JanekS

I've just read investment plan on New Nordic Group website and its all looks much different than what I see everyday.

I live on next soi and I am often passing their buildings. Project is really big and still expanding (will be 54 buildings in total!), very brave I would say in this bad times when Pratumnak in high season looks like in low season years ago and in low season you can really feel like somewhere in Scandinavia, no people on the streets at all..

How project looks:

1. They built a lot of buildings which are very close to each other, 70% of rooms has a view on other buildings which is maybe 10 or less meters away, enjoy the view Even in Bangkok is hard to find such a density with new buildings.

2. Buildings and surrounding looks tidy but nothing much more than that. Construction quality looks very average (seen building process), economy class I would say. But a lot of bright paint, flags and stands with 5 stars on them can make good impression on person which is not too literate with this subject (some investors). Generally there is much more flashy marketing than good architecture.

I was wondering for a long time what is all that idea since many new condo buildings around are max 50% occupied in high season and much less in low season and many of New Nordic buildings are finished but inhabited yet they keep building new ones...

I've just see now this whole idea about guarantee 10% return... Where is a trick?

COMPANY WILL NOT MAKE THAT MUCH MONEY ON RENTING OUT YOUR PLACE

1. On the website info: Night rate for 28sqm room 1700THB, on Agoda 1050THB (high season probably 1500THB)

2. On the website info: Hotels was 65%​– this is in the ‘middle season’. Maybe they had few days that it was like that or in just one hotel, my impression was much less than that, maybe 20% in average plus few buildings totally empty

Over the ‘high season’ they are sure to have occupancy of between 90% – 95%: again, maybe they had for few days in some buildings with Chinese tour. In average its sooo unrealistic, and just to remember that many of their bulidings are finished but staying empty.

SO HOW THEY MAKE MONEY?

Price that you pay for buying

28sqm for 2,4 milion (on their website they even have some (30,5sqm for 3,5 million!) That is very very expensive for this area and for standard and density of building and for a view (street or other buliding, no sea view!)

In this area prices of brand new condos in about similar or better standard and size are between 1,2 up to 1,7 milion. For 2,4 M you can get one high standard high rise condo with great sea view.

So you OVERPAY 1 milion baht at the start!!!

10% after 5 years New Nordic will pay you NET 1.1 Milion

It looks like New Nordic is just taking loan for 5 years for 1 milion from you paid monthly without interest

What's more they make money on renting this condo. Lets be realistic, they can get maybe 20% occupancy with 1000THB/night NET profit, for 5 years it brings 365 thousand THB

So lets say after 5 years you have a condo finally in the price that you should pay in the first place but its not that new anymore cause around 100 people slept there in the meantime.

New Nordic had your cash in moment of sale that covered their construction cost (probably less than 1 milion/unit) so it was 1,4 milion that they could invest in new projects plus they got 365 thousand THB from rent.

Of course they have costs but its still very profitable for them and I salute them for coming with such brave business model but from my point of view its not a good deal for investors.

If they keep having new investors and high room occupancy it will all work, but I doubt it. Just imagine situation that they cannot find new investors, tourists are not coming (it is like this now).

Company running out of cash and cannot keep 10% return project anymore, well you own the condo but for how much would sell it than or rent it on the market?

One more thing, maintenance fee is one of the highest I've ever seen in Thailand, 50thb/sqm, it is usually 30-35 in higher standard buildings. Means its 17K THB/year instead of 10-11.

So if anybody thinks about investing in New Nordic please think twice or negotiate buying price, in much lower price maybe it would make sense.

I rent 33sqm condo nearby New Nordic on Soi 5 with unobstructed beautiful sea view for 8000/month with 6 months contract. Market value of the flat is 1 million. Its older building but its clean. Building is occupied in 60-70% mostly by people that live here all year plus some tourists. Low price, clean, good location and beautiful view, very quiet around, that attracts me. This is just for reference

I went on Wednesday got 1 month only. Took all day from 9am till 4:30. I was asked few easy questions in Thai that i can answer. When i realized that they stamp 1 month only i came back to ask them why not 2 or 3 month, they were making stupid faces, not look in my eyes and said "go contact your school". Next day i had a class. It came out that all students got only 1 month that day. People from different countries. Im Polish others were from China, Korea, Japan, Israel, US, UK. Somebody from school staff said that probably its because Immigration cannot take bribes easy now, or have other ways to make extra money so boss have idea to make students coming more often so they pay more often... Whatever it is, i live in Thailand long time its not a big surprise, but still pissing me off. Changing "rules" every few months, legally ripping off people, fail to give any clear information, but when you call Thailand 3-rd country or laughing from obvious idiocy Thais are angry... If i will have to go trough this s#it every month i guess ill go to Lao get tourist Visa. Probably they give it easy now after "monumental" discovering that amount of tourist coming dropped.

Mr Upset

Guys... Look at the date its 1-st of April... Fools day