Commercial Property Market in Pattaya

[sharecropper]

I've taken my eye off the commercial property sector here for a while, but today I spotted a new ad for the Shenanigans unit the (now-closed) pub in Jomtien Complex. It's 500 sq metres and they want 180,000 baht a month for it. (21 million to buy).

I thought these figures were very high for non-prime space in a tanking market with few regular customers to be had. Maybe that's why there are so many commercial units for sale/rent all over town - unrealistic, over-optimistic rents?

[KittenKong]

I thought that the previous tenant was paying 250,000B? Either way, ridiculously overpriced as is demonstrated by the fact that it has been empty since the beginning of the year and looks like staying so indefinitely. There are also several other similar establishments that are empty within a very short walk.

I've known Pattaya since the early 80s and the one absolutely consistent thing in all that time has been oversupply of all types of property, empty and unused buildings, and businesses starting up only to go out of business a few months later. Often one sees a business starting exactly where an apparently identical one failed only a few months before.

Shop-fitting and sign-making are the only good businesses to be in here.

[Asiantravel]

surely the demographics to support those kind of places have changed and gone forever?

I mean I can't see many Chinese or Indians going there and to me it seems like western retirees are destined to be a dying breed because there are so many problems brewing with pension funds

[sharecropper]

I thought that the previous tenant was paying 250,000B? Either way, ridiculously overpriced as is demonstrated by the fact that it has been empty since the beginning of the year and looks like staying so indefinitely. There are also several other similar establishments that are empty within a very short walk.

I've known Pattaya since the early 80s and the one absolutely consistent thing in all that time has been oversupply of all types of property, empty and unused buildings, and businesses starting up only to go out of business a few months later. Often one sees a business starting exactly where an apparently identical one failed only a few months before.

Shop-fitting and sign-making are the only good businesses to be in here.

Talking of which, today I saw a vegetable shop opening in a much-gone-bust retail unit outside Royal Hill Condotel on Thappraya Road. I don't know what their rent is, but it can't be free, and I'd love to know how much they have to mark-up their vege to to cover it.

[Global Guy]

One thing l noticed is that rents and listing prices have very little relation to reality. If a fortune teller told the seller a price then that's what it lists for. If they saw a similar shop in another country sell for a certain price then surely that will be the selling price here.

The concept of market valuations is absent. It really is not based in reality. Don't even apply Western real estate principles here....it's like dating.....no logic present.

Edited July 13, 2016 by Global Guy

[cmrichsw]

This is what happens when a lot of dirty money ends up in one place.

[tomacht8]

180,000 Baht per month for 500 square meters?
You'll probably only work for the Landlord.

21.000.000 with 3% interest is = 630.000 Baht /12 = 52.500 Baht/month
Maybe you can buy it and rent it out by yourself to others for 100.000 Baht a month,
then you have 5,71 % static interest,
if you can rent it out over the entire term.

Edited July 13, 2016 by tomacht8

[morrobay]

Yes it seems that the laws of supply and demand do not apply in Pattaya because alot of these empty commercial buildings were bult to just park some cash.

While some developers and owners just do not care if building stays vacant ( because there is no property tax) it would seem that this should not apply to all.

And that this oversupply would have adverse effects on those who are trying to sell or rent. That is prices should come down to reality.

[sharecropper]

By way of a postscript - that Shenanigans space must have been properly measured since I originally posted, and they have changed the ad to 520 square metres from 500 sq m.

How much do you think some idiot has advised them to sell the extra 20 square metres at?

Originally the 500 sq m was being sold at 21 million baht. Now the extra 20 square metres has added an astonishing 2 million baht to the new sale price of 23 million baht.

Good luck with that....

Edited July 16, 2016 by sharecropper