Land Lease for Cell Tower Experience ?

[bruin]

We were recently approached by a broker / middle man about locating a cell antenna on my wife's land. Second meeting representative of large Thailand internet/ TV / antenna / cell company came along. No business card or anything. I don't speak Thai so only know what my wife tells me about this. They have made an offer 3 years plus two additional 3 year options with increases total 9 years. The offer of 18000 /mo seems low to me. Anyone have experience or negotiated similar?

B

[Swiss1960]

No experience but here my 5 cents:

- what designation does the land have today,  i.e. farming, industrial, residential?

- is the land developed with water, electricity, buildings? Any current profits from the plot?

- if no profits, how much would you have to invest in order to make that profit, i.e. from renting a house for 18K?

- if the tower gets built, is there still enough left for you to use for other purposes?

- if the tower gets built, would the contract still allow you to sell the plot, assuming a new party would have to honor the contract with the tower?

- are there neighbours with similar plots that might also have been approached?

 

All above should give you an idea about what you could get or should ask for.

[Airalee]

after googling it a bit I’m left with the following questions.

 

After the 9 years...then what?  9 years actually sounds kind of short considering the life of a cell tower is 70 years.  Are they expecting it to become obsolete?  If it does, who pays to remove it?  I can’t imagine that would be cheap.  Then, with a rusting tower on the land...what’s it worth.

 

Loosely related...I had a friend who used to work for a large “communications” company In the US that leased peoples land for billboards.  He said if he was the person approached that there was no way, no chance, never would he let them lease his land for a billboard and I’ll bet he would say the same about cell towers.

 

YMMV

[bruin]

8 Rai rice field yes water and electricity available. Yes others in area available. We haven't reach final details of contract so much but I would not do without the flexibility to sell if desired. Thanks for the input Swiss1960

[bruin]

Good point about the end of the lease who is responsible for tower. I'd imagine would have done scrap value but thanks for your input.

My main concerns are perceived negative impact to value of overall property vs income from lease. We do have our home here so that does have some weight. Nothing like looking at a giant blinking cell tower out your window all night I imagine...

If we don't do it then possibly a neighbor does and we still look at tower for our view but no income from it lose lose. Similar to the wind turbines back home, if you don't do it neighbors will.

[scorecard]

14 hours ago, Swiss1960 said:

No experience but here my 5 cents:

- what designation does the land have today,  i.e. farming, industrial, residential?

- is the land developed with water, electricity, buildings? Any current profits from the plot?

- if no profits, how much would you have to invest in order to make that profit, i.e. from renting a house for 18K?

- if the tower gets built, is there still enough left for you to use for other purposes?

- if the tower gets built, would the contract still allow you to sell the plot, assuming a new party would have to honor the contract with the tower?

- are there neighbours with similar plots that might also have been approached?

 

All above should give you an idea about what you could get or should ask for.

Plus one more smaller item, is the phone company involved also offering free telephone package and internet package etc., in the contract?

 

Years back my Thai family and self went to a wedding in a village in essan, I wondered why there was so many cables connected to the wedding house from many neighbors houses. 

 

The land of the wedding house had a very large/high electric tower, the land owners received a small monthly rent for allowing the tower on their property plus free electricity every month until the tower removed (if ever).

 

You guessed it, many neighbors houses had been connected into the wiring within the wedding house. Whole neighborhood was therefore getting free electricity. 

 

 

[steven100]

The price offered would be a standard rate for the cell site land lease imo,  it would have been calculated in the office based on the plot area needed, possibly 12x12m or whatever.

I doubt you will have room to negotiate this price because if you don't want it there are 20 more people up the road who do.

I'd accept it if the land is not producing anywhere near that amount now or future.

You can accept it and get 216,000 baht per yr rental or don't and get nothing.

 

 

 

 

 

[nobodysfriend]

15 hours ago, bruin said:

Good point about the end of the lease who is responsible for tower. I'd imagine would have done scrap value but thanks for your input.

My main concerns are perceived negative impact to value of overall property vs income from lease. We do have our home here so that does have some weight. Nothing like looking at a giant blinking cell tower out your window all night I imagine...

If we don't do it then possibly a neighbor does and we still look at tower for our view but no income from it lose lose. Similar to the wind turbines back home, if you don't do it neighbors will.

Take the money and run ...

[Crossy]

Why are they doing a 3+3+3 year lease rather than a 9 year?

 

Probably to avoid registering it at the land office which opens up the possibility of them running away after the 3 year period and leaving the land owner with a cell tower to maintain (anti-collision lighting) or remove.

 

As others have noted, the end-of-lease clause needs to be watertight.

 

[Farma]

My wife had 20/30 year lease offers from Tesco and a bank on a piece of land she owns in the past.

 

Both times the offer included the choice of her keeping the building or them removing it at the end of lease. They would arrange all planning permission.

 

Tesco would build their own building. The bank generously???? offered her the plans of the building they wanted and a low interest loan. Both offers were turned down by her.

[Peterw42]

@blackcab is pretty knowledgeable about these things, he may not see this post unless its in the real estate forums.

[bruin]

Thanks all for your comments.

[blackcab]

The company I work for has a mobile phone operator and their cell tower equipment as a tenant.

 

18k a month for a rural location? Personally I would rip their arm off for that kind of money because it's the best offer I have seen. We don't get that much for a location in Bangkok. One of our staff members also has a cell tower on her land in Isaan and she gets 30k per year.

 

The standard agreement is a 3 year contract, which is renewed for additional periods of 3 years. This is completely normal. The telecoms company will arrange and pay for the installation, and they will have their own electricity supply and meter fitted. They will pay the electricity bill directly. There is zero chance of them leaving anything behind if they exit the site, which brings me to the next part of my answer.

 

Telco companies are one of the best tenants. You get a bank deposit on the same day every month and it's all very easy. Cell phone towers rarely move, so you have a long term tenant, which is exactly what you want.

 

No matter what lease is given, the land owner can always sell the land (if there is no mortgage outstanding). A lease places no restriction on your right to sell. However, if the new tenant did not agree to continue the lease the land owner owner will be liable to pay the telecoms company damages equal to the amount of outstanding rent.

 

That being said, most farmers would probably like a guaranteed 18k a month before they got their hands dirty.

 

For the company I work for, cell phone towers have been a positive experience.

[eisfeld]

18k/month sounds incredible for a piece of farm land. Are you sure it's not a misunderstanding and it's 18k per year lowball? That's more than you can ever hope to make from farming it. After 9 years you have nearly 2M THB which is a lot more than what that piece of land is worth (not your whole plot but the part that they will be renting). So the only question is if you can live with that tower next to your home.  Depending on how big the plot is you can maybe place it as far away from your home as possible and put a tree or two between it and your house to at least partially cover it from view.

[khunPer]

21 hours ago, bruin said:

They have made an offer 3 years plus two additional 3 year options with increases total 9 years.

This is actually an illegal offer. It's either up to three years rent, and for more than three years a land office registered lease for up to 30 years; options for longer periods than specified by law are illegal, and a lease will be counted for the initial date up to the allowed maximum only.

 

If me, I would insist on a registered lease agreement for nine years made by lawyers, one of them yours, stipulating clearly about removal of the installation after the lease terminates; eventually with a bank guarantee, or similar safe guarantee, for the removal job being done.

[Bender Rodriguez]

red flag nr 1 : no business card ... no company name

 

and you want 5G in your backyard ... do "some" research

[scorecard]

6 hours ago, steven100 said:

The price offered would be a standard rate for the cell site land lease imo,  it would have been calculated in the office based on the plot area needed, possibly 12x12m or whatever.

I doubt you will have room to negotiate this price because if you don't want it there are 20 more people up the road who do.

I'd accept it if the land is not producing anywhere near that amount now or future.

You can accept it and get 216,000 baht per yr rental or don't and get nothing.

 

 

 

 

 

Not so sure about that. I've heard before that most people they approach give a clear NO, because they fear getting into some entanglement with the gov't.

 

[Max69xl]

20 hours ago, bruin said:

Good point about the end of the lease who is responsible for tower. I'd imagine would have done scrap value but thanks for your input.

My main concerns are perceived negative impact to value of overall property vs income from lease. We do have our home here so that does have some weight. Nothing like looking at a giant blinking cell tower out your window all night I imagine...

If we don't do it then possibly a neighbor does and we still look at tower for our view but no income from it lose lose. Similar to the wind turbines back home, if you don't do it neighbors will.

Ask for a free subscription of everything they offer during the whole period on top of the monthly payment. 

[blackcab]

The thing to realise with a cell tower lease agreement is that you will not be able to change the terms of the lease. Telecom companies use an internally approved lease agreement which certain staff members have authority to sign. Any deviation to the terms of the lease will require a completely separate round of management oversight. Now, if you are CP, and you own 2,000+ suitable locations then that is always an option. If you are not in that special position then it's the standard lease agreement or no agreement at all.

 

Every such lease agreement I have seen (and I have seen a few) has a duration of 3 years, and every such lease agreement has been promptly renewed by the company.

 

In terms of the location of the mast, the telecom company will determine that and will choose the position most suitable for them. Normally this is reasonably close to the road and is partially determined by the height of the tower and the positions of the guy rope anchor points.

[Scott Tracy]

4 hours ago, Bender Rodriguez said:

and you want 5G in your backyard ... do "some" research

Please elaborate. For those who cannot do the research....

[bruin]

Wife says not going to do...something not correct "gangstas".

Wife spoke with a few friends, there are a couple cell towers relatively close both leased at $50k per year. Never the less wife doesn't trust them so it's over. Just as well... 

Our property is for sale listed on Kaidee and believe that's how he found and contacted us. Wanted to get my wife to go with them alone without me to sign the deal fast "big money today!" Doesn't seem to be on the up and up. No telling what they were going to try and have her sign.

Thanks for all the great comments much appreciated.

B

[blackcab]

4 hours ago, bruin said:

...$50k per year

 

50 thousand dollars per year?

[maxpower]

Back in 2003 I spent a short period on the Thai Orange/True Corp project and have stayed in touch with the son of a guy who has several antennas on his land and shop house roof dating back to 1998.

 

The antennas now average around 80K Baht per year each. I recall two of his contracts pay the tax and the rest do not. 

 

 

Capture of the True and Dtac antennas from Google, AIS and some repeaters are on another corner.....

 

[bruin]

On 10/7/2020 at 10:32 PM, blackcab said:

 

50 thousand dollars per year?

Baht