Bangkok Condominium Market Remains Healthy

[george]

Bangkok Condominium Market Remains Healthy

The supply of condominiums in the market totaled 43,940 units in the first quarter of 2006. The number of freehold condominiums increased by 1,062 units with eight new condominium projects completed while the leasehold total remained the same as in the fourth quarter of 2005.

Bangkok, Thailand (PRWEB) July 23, 2006 -– The supply of condominiums in the market totaled 43,940 units in the first quarter of 2006. The number of freehold condominiums increased by 1,062 units with eight new condominium projects completed while the leasehold total remained the same as in the fourth quarter of 2005.

The condominium vacancy rate increased slightly among both grade A and grade B condominiums by 2.4% and 1.3% respectively, with the occupancy rate declining slightly from 90.5% in the fourth quarter of 2005 to 87.9% in this quarter. This was due to the number of new units completed where owners were still decorating units.

The demand for condominiums either for investment or own use continued to increase in the Bangkok CBD ( http://www.cbre.co.th/cbre_thailand/NewRes...;WT.mc_id=50006 ) and peripheral areas such as Ratchadapisek Road, Paholyothin and the outer Sukhumvit Road. As a result of the increasing demand, the changing lifestyles among the new generation, rising oil prices and construction costs, the prices of condominiums have been rapidly increasing in Bangkok by 20-50% over the last three years. The top five nationalities with regard to foreign investment in the sector are British, American, Singaporean, French and Hong Kong Chinese.

SUPPLY

The total condominium stock significantly increased to 43,940 units in the first quarter of 2006, comprising 41,964 freehold condominium units and 1,976 leasehold condominium units. Eight freehold projects were completed during this quarter, with a total of 1,062 units, in Sathorn, Silom and the Sukhumvit area. These included three low-rise projects developed by Sansiri: Sathorn Plus by the Garden on the main Yenakard Road, with 70 units; Sathorn Plus on the Pond in the same area, with 77 units; and The Lanai Sathorn on Yenakard Road Soi II, with 34 units. The other developments were: Silom Grand Terrace on Soi Saladaeng on Silom Road, developed by Metro Star Property and with 240 units; Supalai Oriental Place on Suan Plu on Sathorn Road, being developed by Supalai and with 300 units; and another to projects from Noble Development called Noble 09 Ruamrudee on Ruamrudee Road with 39 units, and Noble Ora on Sukhumvit Soi 55 with 223 units. Another project that was completed was Avenue 61 located on Sukhumvit Soi 61 which was developed by the new developer, Bangkok Living Development, and offered 79 units.

The total future supply consists of 75 projects, with 15,400 units. These are expected to be completed within the next three years. Eight new projects, with 1,751 units, were launched in this quarter; Noble Ambience Sarasin, a low-rise building on Sarasin Road; Noble Ambience Ruamrudee, a high-rise building on Ruamrudee Soi III; VOGUE@Siam, a high-rise building on Petchaburi Road; One Siam, a low-rise building on Rama I; The Clover Thonglor, consisting of five low-rise buildings on Sukhumvit Soi 55/18; Emporio Place, two high-rise condominiums plus one home/office building on Sukhumvit Soi 24; One Thonglor Station, a low-rise building on Sukhumvit Soi 40; and One Sukhumvit 67, a low-rise building on Sukhumvit Soi 67 The majority of the new developments are still located in the Sukhumvit area (37.4%), Riverside/Rama III (28.9%), Silom/Sathorn (16.8%), Pathumwan (11.6%) and Central Lumpini (5.3%). The majority of new units are studio anc one-bedroom units aimed at the mid market.

Metro Star Property is planning to launch another one project, Suan Plu Grand Terrace in the second quarter of this year and Sathorn Grand Terrace at the end of this year. Both projects are located in the Sathorn area. Noble development also launched Noble Remix, consisting of a high-rise condominium, mini offices and retail units at the corner of Sukhumvit Soi 36, in the second quarter. Recap Investment, a Singaporean developer, launched the Millennium Residence, four high-rise condominiums, with easy access to Sukhumvit Soi 16, 18 and 20 in the second quarter.

DEMAND

The number of occupied freehold condominium units totaled 36,833 units (87.9% of the condominium stock), an increase of 352 units from the previous quarter. The number of the occupied freehold condominiums increased by approximately 16,399 units, from 20,921 recorded in the previous quarter.

Over the past five years, the number of occupied freehold condominiums has increased by approximately 16,399 units, from 20,921 units at the end of 2000 to 36,883 units at the end of first quarter of 2006, a rise of approximately 76.3%. Occupancy has also been increasing steadily by 1% quarter-on-quarter and 9.5% year-on-year. The overall vacancy rate in this quarter increased by 2.4% for grade A condominiums and 1.3% for grade B condominiums, when compared with the last quarter. This was due to the completion of new units.

PRICE

The average price for grade A completed condominiums increased in the first quarter of 2006 in all areas but especially in Sukhumvit. The Sukhumvit area had an average price increase of 14% while Silom/Sathorn and Central Lumpini increased by 5%.

About CB Richard Ellis

CB Richard Ellis Group, Inc. (NYSE:CBG), a FORTUNE 1000 company headquartered in Los Angeles, is the world's largest commercial real estate services firm (in terms of 2005 revenue). The Company serves real estate owners, investors and occupiers through more than 350 offices (including affiliate and partner offices) worldwide.

CB Richard Ellis established an office in Bangkok in 1988 and in Phuket in 2004. CB Richard Ellis (Thailand) Co., Ltd. has grown to be a leading real estate services provider, offering a full range of services including sales and leasing for all types of property, property and facilities management, valuation and advisory, and research and consulting. For more information, visit the company's website at http://cbrethailand.inetasiapreview.com/cb...?WT.mc_id=50006

--Press Release, www.prweb.com 2006-07-23

[pkrv]

Interesting the 14% rise matches what I have been told about The Park Residence - Chidlom. Below is a press release from Hemaraj, which mirrors the above. I too agree that the 49% rule has probably had its day. Bangkok has only grown in wealth and status since the rules were relaxed to counter the last property crash:

"Hemaraj almost fully booked

Buyers now busy with interior plans

With 82 per cent of its luxury units booked, Park Chidlom is cruising for an easy finish with the completion of its two towers in the next few months.

With Bt4.6 million worth of residential condominiums already booked, the company is left with a little more than 40 apartments to sell. The remaining units should fetch more than Bt1 billion for the company.

David Nardone, chief executive of Hemaraj Land & Development, the developer of the 5.4-rai enclave for upper-end buyers, said the company was now devoting quite a bit of time to servicing clients keen to furnish their apartments.

"Every day we get buyers who come in to speak to the interior designers about what they want to do with their condominiums," he said.

The sales office on Soi Chidlom is constantly abuzz with designers and buyers going through the floor plans while the two towers are being built just a few metres away.

Park Chidlom will be the largest high-rise condominium in Ploenchit, one of Bangkok's prime inner-city zones.

The estate comprises two buildings: the 35-storey Somkid Tower and the 28-storey Chidlom Tower. Together they contain 219 units, each ranging between 140 and 310 square metres in floor area.

But even with the success of Hemaraj's first residential endeavour, Nardone is cautious about embarking on yet another condominium project.

"We will not buy at any price," he said, adding that current market conditions require a degree of prudence. Land prices in some areas have remained at giddy heights despite weaker conditions in the luxury housing market.

Among the things that could spur the market out of the doldrums, said Nardone, was for the government to consider expanding the 49-per-cent foreign ownership law and to make it easier for foreigners to buy properties in Thailand.

He said it would make sense for the government to streamline the process for expatriates to buy homes. "On the one hand the Board of Investment is trying hard to encourage foreign firms to come here, but at the same time, the current regulations make it hard for foreign investors to buy condominiums."

Meanwhile, Hemaraj is keeping busy by attending to its other divisions, mainly its core industrial estate business.

It also has interests in factory construction, petrochemical, energy and turnkey facilities, Nardone said.

The present strategy calls for the company to consolidate its industrial estates in Rayong and Chon Buri, as well as building a power plant in Map Ta Phut.

Hemaraj has over the past year expanded its industrial land from 8,600 rai to 17,000 rai because of strong demand from global companies such as General Motors, Ford and Mazda.

Source : THE NATION : Jul 24, 2006"