Condo Block End of Lease

[roskruge]

Condo block end of 30 year Lease.

I am buying a condo in Bangkok, it is NOT Freehold, and the condos block Lease is held by a very well know Thai company, There is only a little over 6 years left of the blocks lease. I 'will be' getting the Condo at a Fire-Sale price, it already has a sitting tenant, I calculated on rent alone in that time period I would break even, but would be at a loss if you take into account strata title fees or Common fees. The block (I will not name) is smack in the centre of Bangkok in the up-market area of Pathum Wan. Now the question is, now assuming the blocks land owners, do not renew the 30 year lease, "do the 300 - 400 condo co-owners get any compensation", at the end of the lease period, bearing in mind several of the units (not mine) are now selling for several Million Baht. Also occupancy in that building tenant and/or co-owner is very high. The assumption is the lease would be renewed, but I don't think so, as it is a old building, owners could build a new skyscraper in its place (good size block). Also a condo block in Din Daeng (Bangkok) was recently renovated/knocked down and all tenants and co-owners were all turfed out.

[ExpatOilWorker]

I own a lease hold condo in the Soi Mahadlek Luang/Langsuan area and have been following the area for 20 years.

Don't count on an extension, there are major plans for certain areas and most include a wrecking ball.

Might not be such a fire sale price after all.

[worgeordie]

You are placing a lot of faith on the sitting tenant staying

in place for the rest of the lease , no guarantee this will occur,

so the fire sale price might not be so good.

regards Worgeordie

[OneMoreFarang]

I know an American woman who lives in such a building, maybe it is the same building.

According to her there will be nothing. She has to move out and that's it. No compensation.

But according to her in her building that situation was clear from the beginning. When her husband bought the unit maybe 20 years ago they were aware that they will own it only for a limited time.

 

And in this specific building the name of the owner of the land makes sure that nobody will even think about arguing... 

[Mac Mickmanus]

16 minutes ago, roskruge said:

at the end of the lease period, bearing in mind several of the units (not mine) are now selling for several Million Baht.

Are they being sold for several million Baht or are they on sale for that price ?

[stratocaster]

Reminds my of a quote from a salesperson in a newspaper a few years ago.   "The reason our condo building sold out in 2 days is that it is one of the very few freehold condos available in central Bangkok. The majority in central Bangkok are build on leasehold land".

[roskruge]

OneMoreFarang : The question was about compensation, and you appear to have answered it, Thanks

 

Worgeordie. It will not matter if tenant does not stay, as they are paying the same rent as I am, and if the move on, I move in, so it works out exactly the same.

ExpatOilWortker : I am 80 now so highly unlikely, I will be around till end of Lease. Also, when I die Thai gov will take everything anyway,

 

Thanks all

[ExpatOilWorker]

40 minutes ago, roskruge said:

OneMoreFarang : The question was about compensation, and you appear to have answered it, Thanks

 

Worgeordie. It will not matter if tenant does not stay, as they are paying the same rent as I am, and if the move on, I move in, so it works out exactly the same.

ExpatOilWortker : I am 80 now so highly unlikely, I will be around till end of Lease. Also, when I die Thai gov will take everything anyway,

 

Thanks all

My guess you are looking at one of the buildings managed by BTS, most likely at Soi Mahadlek Luang 2.

You can find some good deals there, 60+ m2 for around 1.5 million. 

Welcome to the neighborhood. 

[roskruge]

ExpatOilWorke Try another Soi number, and you will be there, Under 1,500,000 Baht. The block I think you are referring to, planning permission has just been refused on a adjoining vacant block to the East.

[ExpatOilWorker]

2 hours ago, roskruge said:

ExpatOilWorke Try another Soi number, and you will be there, Under 1,500,000 Baht. The block I think you are referring to, planning permission has just been refused on a adjoining vacant block to the East.

1.2 million for a 64 m2 unit at RP1 then.

It is probably the nicest of the older buildings in the area, but only 5 1/2 years left on the lease.

[roskruge]

ExpatOilWorker got it right this time !

if you can, could you get me the present lease actual expiry dates on RP1 & RP2. If you can't its OK, as I have a meeting with RP2 Manager at the BTS office.

Lobby of RP1 was like going back to the US 1930's era.

Thanks

[ExpatOilWorker]

1 hour ago, roskruge said:

ExpatOilWorker got it right this time !

if you can, could you get me the present lease actual expiry dates on RP1 & RP2. If you can't its OK, as I have a meeting with RP2 Manager at the BTS office.

Lobby of RP1 was like going back to the US 1930's era.

Thanks

June 30, 2027 for RP1.

[jackdd]

On 11/26/2021 at 12:29 PM, ExpatOilWorker said:

You can find some good deals there, 60+ m2 for around 1.5 million. 

So adding common fees and assuming after the 5.5 years it gets demolished, this boils down to about 25k per month, paid 5.5 years in advance?

I think if somebody is willing to pay rent 5 years in advance there are quite a wide range of 60+ sqm condos for 25k per month to be found in Bangkok, or am I wrong with this assumption?

[roskruge]

jackdd

"or am I wrong with this assumption ?"  Yes, I think you are wrong, because you are basing it on 100% that it will be knocked down, who knows what BKK will be like in 5-6 years after COVID-19 and with each new variant, every 6 months more contagious than the last. Owners may decide to leave as is, or renovation, without throwing out co-owners or a range of other possibilities, Yes it could be knocked down, without compensation, but I am willing to take that risk. Thanks for your input.

[ExpatOilWorker]

13 hours ago, jackdd said:

So adding common fees and assuming after the 5.5 years it gets demolished, this boils down to about 25k per month, paid 5.5 years in advance?

I think if somebody is willing to pay rent 5 years in advance there are quite a wide range of 60+ sqm condos for 25k per month to be found in Bangkok, or am I wrong with this assumption?

You are correct, on both accounts. 

Yes, you are effectively just paying rental, in the form of a leasehold, for the remaining 5.5 years. Common fee, maintenance,  aircon service, etc is then also out of your pocket. 

Yes, oh YES, there are currently some amazing deals out there. About 6 month ago a friend of mine got a 220 m2 condo for 30k a month. Older building of course,  but still nice and very central location not far from Emporium. 

[ExpatOilWorker]

2 hours ago, roskruge said:

jackdd

"or am I wrong with this assumption ?"  Yes, I think you are wrong, because you are basing it on 100% that it will be knocked down, who knows what BKK will be like in 5-6 years after COVID-19 and with each new variant, every 6 months more contagious than the last. Owners may decide to leave as is, or renovation, without throwing out co-owners or a range of other possibilities, Yes it could be knocked down, without compensation, but I am willing to take that risk. Thanks for your input.

Awesome, I am glad you are in a positive spirit when you meet A today at RP2. She is a beauty. 

 

Co-owners????

There are no co-owners, only lease holders.

Whether the landowner decide to demolish the entire building, gut it to bare shell and refurbish it or just repaint it and issue a new round of 30 year leases is irrelevant for the current leaseholders, they will be long gone.

[roskruge]

ExpatOilWorker

I stand corrected on co-owner.

But not on the evictions, unless you know something that the present management or present lease holders do not know.

Meeting is with Ms.W.C. not A

Is there a walking route (pathway) from RP1 to RP2 without going down Rachadamri ?.

[ExpatOilWorker]

13 minutes ago, roskruge said:

ExpatOilWorker

I stand corrected on co-owner.

But not on the evictions, unless you know something that the present management or present lease holders do not know.

Meeting is with Ms.W.C. not A

Is there a walking route (pathway) from RP1 to RP2 without going down Rachadamri ?.

Sure, soi 1 and 2 connect via the Sansiri building. You can also walk to Langsuan from soi 1, just past Harborland. 

While you are out walking, have a look at Mitkorn Mansion and Golden Land, because soon they will be gone. Peninsula, same thing.

Do you think Marriott Courtyard was always there? Nah, that use to be a condo, mostly occupied by US embassy staff.

I know as much as everyone else, exactly nothing.

 

[digbeth]

On 11/26/2021 at 9:02 AM, stratocaster said:

Reminds my of a quote from a salesperson in a newspaper a few years ago.   "The reason our condo building sold out in 2 days is that it is one of the very few freehold condos available in central Bangkok. The majority in central Bangkok are build on leasehold land".

Depends on what's your definition of 'central' Bangkok, Ratchaprasong to southern part of Wireless rd., yes, Sukhumvit, Petchburi rd. Silom and Sathorn are all freehold 

[GrandPapillon]

On 11/27/2021 at 7:52 PM, roskruge said:

jackdd

"or am I wrong with this assumption ?"  Yes, I think you are wrong, because you are basing it on 100% that it will be knocked down, who knows what BKK will be like in 5-6 years after COVID-19 and with each new variant, every 6 months more contagious than the last. Owners may decide to leave as is, or renovation, without throwing out co-owners or a range of other possibilities, Yes it could be knocked down, without compensation, but I am willing to take that risk. Thanks for your input.

what a terrible deal, there is really one born every minute ????

 

sounds like you could buy cryptos for that amount, and have better odds at making a profit ????

[roskruge]

GrandPapillon:

First of you have no idea 'what I may pay for it', So 'only a fool' would judge it to be a good or bad deal, because payment has not been made yet.

Had you read earlier post, you will see I do not expect to live to end of current lease.

Much rather the money stays in Thailand going to Thai Gov, than go to some Russian or Chinese Crypto Manager.

Being a Green, would not invest in it anyway, One transaction takes the equivalent in power of several 1,000 Big-C transactions.

No longer interested in chasing Profit, much to old for that, I have enough to last to the end.

[ExpatOilWorker]

1 hour ago, roskruge said:

GrandPapillon:

First of you have no idea 'what I may pay for it', So 'only a fool' would judge it to be a good or bad deal, because payment has not been made yet.

Had you read earlier post, you will see I do not expect to live to end of current lease.

Much rather the money stays in Thailand going to Thai Gov, than go to some Russian or Chinese Crypto Manager.

Being a Green, would not invest in it anyway, One transaction takes the equivalent in power of several 1,000 Big-C transactions.

No longer interested in chasing Profit, much to old for that, I have enough to last to the end.

The Papillion might not be grand, but he still has a point.

Many moons ago a 84 m2 unit was sold for 3.8 million with 24 years left on the lease.

Do the math and suddenly the 64 m2 unit with 5.5 years left should sell for 663.5 k. Are you really getting the fire sale you think you are?

Maybe we should have coffee one day?

[Airalee]

I would be afraid of getting hit with a large special assessment in the last few years of the lease myself.  Not speaking to this particular building, but in general…If the leaseholder currently owns a majority of the units in a building, couldn’t that leaseholder vote for improvements, to be partially paid for by other current owners, before regaining full ownership?

[ExpatOilWorker]

2 hours ago, Airalee said:

I would be afraid of getting hit with a large special assessment in the last few years of the lease myself.  Not speaking to this particular building, but in general…If the leaseholder currently owns a majority of the units in a building, couldn’t that leaseholder vote for improvements, to be partially paid for by other current owners, before regaining full ownership?

No.

[roskruge]

Airalee: I don't understand the logic of why the ' land title owners' would want do it, if they are about to gut the building. Apart from the fact they could Not get an 'overall' majority, 49% held in foreign name, even with 25% of Thai lease holders, land owners would only, get about 25% of the vote, in my experience Thai do not vote for common fee increases, and the foreigners would certainly not.

ExpatOilWorker:

Minimum rent collected on that building is 20,000 Baht I would be collecting rent from tenant or living there myself I now pay 20,000 in rented condo so, adding strata title or Common fees, plus transfer & land Department fees just a few baht short. 5 1/2 years is 66 months. actually 67 months in actual time. But could strip unit of furniture and fittings,before vacate, 200,000 Baht  to replace.

Would love to take up offer of chat over coffee,

If I was chasing profit I have watched a Thai share on SET (Stock Exchange of Thailand) go from 1 Baht 12 months ago to 100.50 today, even in the last week in down market it has put on 20 Baht. ( But yes ! I did buy a few). Could be heading for 300 Baht a share. Sorry OFF Topic.

[roskruge]

Have officially reject offer to buy, What eventually turned me off is any new lease offered will be 'for sale', with the last 12 months to accept the offer ('if there was an offer'), but cost could be an additional 2 Million Baht on 64 sq mt to extend lease. Present Unit lease holder balked at my final offer. I calculated I would be better of and better placed to buy a long term lease or a Freehold property at a later date. Thanks everyone for input.

[GrandPapillon]

31 minutes ago, roskruge said:

Have officially reject offer to buy, What eventually turned me off is any new lease offered will be 'for sale', with the last 12 months to accept the offer ('if there was an offer'), but cost could be an additional 2 Million Baht on 64 sq mt to extend lease. Present Unit lease holder balked at my final offer. I calculated I would be better of and better placed to buy a long term lease or a Freehold property at a later date. Thanks everyone for input.

told you so, glad to see you finally wised up and didn't go for that silly deal ????

 

just buy SET shares ???? some have nice 10% dividends too, much higher than your condo deal could bring, and it's liquid, unlike a Thai condo