Healthy prime real-estate sales expected in 2018

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Healthy prime real-estate sales expected in 2018

By The Nation

 

Bangkok’s real estate market witnessed several large investment sales transactions in 2017. Of these, three of the largest, with a combined value of Bt7.9 billion, were concluded by JLL on behalf of the owners.

 

The firm says it expects the momentum to continue in 2018 as rising real estate asset values continue to motivate owners of prime properties to sell.

 

Suphin Mechuchep, managing director of JLL, said: “In 2016, the largest real-estate transactions JLL closed were two long leases on prime land plots in Bangkok.

 

“One was a 50-year lease of a site on Silom Road with approximately six rai of land. The lease was acquired by NYE Estate Co and Minor International PCL that formed a joint venture for a new Grade A office development on the site.

 

“The other transaction was a 30-year lease of a site of a similar size on Ploenchit Road, acquired by Raimon Land PCL. The two lease agreements account for over Bt15 billion of combined contract value and represent two of Bangkok’s largest real-estate investment deals recorded in 2016.”

 

“Unlike 2016, all of the significant investment deals we closed in Bangkok in 2017 were sales of prime assets on a freehold basis,” she added.

 

The these were:

 

• The former Australian Embassy site on Sathon Road, with 7 rai 382 square wah of land, acquired by Supalai PCL; 

• The 224-key Premier Inn hotel in Bangkok acquired by Hotel 81 and branded as Travelodge Sukhumvit 11; and 

• An unfinished 34-storey hotel development on Sukhumvit Road acquired by Carlton Hotel Group of Singapore.

 

Among the three deals, the sale of the former Australian Embassy site was the largest transaction recorded in Bangkok’s Central Business District (CBD) in 2017.

 

JLL expects real estate investment activity in Bangkok to remain robust in 2018, with a number of prime assets being for sale.

 

 In the start of the year, the firm has already closed the sales of two prime land plots in Bangkok’s CBD, sized about 2 rai each, with a combined value of over Bt3.6 billion. The two plots are suitable for luxury condominium development.

 

Bound to confidentiality agreements, JLL declined to disclose more details about the two transactions but said it expected the buyers to unveil their plan for the sites to the public soon.

 

“Whilst concerns over a new financial burden following the proposed new land and buildings tax had been expected to encourage more owners to dispose of property – particularly high-value land that is underutilised – evidence shows that sales of prime land in Bangkok have been motivated more by opportunities for owners to realise capital gains,” Suphin said.

 

“The recent sales of the two prime land plots that JLL concluded on behalf of the sellers exemplify the case well. In addition, there are currently a few sizeable prime land plots and investment-grade hotels offered for sale in Bangkok with the owners motivated by high price offers from interested purchasers.

 

“The proposed property and buildings tax should have an apparent impact on many property owners when there is more clarity about the new tax scheme and the rollout plan

 

“ However, we do not expect the new tax to lead to distress sales, particularly for prime real estate assets. Developers and investors will compete fiercely for sought-after assets when put up in the market,” she concluded.

 

Source: http://www.nationmultimedia.com/detail/Economy/30337527

 

-- © Copyright The Nation 2018-1-30

[RichardColeman]

Continuing to sell prime estate in a sinking city.