by kevinyeo | Sep 16, 2018 | News
SET-listed property firm Singha Estate Plc (S) has shifted to partner with Japanese contractor, Daiwa House Industry Co, for residential developments after joining Hong Kong-based investment firm Hongkong Land Ltd last year in a condominium project.
Chief executive Naris Cheyklin said the partnership with Daiwa House will help Singha Estate scale up investment in the future to develop larger projects like mixed-use facilities.
“Our financial status is strong but having an overseas investor can support large-scale investments in the future,” he said.
Next year Singha Estate plans to spend 8 billion baht to acquire at least four plots of land for development of new property projects, up from 6 billion baht allotted for this year. Of the amount, it already spent 3 billion baht.
“This will be a long-term partnership,” said Mr Naris.
“Daiwa House has experience with building low-rise house and high-end condos with prefabricated construction techniques that we can learn from.”
As labour wages in the near future will likely rise to 500 baht a day, which will increase construction costs, prefabricated construction will help ease that risk, he said.
The move will also shorten construction time, which also reduces financial cost.
Singha Estate yesterday announced a partnership with Daiwa House Industry in Eyse Sukhumvit 43, a low-rise condo project worth 2 billion baht, after six months of discussion in the joint venture.
In the partnership with Daiwa, the construction time for the project will be 10% shorter or a few months less than two years.
Last year Singha Estate had a joint venture with Hongkong Land in a luxury condo project, The Esse Sukhumvit 36, worth 6.5 billion baht near Sukhumvit Soi 36, which was launched late last year.
However, Singha Estate will likely join with the Hong Kong property investment group in only one project as the latter’s business style does not mesh with Singh Estate’s.
“Hongkong Land is a very large firm with an aggressive style that may not match ours,” he said.
“The Japanese partner is quite cautious, with slower decision-making.”
After partnering with Singha Estate last year, Hongkong Land partnered with SET-listed residential developer Property Perfect Plc in May 2018 to develop two luxury single detached housing projects together worth 10 billion baht, due to be launched this year.
Robert Wong, chief executive of Hongkong Land, a member of the Jardine Matheson Group, said in May during a visit to Bangkok the company is eyeing a high-end office tower development through a joint venture with Central Pattana Plc (CPN), with holdings at 49% and 51%, respectively.
Both are designing a high-end commercial property project on a 25-rai plot on Wireless Road that was previously owned by the UK embassy, which they purchased for £420 million (17.8 billion baht) from the British government early this year.
S shares closed yesterday on the SET at 3.48 baht, up six satang, in trade worth 145 million baht.
by kevinyeo | Sep 12, 2018 | Buying Guides
Investing in Bangkok Properties is not always smooth sailing. We as investors of overseas properties must always understand and be aware of the various risks involved.
Only when we understand and are comfortable with the risks then should we get committed to a purchase. And that is the very same exact reason why we started InvestBangkokProperty.com.
Our aim is to empower would-be investors with the knowledge to make a discerning investment decision. Rather than be rushed into buying because of hype or over promises.
Risks are across the board and there are no investments that have no risk at all.
In this video below, we share what are the risks you have to be aware of when buying a property in Bangkok. And how you can potentially mitigate them.
Some of the points covered are:
- Exchange Rate Risk
- Political Risk
- External Risk
- Recession Risk
- Scam Risk
- Non Completion Risk
- Late Completion Risk
- Defects Risk
- No After Sales Support Risk
- Other Risks
We hope this explainer video will give you more clarity in your investment decision. If you have got further questions, please feel free to leave a comment or you can contact us at [email protected] and [email protected].
by kevinyeo | Sep 10, 2018 | News
With relatively high down payments and more attractive gains and investment yields than those available in their home countries, foreign buyers are unlikely to shed their Bangkok condo units any time soon, say property analysts, developers, and other experts.
Therdsak Thaveeteeratham, executive vice-president for the research division at Asia Plus Securities Co, said concerns over the transfer of condos sold to foreign customers will be minimal since most off-plan projects ask for a high down payment from these buyers.
“We should rather be worried about Thai speculators, as off-plan condo projects usually collect a down payment of 5-10% of the unit price from Thai buyers,” Mr. Therdsak said. “They collect as much as 30% from foreigners.”
Tritecha Tangmatitham, managing director of SET-listed developer Supalai Plc, said the company collects a higher down payment from foreign buyers who book a condo at an off-plan project than from Thai customers.
“High down payment collection can minimize risks,” Mr. Tritecha said. “Buyers are unlikely to refuse to get a unit transfer when construction of a project is completed, as their payment is quite high.”
Supalai collects a down payment of 25-30% of the unit price for an off-plan condo unit from foreign buyers, compared with 15-20% collected from Thai buyers.
Down payment for Thai buyers is a series of installments, paid monthly for a certain period in line with construction time. For foreigners, down payment is a one-time sum of money on a booking date, as this is more convenient. The rest will be paid in the transfer period.
Supalai began applying these rules to foreign buyers in the past two months after the company was approached by an overseas sales agent earlier in the year about a new condo project near Sukhumvit Soi 117.
Phattarachai Taweewong, senior manager in the research department at property consultant Colliers International Thailand, said foreigners buying condo units in Bangkok are mostly investment buyers.
“Bangkok condos will become more popular among buyers from overseas, particularly those from Hong Kong and Singapore, as they have cooling measures in place on property purchases in their countries,” Mr. Phattarachai said.
This situation will both shift new buyers’ interest from these destinations to Bangkok and retain existing foreign buyers to continue their investment in Bangkok condos, he said.
In popular tourist destinations for foreigners, like Phuket and Pattaya, the foreign quota of 49% of the total saleable area is full at many condo projects. If a foreigner wants to resell, there are always new foreign buyers eager to step in.
“In Phuket and Pattaya, some developers whose condo projects have a full foreign quota offer foreign customers a long-term leasehold for the remaining 51% under the Thai quota that cannot be sold to foreigners,” Mr. Phattarachai said. “Though it may not be worth it to do so when compared with a freehold sale, developers need to do it because the Thai buyer market is weak.”
Since last year, there is growing interest from buyers from mainland China in property in Japan and Southeast Asia, specifically Thailand and Vietnam, according to financial consultant UBS.
Key reasons include recognition of China’s One Belt, One Road programme and the substantial infrastructure investment it entails, together with attractive pricing.
The flagship Eastern Economic Corridor is expected to attract more foreign experts and researchers to Thailand, given the significant tax breaks for companies and individuals — an arrangement that could lead to additional foreign buying of property.
Also, Thailand benefited from 35.4 million tourist arrivals in 2017, with Chinese arrivals up 400% in the last five years, leading to more second-homes bought by foreign buyers, UBS said.
Sansiri had the first-mover advantage, while AP Thailand focused on capitalizing on foreign buyer interest. In conversations with these two developers, UBS said foreign presales continued in an uptrend in 2018.
According to Sansiri, foreign presales totaled 3.1 billion baht in the first four months of 2018, up 11% from the same period a year earlier and on track to meet full-year guidance of 13 billion baht.
Sansiri said 80% of the buyers were from Hong Kong and mainland China. The desirable price point continued to be 160,000-170,000 baht per square meter.
AP painted a similar picture, noting a pickup in foreign interest. The developer’s new condo project in the Asok-Rama IX area launched in the fourth quarter of 2017 and was 30% sold to foreigners, mostly Chinese.
The proportion of sales to foreigners is up significantly from 10% on average in 2016. The average selling price of the AP project was 130,000 baht per sqm or 4 million baht per unit.
Vittakarn Chandavimol, chief of the condo business group at AP, said the company recorded 9.7 billion baht in condo presales last year from foreign customers, up from just 80 million baht in 2015.
“Bangkok condos attract foreign investors because they generate higher capital gains than those available in their home countries,” Mr Vittakarn said. “In Hong Kong, the maximum annual yield from property investment is 2.5%, while a Bangkok condo can generate 5-6% a year.”
According to Bangkok Citismart, a property agency firm owned by AP, the average price of newly launched condo supply in the middle- to the high-end segment in locations attractive to Chinese buyers continues to rise.
In the first quarter of 2018, the average price of a new condo in the Asok-Rama IX-Ratchadaphisek area, the most popular location among Chinese, rose by 46% to 185,000 baht per sqm from 126,915 baht in 2013.
The sales rate of condo supply in this area was also high, with 90% sold out of 14 projects launched during the past five years.
Mr Vittakarn said AP in the first seven months of 2018 posted 4 billion baht in presales from foreign buyers, accounting for 20% of the company’s presales in those periods totaling 20.98 billion baht.
AP expects to have 10 billion baht in presales from foreigners from total presales of 33.5 billion baht that it targets in 2018.
Prasert Taedullayasatit, chief executive for premium business at Pruksa Real Estate Plc, said the company last year posted 6 billion baht in condo presales involving Chinese buyers. This year it will transfer condo units worth 1 billion baht in the Huai Khwang area to Chinese.
“Condos from a developer completed last year and transferred to Chinese buyers were seen as no problem,” Mr Prasert said. “But today there may be a problem about money transfer from China.”
Tiensak Thamcharonkij, chief financial officer and co-founder of Tongthai Group, a provider of Chinese-language property websites and travel magazines in Thailand, said Chinese buyers will not dump condo units in Bangkok after placing a high down payment.
“Earlier there were some Chinese buyers dumping Bangkok condo units they had booked after they were unable to resell the units that were completed and scheduled for transfer,” MR Tiensak said. “This was because down payment collected from them was low at 5-10%, the same rate for Thais.”
He said these buyers were advised by unprofessional agencies telling them to split their investment budget and book multiple units with low down payments.
Phanom Kanchanathiemthao, managing director of property consultant Knight Frank Chartered Thailand, said some mainland Chinese who buy condo units in Thailand may see an impact from China’s tightened capital controls issued last year.
The impact will eventually lessen, however, as these buyers will find an alternative means to transfer their money from the home country anyway.
“Chinese are smart investors,” Mr Phanom said. “They can find one way or another to transfer money to get condo units.”
source: https://property.bangkokpost.com/news/1520686/foreign-buyers-cling-to-city-condos
![[Review] The Room Sukhumvit 38 – 700 meters to Thonglor BTS](https://investbangkokproperty.com/wp-content/uploads/2018/09/Garden-18th_2.png)
by kevinyeo | Sep 4, 2018 | Reviews
Thonglor is definitely one of the most desirable upscale neighborhood in Bangkok. If you are looking out for a quality development in Thonglor. Check out The Room Sukhumvit 38 by Land and Houses.
About The Developer: Land and Houses
Land and Houses is a leading public listed property developer in Thailand. Land and Houses Public Company Limited, founded in 1973, operating property development business, was established to be a company limited on August 30, 1983. The company operates property development business selling detached houses, townhome, and condominiums in Bangkok, perimeters and major provinces such as Chiangmai, Chiangrai, Khonkaen, Nakhonratchasima, Udonthani, Hua Hin, Phuket, Mahasarakham, and Ayuthaya.
The Location
As the name suggests, The Room Sukhumvit 38 is located along Sukhumvit Soi 38. The development is about 700 meters away from BTS Thonglor.
Soi 38 is a cul-de-sac and are mainly occupied by landed houses. There is also a handful of upscale condo such as Ashton Morph 38 by Ananda.
Living in Thonglor means you have access to some of the best restaurants, malls as well as the many international schools in the area.
Project Highlights
This is an upscale development, which is evident in the low density of units in the entire 26-storey tower (only 229 units). There is also a high ratio of carpark lots to units.
The units built are spacious, starting from 44sqm for 1 bedroom units.
Below are some photos of the actual show unit.
This is an aerial view photo taken by a drone (approximately 16th floor). The surrounding are mainly landed houses. So a mid floor unit will already get a good clear view all around.
The Room Sukhumvit 38 (16th Floor/49M.)
Rating The Room Sukhumvit 38
First of all, this is a project that is 100% livable and I think there will be a good number of buyers who are end users. These could be the affluent Thais as well as overseas investors who are typically more familiar with Thonglor as an investment location.
The Room Sukhumvit 38 spots superior finishing and I would classify it as A Grade investment property.
If you refer to the map above, you will also notice the planned Sukhumvit 38 station on the proposed grey line. If the line is completed, this will definitely give a massive boost to property prices along Sukhumvit 38. However, please do note that construction has yet to start for this proposed grey line. So while having it in the future is a major plus, you should not base your investment decision purely on this.
The price point for The Room Sukhumvit 38 averages about THB 250,000 per square meter. This is in line with the project’s location and quality. Prices for the 1 bedroom starts from 10MB.
As a point of reference, Esse 36 which is located right next to Thonglor BTS, is currently selling for about THB 350,000 per square meter.
The sales gallery of The Room Sukhumvit 38 is now open for interested buyers. For anyone who might be interested, you have to pay THB50,000 for a queue number in order to be eligible to select a unit on the actual launch day. This THB 50,000 will work towards part of the deposit if you choose a unit successfully on launch day, or refunded if you choose not to proceed with the purchase.
Currently, there is also a VVIP discount of THB 200,000 to THB 400,000.
If you would like to find out more about this property, get the e-brochure or the floor plan, please contact us @ +65 98283196 or email [email protected]
by kevinyeo | Sep 1, 2018 | News
Office rents across Bangkok continue to hit record highs as landlords take advantage of an increasingly tight supply situation that has seen vacancy rates stabilize in the single digits, sustained levels not seen been since the late 1980s.
Rising rents and falling vacancies are being driven by a flight to quality – tenants relocating and in most cases expanding – from older buildings to new projects.
More than 68% of Bangkok’s current office stock is more than 20 years old and most buildings are rapidly becoming uncompetitive when compared with modern offerings.
Occupiers are increasingly drawn to newer properties such as AIA Capital Center, which offers a wide variety of lifestyle amenities including food and beverage options and an on-site fitness center. Others including Gaysorn Tower and FYI Center offer an abundance of attractive common areas that tenants can utilize.
As a result, rents in the prime grade (Grade A) segment are rising faster than those in secondary office spaces and the gap is widening.
Data from JLL’s Thailand Property Intelligence Center illustrates that the average gross rent for prime office space across Bangkok in July was 824 baht per square meter per month, 20% higher than the market-wide average rent of 668 baht, and 41% higher than the average gross rent of 513 baht for non-prime space.
Occupier flight to quality is also clearly reflected in different vacancy levels in the two market segments. Findings from JLL suggest that the average vacancy rates for prime and non-prime office spaces in July 2018 stood at 6.0% and 9.8% respectively.
Prime grade vacancy rates have held steady under the 7.0% mark since early 2016 while non-prime rates have only recently moved into the single-digit range. Thus, notwithstanding record-high rental levels across Grade A projects in the market, it is clear that many tenants in the market are willing to a pay a premium for Grade A office space, despite the significant difference in price relative to lower quality space.
We are seeing the same pattern play out in Bangkok’s central business areas (CBA), which include Silom, Sathon, Wireless, Childlom, Asok and Phrom Phong. Average prime grade rents in the CBA were up by 10.9% year-on-year to 881 baht per square meter per month in July, well above the 4.5% growth recorded in non-prime CBA average rents during the same period.
So what does this mean for the market in the future?
Through the end of 2019, there are 10 new office projects under construction that are available for lease totaling about 280,000 sq m of space. Approximately one-third of this space has already been pre-leased. Projects scheduled to be completed in the second half of 2018 have strong pre-leasing.
The T-One building near the Thong Lor BTS station and Lad Phrao Hills near the Phahon Yothin MRT station are nearly fully pre-let while Wizdom 101/True Digital Park near the Punnawithi BTS and Singha Complex near the Phetchaburi MRT station are reportedly between 50% and 70% pre-leased.
With tight vacancy and limited availability of space in upcoming projects, we expect rents to continue rising and keeping the market titled in landlords’ favor until at least 2021 when a new wave of supply is expected to come to market.
Andrew Gulbrandson is the Head of Research and Consulting at JLL. For more insights, readers can connect with him on https://www.linkedin.com/in/andrewgulbrandson/or visit www.jll.co.th
source: https://property.bangkokpost.com/news/1532238/prime-office-rents-soaring
