to check these permits have already been granted to the developer.

5. You should get a clear confirmation from the developer that the percentage of foreign ownership is not more than 49%. You cannot register the ownership of the condominium unit under your name if there is more than 49% foreign ownership in your project. This restriction is currently applied without exception. If the foreign ownership is more than 49%, many foreigners circumvent the restriction by setting up a Thai company to own the condominium. Incorporation of a company will be definitely burdensome for you to absorb expenses for incorporation plus preparation of annual balance sheet.

6. To register the ownership of the condominium unit under your name, you have to show the documents with the Land Registrar proving that the money you pay for the condominium unit is from your offshore source. Accordingly, you have to bring the foreign currency into your bank account in Thailand and convert it into Thai currency. The receiving bank will issue a “Certificate of Remittance” or “Thor.Tor. 3 (Sam)” if the remitted amount is more than $20,000. This Certificate of Remittance or Thor.Tor. 3 has to be produced to the Land Registrar for registration of ownership under the name of a foreigner and given to the Immigration Office for one-year visa. Many foreigners mistakenly transfer money directly into the bank account of the developer, and in this case, these foreigners cannot get the “Certificate of Remittance” or “Thor.Tor. 3” from the bank. Consequently, these foreigners cannot register the ownership of the condominium unit under their names. You should keep all remittance documents in good order to be able to justify all transactions with the “Anti Money Laundering Office” (AMLO) for repatriation of money to your country once you sell your condominium unit in the future.

7. The payment for the price of the condominium unit should be made by bank draft or cashier checque payable to the name of the developing company, and it is strongly advisable not to pay by cash.

8. The Consumer Protection Act requires that a contract to buy and sell a condominium unit must comply with the requirements under the “Announcement of the Consumer Protection Board” which ensures all clauses are fair for all buyers. There is a standard form drafted by the Consumer Protection Office.

9. The contract should be signed by with the authorized director of the developing company. However, as most of the authorized directors do not sign the contract in your presence. How do you know that it is the real signature? This problem can be solved if you make every payment by cashier checque or bank draft payable to the company who is the developer. If the company cashes the checque, the company cannot deny or raise the point that the signature in the contract is not the real signature of its authorized director.

10. The standard contract specifies that the buyer should share with the developer only the transfer fee of 2% from the appraised price. The income and business taxes including stamp duties should be solely absorbed by the developer. Most adhesion contracts drafted by developers always contain clauses in favor of the developers for their non-liabilities for breach of contract. You should have a proper English translation of the sale contract to compare with the standard form drafted by the Consumer Protection Office.

11. Once the construction is completed and approved by Pattaya City Hall, the developer will have to register the Condominium Juristic Person with the Land Office to separate title deeds (Cha Nod) for all units. At this stage, you will make a final payment by cashier checque or bank draft to the developing company at the Land Office in exchange for the title deed (Cha Nod) and house register book (Tabien Ban).

12. After the transfer of ownership, the co owners of condominium units in the project may join together to set up a committee to look after the management. The committee should control all the common areas and utilities to ensure that the developer will not abusively use these common areas for their own purpose. The committee may call for the general assembly of all co owners to draft a constitution and by-laws to protect the rights of all co owners.

The above protective measures are the minimum prudence you should have if you wish to avoid the legal dilemma in this land.

You should not be fatalist to believe that your fate is dependent upon only an “Act of God” or “Force Majeur”.

We believe in the axiom that the “Power of Knowledge” can save you from all dilemmas in this land.

By: Mr. Ponthep Werachon, Thai Solicitor & Mrs. Darunee Werachon, Thai Solicitor & Accountant of WERACHON LAW OFFICE, 448/17

Thepprasit Rd, Pattaya, 038 300 967, 081 423 4255
e-mail: thai(at)werachonlawyers.com,
Reading room about Thai laws www.thaisolicitor.com

Legal pitfalls of purchasing a brand new condominium

Technorati Tags: Legal pitfalls of purchasing a brand new condominium

Source: Raimon Land/Bangkok Post

The tourism industry continues as the main driver behind interest in Thailand’s resort condominiums, with holiday destinations close to Bangkok receiving the most attention, especially from international buyers lured by attractive prices.

Thailand’s seaside resorts; namely, Pattaya, Phuket, Koh Samui and Hua Hin, where more than 30% of the country’s luxury condominium inventory is now located, have experienced 9.5% annual growth in international arrivals since 2003, and these strong figures are supporting resort property expansion.

A surge in condominium launches during the second half of 2007 reversed a slowdown that began in mid-2006 and propelled the year-end tally to 2,415 new units. Of these, 67% were located in Pattaya, 26% in Hua Hin, 4% in Phuket and 3% on Koh Samui.

Pattaya’s strong performance was boosted by impressive economic expansion along the eastern seaboard and its proximity to Bangkok and the new Suvarnabhumi Airport.

Luxury condominium launches in Pattaya are trending towards both inland projects with sea views and those with beachfront locations, a reflection of buyers seeking affordable properties regardless of whether or not they have direct beachfront access.

Located three hours southwest of Bangkok, Hua Hin remains attractive due to its relaxing atmosphere, more affordable prices, appeal to Thai buyers and faster development completion schedules. Hua Hin sprang back to life in 2007, with the introduction of 640 units from prominent Bangkok developers, many of whom are launching new projects this year.

Lacklustre demand in Phuket and Koh Samui was linked to hesitant developers baulking at external factors such as currency exchange rates and possible amendments in the Foreign Business Act to make residential property rights more restrictive for non-Thais.

Should the government’s policies on foreign ownership change to allow a higher percentage of foreign ownership, developers will likely introduce more projects in Phuket and Koh Samui to satisfy international demand.

In spite of the deceleration in the rate of new resort development launches in 2007, combined sales value leaped 12% year-on-year to 17 billion baht on the take-up of 1,789 condominium units.

Pattaya’s luxury condominiums sold 544 units worth 6.6 billion baht in 2007, compared to 1,609 launched, for an average of 12.3 million baht.

Hua Hin captured 6.3 billion baht on the sales of 979 units, averaging 6.4 million baht. These projects received strong interest from local investors leading to a majority of the 640 newly launched units being sold.

Limited supply on Koh Samui led to low sales last year, with only 52 units selling for an average of 15.6 million baht. The purchase of 214 units in Phuket generated 3.2 billion baht for an average price of 14.8 million baht.

The average price per square metre (psm) in Pattaya climbed 10% over 2006 to 96,332 baht psm, the highest among all resort areas, followed closely by Phuket at 95,181 baht. Samui units averaged 87,420 baht while those in Hua Hin jumped 14.6% to 72,063 baht.

Of the total resort condo sales in 2007, 27% of the units sold were priced over 100,000 baht psm, and 21% between 80,000 and 100,000 baht psm. Units in the 60,000 to 80,000 baht psm range commanded 29% while those under 60,000 baht made up 23% of the total.

It should be noted that very few of the beachfront or seaview developments are now priced under 100,000 baht psm, and sales at the top 10 most exclusive projects averaged 123,715 baht in 2007.

Of all developments launched since 2003, 1,814 units or 23% were completed as of December last year. Of the remaining 6,177 units, 3,632 were still under construction and 2,545 units were in the planning stages.

These figures demonstrate that there is still very little supply in completed condominiums, as well as a limited number of completed projects in Thailand’s resort locations.

This situation has lifted resale prices, allowing developers to increase the prices of units in new projects while opening the door for investors seeking impressive short-term capital gains.

Foreign buyers accounted a significant portion of condominium purchases in Thailand’s resort areas in 2007, though the most active markets have changed.

Russians rose from outside the Top 10 to head Raimon Land’s 2007 buyer chart, followed by Thais, British and Australians.

Germany and China also moved higher while the US and Swedish markets started to slide.

Russians, Thais and British lead Pattaya’s property market, and Phuket is commanded by Russians, British and Australians. Hua Hin remains a predominantly Thai destination, with emerging international interest now making up 20-30% of acquisitions.

In 2008, look for more players and new groups of buyers in Pattaya, with limited completed stock driving up prices. Hua Hin will continue to exhibit strong local demand, with prices increasing in both resale and off-plan projects.

Phuket and Samui will remain vulnerable to external factors. New supply in Phuket will push demand, and look for new areas on the mainland adjacent to the island, now being referred to as Greater Phuket, to open up. Koh Samui will remain a niche market leaning toward branded real estate.

This is the fourth and final article based on research by Raimon Land in ‘Condominium Focus Thailand: Update of Inner-city Bangkok and Key Resort Areas’. Nigel Cornick is Chief Executive Officer of Raimon Land Plc.

Tourism driving sales of resorts close to capital

Technorati Tags: Tourism driving sales of resorts close to capital

Source: The Nation

With an eye on generating more rental income over the next five years, Major Development is shaping up plans to build hotels this year. The move will help create a stable source of income for the company, managing director Suriya Poolvoralaks said.

Major Development is developing a boutique hotel at Hua Hin. It is also scanning land in Pattaya for launching luxury-hotel projects by 2010.

The company is also developing nine residential projects worth Bt20 billion in Bangkok, Pattaya and Hua Hin. It has six luxury-condominium projects in Bangkok - Watermark Chao Phya River, Manhattan Chidlom, Aguston Sukhumvit 22, Wind Sukhumvit, Wind Ratchayothin and Royce Private Residences.

Royce Private Residences is being developed by MJAI Development, which is a joint venture between Major Development and AIG Asian Real Estate Partner II.

The next two projects are Mykonos Hua Hin and Marrakesh Hua Hin Residences. The last one, Reflection Jomtien Beach, is in Pattaya. The three projects have been launched this year and are worth Bt3 billion each.

Major Development plans to build a hotel close to the Marrakesh Hua Hin Residences, Suriya said.

Feasibility surveys are also being carried out on 10 rai of land close to Reflection Jomtien Beach in Pattaya for developing
hotels.

The hotel and residential projects illustrate the company’s thrust on the luxury market, Suriya said. The company is focusing on high-end and high-rise condominium projects, for which it sees a strong demand in the market.

Major Development plans to launch three to four condominium projects a year. New projects may be launched in the second half if the uncertainty over the country’s political future clears up, Suriya said.

“We will have to see the country’s economic and political climate in the second half. If things clear up, we may launch new
projects,” he said. “As far as possible, we will invest in the projects ourselves. But we are open to joint ventures.”

In April, the company’s shareholders approved issuing of debentures or convertible debentures worth Bt1.5 billion that will help the company raise funds from the market if the need arises, he said.

Major Development posted a revenue of Bt614.52 million and net profit of Bt117.27 million in the first quarter, up 65 per cent and 149 per cent from the same period last year.

Major Developer plans upmarket hotels, residences, in Hua Hin and Pattaya by 2010

Technorati Tags: Major Developer plans upmarket hotels, residences, in Hua Hin and Pattaya by 2010

Source: Bangkok Post

Demand expected to pick up in Q4

CP Land Co Ltd, expecting single-housing demand to revive by the fourth quarter of the year, plans to launch a project with unit prices starting at 2.5 million baht in Min Buri, according to executive vice-president Somkiat Ruentongdee.

The company will also be able to gain an advantage over some rivals who will have to follow new city planning regulations introduced over the past two years. The old regulations allowed for housing lots from 50 square wah.

“We obtained a construction permit before the new city planning [regulation] was effective. So new projects seeking construction permits can be developed for units sized from at least 100 square wah,” said Mr Somkiat.

As well, the company expects the site to appeal to buyers because the planned Pink Line mass-transit route would pass nearby.

The project will occupy a 70-rai site and have 275 single houses. Formerly named CP Home Park, the project would have a new name under CP Land, he said.

It will also launch the CP City Home project worth 700 million baht on a 69-rai site in the southern province of Nakhon Si Thammarat, with 320 units priced from 1.9 million baht.

The company also has a condominium, The Seasons in the Srinakarin area of eastern Bangkok and worth 700 million baht, which is 50% sold.

CP Land is looking for plot sized from three to four rai to develop a condominium near a convenient transit route, and another plot of one to two rai in the central business district.

The company yesterday introduced a new subsidiary CPMQ, a joint venture with CP Group subsidiary Magnolias Quality Development Corporation (MQDC). Its first project will be The Chur condominium on a 29-rai site near the Tesco Lotus store in Pattaya. Worth two billion baht, it would have six seven-storey six buildings with a total of 792 units sized from 44 to 144 sq metres and priced 46,500 baht each.

The project will be launched on June 28 with one-price marketing. Construction with an investment of 1.1 billion baht would start in October. The company hopes to achieve one billion baht in sales by the end of the year and the rest in 2009.

Mr Somkiat said the subsidiary would start booking revenue next year of around two billion baht. To maintain revenue, the subsidiary would develop three projects in 2009 while CP Land would develop at least four to five projects worth four billion to five billion baht per year.

For the Pattaya project, CP Land had strong network and customer database with potential to buy units.

Currently, CP Land has a total of around 4,500 rai in hand - 3,200 rai in industrial estates in Rayong and 100 rai in the Greater Bangkok. It aims to have a 50:50 ratio of revenue from sales and recurring income in the next few years, compared with the current 30:70 breakdown.

CP Land to launch B2.5m single houses

Technorati Tags: CP Land to launch B2.5m single houses

Source: The Nation

New Act puts tighter controls on escrow transactions

The Escrow Act of 2008 came into effect on May 21, establishing laws governing the escrow business in Thailand.

In an agreement to purchase and to sell immovable property, or any such reciprocal contract, one party will have an obligation to transfer or deliver assets or documents to another party and the other party will be obligated to pay the first party. In order to ensure that the obligations of both parties are fulfilled, the parties may mutually agree to appoint an escrow agent. This involves a tri-party written agreement known as the escrow agreement.

The escrow agent has the duty to ensure that the parties fulfil their obligations under both the contract and the escrow agreement. The escrow agent will also be responsible for the safekeeping of any money, assets or documents deposited by the parties and for handing over the money or arranging the transfer of ownership or rights to the assets when required.

As well as providing general definitions and outlining the main features of an escrow agreement, the Act lists the conditions and requirements for engaging in the escrow business, the rights and duties of the parties to an escrow agreement and those of an escrow agent, and the powers of the Escrow Committee. It also prescribes penalties for non-compliance.

One of the requirements is that companies wishing to engage in the escrow business must obtain a licence from the Finance Ministry. The Act will not affect existing escrow agreements, but if existing escrow agents wish to continue to carry on their business under the new Act, they are required to apply for a licence within 90 days of the Act taking effect.

The escrow business under the Act is a juristic person. The term “escrow agent” is defined as a juristic person whose creditworthiness has been approved by the Escrow Committee, which acts as a middleman.

Only a financial institution, or other juristic persons as specified under a ministerial regulation, will be permitted to act as an escrow agent. Further, the escrow agent must have no conflicts of interest with either party to the contract, and must obtain a licence to conduct the escrow business from the finance minister.

Escrow agents will be monitored by the Escrow Committee, which has the authority to order them to correct or stop prohibited activities if they are detected and to perform their duties in compliance with the Act. If an escrow agent does not comply with an order of the committee or with certain sections of the Act, the committee will have the authority to impose an administrative fine on the agent. The Act also prescribes criminal penalties for escrow agents committing fraud. The fines and penalties will also apply to the managing director or authorised representative of the escrow agent - unless they can prove their innocence or demonstrate that they exercised sufficient duty of care.

Kanitnoy Praneechit is a senior manager of legal services at PricewaterhouseCoopers Mekong.

Thailand’s new Escrow Act in effect

Technorati Tags: Thailand’s new Escrow Act in effect

By Somluck Srimalee/The Nation

Province is seeing strong demand from Scandinavian home-buyers

Land prices in Rayong province, especially at Mae Pim beach, have shot up 60 per cent from an average of Bt8 million per rai in the last two years to Bt13 million per rai, given the strong demand for residential projects from foreigners.

Vilailux Development’s general manager Teeravat Pipatdhitakul said demand for residential projects in Rayong province, especially for Mae Pim beach locales, has risen since last year due to foreign as well as domestic investors showing interest in buying second homes.

Scandinavian investors have shown particular interest in the Rayong province as have Britons, Germans and Americans.

Given such strong demand for residential projects, six property developers - domestic as well as from overseas - have launched their residential projects on Mae Pim beach and Ban Pae with a cumulative worth of about Bt10 billion. They include

Glen Asia, developer of Tropical Beach Resort and Residence at Ban Pae - a project worth about Bt3 billion; Logan Residence Development with Seaview Condominium on Mae Pim beach; and Phupatara by Vilailux Development - a project worth Bt2.2 billion.

Other domestic companies are also developing residential projects worth about Bt2 billion.

According to research by Colliers International Thailand, Rayong is popular with foreign investors, especially Scandinavians.

As a result, a number of property developers from Scandinavian countries, especially Sweden, have invested in developing residential projects in the province.

The research shows that Scandinavian companies have established joint ventures in Rayong province. The cumulative registered capital of 39 such companies stands at Bt132.33 million. The highest registered capital comes from Norway at about Bt40.80 million.

The first project, launched by a Swedish investor back in 2003 - initially intended as a member estate for retirees - paved the way for the Scandinavian property developers’ rapid expansion in Thailand.

Of units developed by Scandinavians all across Thailand, Rayong has seen the highest number with 809 residential units, followed by Hua Hin and Pattaya, with 468 and 259 units, respectively.

The strong demand for residential projects in Rayong has driven up resale prices 12 per cent to 20 per cent a year.

Teeravat said Vilailux was selling its residential projects at prices between Bt80,000 and Bt100,000 per square metre in October last year.

However, given the strong demand, the same locations now command prices between Bt90,000 and Bt120,000 per square metre.

“Prices for Rayong projects are expected to grow because prices here have always been lower than in Hua Hin and Pattaya. We believe that as developers invest in Rayong luxury-residential projects, this market will change middle to upper within the next two to three years,” Teeravat said.

Foreign investors drive up prices in Rayong

Technorati Tags: Foreign investors drive up prices in Rayong

Source: Bangkok Post

Vilailux Development Co, the property arm of the Vilailuck family, plans to invest more in Rayong in line with the province’s increasing potential, says president Watchai Vilailuck.

The company was in talks to buy a 20-rai plot next to its Phuphatara resort and hotel on Mae Pim Beach in Rayong with a land price of 10 million baht per rai. “We don’t hesitate to acquire it as we want to close sales of Phuphatara,” said Mr Watchai, who is also the president of Samart Corp.

Vilailux Development aims to achieve a 90% sales rate at Phuphatara by the end of the year. The 58-rai site on Mae Pim Beach currently has residential presales of 1.2 billion baht. Construction of the first two condominium buildings is 70% completed.

With a total value of 2.7 billion baht, the site will have a 205-room hotel, 33 villas and 199 condominium units with prices starting at 3.8 million baht.

Phanom Kanjanathiemthao, managing director of the property consultant Knight Frank Chartered (Thailand), said the number of tourist arrivals to Rayong rose from 40,000 per year in 2005-06 to 100,000 in 2007. “Most of them [tourists] shifted from Khao Lak after the tsunami. Some of them wanted to escape from congestion in Hua Hin, Pattaya and Phuket. So Rayong has become their alternative,” he said.

At the same time, an increasing number of property investors are interested in Rayong as prices are lower than in other tourist destinations. Since land costs in Hua Hin are higher, investors are looking at other destinations close to Bangkok, such as Rayong.

Mr Phanom said land prices in Rayong had risen by 20-30% during the past year and beachfront plots were priced at 10 million baht per rai.

“There are no more beachfront land plots for new development in Hua Hin while land and residential prices have gone up greatly,” he said, adding that condo prices in Hua Hin were now 120,000 baht per square metre compared with 40,000 to 60,000 baht in Rayong.

Vilailux will invest more in Rayong

Technorati Tags: Vilailux will invest more in Rayong

Source: Bangkok Post

Major Development Plc (MJD) is riding the growth wave of the Pattaya property market with a plan for a luxury condominium worth 3.3 billion baht, says managing director Suriya Poolvoralaks. He said as much as one-third of the country’s real estate investment was now in the Eastern Seaboard.

Each year more than four million tourists from around the world visit Pattaya, bringing in at least seven billion baht.

The number of tourist arrivals to the area rose 14% in 2006 and 10% per year on average since 2000.'’Property projects in Pattaya have shifted from the low to middle-end segment to more luxury,'’ he said. Average condominium unit prices have risen from a range of 28,000 to 60,000 baht per square metre to 89,000 baht and are expected to rise another 3-5% by the end of 2008.

The Reflection condominium would be located on a 10-rai site, with two high-rise buildings with a total of 432 sea-view units. Unit prices are 5-10 million baht or 80,000 to 200,000 baht per sq m. Bank of Ayudhya would finance 50% of the two-billion-baht project.

After one month of marketing, the company had sold 40% of the units _ 24% to foreigners and 16% Thais, said Mr Suriya.

During the first five months of this year, MJD recorded 2.5 billion baht in sales, up 30% from the same period last year. As at the end of the first quarter, it had a sales backlog of 4.8 billion baht, half of which would be realised this year.

MJD recorded a first-quarter net profit of 107.54 million baht, up 149% from the same period last year, on sales of 610 million, up 65%. Its gross margin rose to 33.75% from 33.32%.

MJD shares closed yesterday on the Stock Exchange of Thailand at 4.10 baht, up two satang, in trade worth 2.22 million baht.

MJD cashing in on Pattaya property

Technorati Tags: MJD cashing in on Pattaya property