La Royale Beach- Completion Risk?

[Eastcoast]

The cleaning of the building has started already. Hopefully by this time next week it will be totally clear. We have been through all apartments now and it seems like the floors lower than 20th have bigger problems with the tiling than those above. K-Tech did all the lower floor tiling and must admit it was terrible. Certain rooms are having tiles replaced where required and others are being totally redone. They are concentrating on the units that want early transfer first so if you want your unit before the Xmas period please contact us now.

Again please feel free to contact either myself or Sabina at the email addresses in post #55 for further information.

Regards,

David

East Coast

[TJG]

Buying anything is a huge risk in Thailand, be it a condo, house or business. I think BKK is better than Pattaya, more trustworthy and worldly businesses and business people in BKK. Pattaya has far to many cowboys, and as someone who lived and worked there for over 5 years I can say that with confidence.

The housing market in the UK is in dire problems, and with what happened yesterday in the good ol US of A, it is set to get worse. As well as a second major UK bank being nationalised yestereday to avoid collapse, 3 banks were nationalised in the EU all down to our stupid American cousins not following through on promises. Luckily our government guarentees that savings upto £35,000 are safe in a government scheme, so you just have several accounts at different banks if you have over £35,000 in savings. What protection does the Thai government give you, or its people for that matter?

What is happening in the west will come to the east, and soon. It should be a concern for anyone who has a lot of money tied up in Thailand I would think.

That's rather a simplified analysis and ignores completely the fact that the vast majority of property in Pattaya, and other areas popular with foreigners, is purchased with cash rather than with mortgage finance. The biggest problems in the West right now are being caused by the fact that property prices have been artificially inflated by irresponsible lending practices. This bad debt means that there are lots of repossessions and forced sales, both of which increase the supply of property for sale. At the same time, the financial institutions which hold this bad debt cannot now afford to offer mortgages to anything like the extent they were previously with the result that demand for properties has dropped right off. Vastly increased supply and greatly reduced demand means that prices fall, and quickly, which then means that the security held by the mortgage companies is insufficient meaning that they become insolvent, hence the collapses. Insurance companies who have insured against these very problems are then hit, so on and so forth.

So how is that relevant to a market in which a small minority of properties are purchased with cash? It isn't. No doubt the problems in the West will affect demand for properties here, but there will be relatively few forced sales and even fewer repossessions. The reduced demand will slow the market, making most property purchases relatively illiquid, but the majority of owners will simply hold their property and keep their asking prices unchanged until the market eventually turns. There will be some deals around, but the market generally is very unlikely to fall.

As for the banking situation, due to cautious lending practices since the 97 Asian economic crisis, the banks here are not believed to be exposed to anything like the extent of some Western banks. These very lending practices mean, for the reasons set out above, that the market generally is unlikely to fall, which means that their security will remain adequate.

Obviously in a globalized economy, it is unlikely anywhere will escape completely the fall out from the problems in the West. However, simply to assume that the very same problems will happen here in Thailand ignores the reality of the situation.

[racefan]

Just got back from the site. Some pics of the exterior:

Can anyone tell me what that awful mish mash of a structure is at the bottom of the main tower that is visible on the right hand of the picture posted by Baannok?

I drive by the site regularly and initially thought that it was a purpose built shanty for the workers and would be knocked down when construction was completed but as it has now been painted with the same colours as the main tower I assume that it is permanent.

I makes the whole place look like a tenement building in Peckham.

[Eastcoast]

Just got back from the site. Some pics of the exterior:

Can anyone tell me what that awful mish mash of a structure is at the bottom of the main tower that is visible on the right hand of the picture posted by Baannok?

I drive by the site regularly and initially thought that it was a purpose built shanty for the workers and would be knocked down when construction was completed but as it has now been painted with the same colours as the main tower I assume that it is permanent.

I makes the whole place look like a tenement building in Peckham.

Hi Racefan,

I have never been to Peckham, have they got half finished apartment blocks there also? The building is actually a multi use structure with apartments and facilities for the main building. Sorry it is not to your liking, must admit I don't think it's very pretty as it stands either but then it isn't finished yet..... I will give my judgement when they tell me it's complete. Apart from the colour of the main building have you any input regarding it? Have you checked out the actual units for sale?

Thanks,

David

East Coast

[lawling]

Just got back from the site. Some pics of the exterior:

Can anyone tell me what that awful mish mash of a structure is at the bottom of the main tower that is visible on the right hand of the picture posted by Baannok?

I drive by the site regularly and initially thought that it was a purpose built shanty for the workers and would be knocked down when construction was completed but as it has now been painted with the same colours as the main tower I assume that it is permanent.

I makes the whole place look like a tenement building in Peckham.

I would be concerned about the amount of rubbish being tipped in the surrounding area. The building may be far from the madding crowd but it seems to be in the middle of where a section of the madding crowd comes to dispose of its garbage. Hardly an appropriate environment for a prestige development.

[condohope]

I have been in Pattaya for a month now to see the progress of my condo at LaRoyale. I had personally talked with Eric Lai for an hour and his architect Khun Saeg and of course Khun Chai. We do see progress but what is totally lacking is the initiative of Wise Power to get in touch with its customers. I do not want to get into details of tiles, colour and lot of work to be done but stressed for a meeting to be held with the future condo owners, to demand an explanation from Mr. Lai and a representative of his bank to assure that the project can be finished as promised. All customers ought to be contacted by email as soon as possible and invited for this meeting or without the possibility to be present have their questions answered. I was told that progress will go hand in hand with the transfers, but I shall have more confidence when a bank can give me assurance.

[peejee]

I have been in Pattaya for a month now to see the progress of my condo at LaRoyale. I had personally talked with Eric Lai for an hour and his architect Khun Saeg and of course Khun Chai. We do see progress but what is totally lacking is the initiative of Wise Power to get in touch with its customers. I do not want to get into details of tiles, colour and lot of work to be done but stressed for a meeting to be held with the future condo owners, to demand an explanation from Mr. Lai and a representative of his bank to assure that the project can be finished as promised. All customers ought to be contacted by email as soon as possible and invited for this meeting or without the possibility to be present have their questions answered. I was told that progress will go hand in hand with the transfers, but I shall have more confidence when a bank can give me assurance.

Obviously Wisepower has liquidity problems. What about solvability? The buyers need clarity of financials, but who can be trusted? Progress will go hand to hand with transfer, so they said.

But how can we be sure they will use the money to complete the project. Secondly is this enough to finish?

Or maybe they need the money to pay other debts regarding LaRoyale or even other ones.

A bankguarantee has to be arranged by Wisepower asap, although they always assured and reassured us that there is a bankguarantee so our apartment will always be finished. But what about the completion of the project?

I also will be more confident when a bank gives the assurance.

[desertrat]

K-TECH ?? I thought they were boracic..Their "Yard/HQ" along Bang-Na is a deserted ghost town..unless they've moved elsewhere.

[KhunTao]

The structure whereby the money paid to Wise Power by means of actual transfers (approx. 15 units so far at 60% of original purchase price each) is used by Wise Power to successfully complete remaining units is risky in my opinion, for three reasons:

1) The financing bank may possibly take these funds first in order to reduce its project loan to Wise Power (we don´t know ...),

2) Wise Power could use these fungible funds for other general treasury purposes (we don´t know ....), and

3) This structure could create a situation whereby the purchasers of the units will play a waiting game, i.e. wait for other buyers to accept transfers first in order to reduce construction completion risk. In an extreme case, where everyone is waiting for eachother to make a move first, this leads to stalemate.

As stated by the previous poster, Wise Land and its financing bank will have to communicate effectively with the buyers in order to raise confidence levels (very similar to the nature of the current international asset pricing crisis, i.e. caused by lack of confidence rather than underlying economics).

Edited October 8, 2008 by KhunTao

[basjke]

I have been in Pattaya for a month now to see the progress of my condo at LaRoyale. I had personally talked with Eric Lai for an hour and his architect Khun Saeg and of course Khun Chai. We do see progress but what is totally lacking is the initiative of Wise Power to get in touch with its customers. I do not want to get into details of tiles, colour and lot of work to be done but stressed for a meeting to be held with the future condo owners, to demand an explanation from Mr. Lai and a representative of his bank to assure that the project can be finished as promised. All customers ought to be contacted by email as soon as possible and invited for this meeting or without the possibility to be present have their questions answered. I was told that progress will go hand in hand with the transfers, but I shall have more confidence when a bank can give me assurance.

Obviously Wisepower has liquidity problems. What about solvability? The buyers need clarity of financials, but who can be trusted? Progress will go hand to hand with transfer, so they said.

But how can we be sure they will use the money to complete the project. Secondly is this enough to finish?

Or maybe they need the money to pay other debts regarding LaRoyale or even other ones.

A bankguarantee has to be arranged by Wisepower asap, although they always assured and reassured us that there is a bankguarantee so our apartment will always be finished. But what about the completion of the project?

I also will be more confident when a bank gives the assurance.

I don't know personally Wise Power or any of the company's involved in La Royale but I've 2 eyes,2 ears and a brain and from what I've seen and heard about mentioned project a fool can tell you that something serious is wrong there.

I know Pattaya real estate is healthy as never before but please keep in mind that all those banks and mortgage company's that went broke all over the world in the last 6 months were all healthy as never before only a few days earlier.

And I don't think that the Thai government will come up with a 700 billion baht rescue package to save those Farangs that invested here.

[KhunTao]

Has there been any new development in respect of La Royale, eg.

a). any further transfers over and above the 15 reported earlier ?,

. any new sales resulting in further cash for Wise Power to complete some more units?,

c). any bank financing secured by Wise Power neccessary to fully complete the project, including the morose state of the low rise units in front of and behind the tower ?

Edited October 20, 2008 by KhunTao

[Pdaz]

To paraphrase a movie title...

''All Quiet On The Eastern Front''

[perry21]

I have not completed on my unit yet. There is still a reasonable amount of final rectification/snagging work to be completed which is dragging on. It is extremely disappointing that so little progress has been made with the low rise units at the front and rear of the development. In their unfinished state they are a real eyesore.

I am curious to know how many other readers out there are waiting to complete.

[wcr]

Seems like there a lot of dissatisfied purchasers?

[Eastcoast]

Gee, don’t check in with TV for a few days and doubts are rising again!! As stated in earlier posts, please contact me directly and I will try and get your questions answered fully and correctly.

I will try and give brief answers to some of the questions in previous posts and update you as to progress etc with La Royale below.

The final payment of 60% is split 55% to the TMB Bank and 5% to Wise Power. This is one of the main reasons the cash flow is tight. No secret there. Once the loan is down to around 200,000,000 Baht this will be relaxed and more money will be freed up for the development of the front and back buildings.

At present to bank loan has been reduced from 440,000,000 Baht to 345,000,000 Baht. We have confirmed transfer dates for over 100,000,000 Bahts worth of 60%’s over November/December already and many more purchasers visiting over the coming months. They really only need around 10 more units to decide to transfer and then Wise Power can concentrate fully on the main task which is the construction of La Royale.

At this time there are various units being worked upon but the statement about the work going hand in hand with completion is correct. They can only finish units that are willing and ready to transfer at this stage. They do not, at this moment, have the funds to complete units that will wait until the completion of the entire project before they will transfer. I would hope that the clients that do not wish to transfer would respect this as a wise business move and let Wise Power use their working capitol on units that they can turn over and reduce the bank debt with. Nobody wins if money is tied up for and extended period in units they cannot transfer. Please be patient (big ask, I know!) your time will come.

There was 1 sale in the last month, which frees up a decent amount of working capitol for Wise Power. The first 45% on every unit is paid to Wise Power so if we can get only a few more over the coming months this would also ease the tight purse. Any buyers out there? Again deals are to be had…….

We at East Coast have been working incredibly hard over the last couple of weeks trying to organise Wise Power staff, setting up a better paperwork system and informing client by client of the actual stage and cost of completion of their units. We have now completed most tasks and have exact quotations on completing almost half the units. Now we can assist them by managing their finances properly and making sure the available funds are used in the correct areas instead of just being lost over the entire project with no one thing being completed. Hopefully you will see major improvement over the coming months.

In response to WCR. Your statement is more than correct. I don’t think there are ANY satisfied purchasers in La Royale at this time and that includes me but I’m not sitting back and doing nothing…… I’m trying to get it completed and make sure that it is a building we can be proud off. Still working on the guys at the top on the paint job. I will get that changed if it kills me!!!

Again, please, if you are a purchaser and have concerns or questions please contact me directly. I will try and get answers for you.

David

East Coast Real Estate

Edited October 22, 2008 by Eastcoast

[djinn]

2 friends told me yesterday (feb 4),workers in La Royale were stryking and blocking access to the building even for owners... because they didn't receive salary for ...6 months

Can anybody confirm?

[Chopper]

2 friends told me yesterday (feb 4),workers in La Royale were stryking and blocking access to the building even for owners... because they didn't receive salary for ...6 months

Can anybody confirm?

djinn, there is an article here.

[djinn]

2 friends told me yesterday (feb 4),workers in La Royale were stryking and blocking access to the building even for owners... because they didn't receive salary for ...6 months

Can anybody confirm?

djinn, there is an article here.

Thanks Chopper,I just saw one article too.

[inventorinthailand]

Hi,

I was looking to rent a front corner unit at La Royale but THREE different real estate agents have advised me not to due to unfinished common areas, building of Centara and another objects right next door and some other problems. Should i avoid this building?

Edited February 7, 2012 by inventorinthailand

[prefabs]

you had 3 opinions already. How many more do you need?

[inventorinthailand]

you had 3 opinions already. How many more do you need?

Actually i had hope to get some input from people who actually lives there.

Edited February 7, 2012 by inventorinthailand

[PattayaParent]

I remember David of East Coast Real Estate posting (maybe in this thread) that he was buying there, maybe try a PM?

[guzzi850m2]

you had 3 opinions already. How many more do you need?

Actually i had hope to get some input from people who actually lives there.

Go and have a look yourself or with a real estate dude and then make up your mind.

[pauljones]

you had 3 opinions already. How many more do you need?

Actually i had hope to get some input from people who actually lives there.

Walk around the building and talk with people living there.

[sirbrinkie]

Hi,

I was looking to rent a front corner unit at La Royale but THREE different real estate agents have advised me not to due to unfinished common areas, building of Centara and another objects right next door and some other problems. Should i avoid this building?

Iam sure you will be able to get some great rental deals - all very big units - most common areas are finished and will be in the next few months - only major drawback is that there is zero public transport - you need your own - plenty of safe parking