SOMPORN THAPANACHAI

Bangkok House Builder Co has spun off a subsidiary, Small House Builder Co,to build small houses on plots sized as small as 25 square wah at prices between 1 million and 2 million baht a unit.

The company said it found strong demand from small-plot land owners who want homes from professional builders. This customer segment uses smaller contractors so they risk not receiving quality units or contractors leaving jobs unfinished.

Sutee Ketsiri, the company’s managing director, said a 25-square-wah plot, the smallest allowed in the market, should have a minimum width of eight metres,sufficient to build a two-storey unit to accommodate three to five people. The company already offers 15 contemporary designs of two- and three-storey units.

Bangkok House Builder used to focus on building residential units at the lower end of the price spectrum from 1 million baht.

After more than a decade in business,its pricing has moved up to 2-5 million baht.

Bangkok House Builder is a subsidiary of Built to Build Co, which from now on will cater only to customers with budgets of 5-20 million baht a unit.

The group targets total sales this year at 930 million baht: 400 million from Built to Build,350 million from Bangkok House Builder and 180 million from Small House Builder.

Mr Sutee said Small House Builder will use the back office of the parent company for lower overhead costs. The group also has its own prefabrication factory that will help control construction costs and speed up building time, even as prices of construction materials such as cement and steel are rising.

“It’s a challenge to build a two-storey house from 1 million baht, but we believe we can do it and still maintain quality.There is much potential in this segment but building companies don’t want to enter the market to compete with small contractors,” he said.

He expects the overall homebuilding business will grow by 5-10% this year to about 50 billion baht, with units priced at 1-2 million baht taking 40% of the market, followed by 30% for houses at 2-5 million baht,20% for units at 5-10 million baht, with the remainder priced above 10 million.

Local comedians perform at the launch of the Small House Builder Co. It expects to focus on houses priced between 1 million and 2 million baht.

The new company’s designs can be built on lots as small as 25 square wah.

Source:.reic.or.th

The rapid development of the Bangkok condominium market over the past 10 years has greatly expanded the options for Thais and foreigners considering the purchase of luxury condos. At the same time, the average price of a new condo in central Bangkok has jumped by more than 150% over the decade.

With the high selling prices of units in newly launched projects or brand-new buildings, some buyers may opt to purchase more affordable units in older developments. On a per-square-metre basis, the prices of some of these units could be as low as half of those commanded by units in newly completed buildings or those under construction.

Findings from Jones Lang LaSalle’s recent market study indicate that newly completed or luxury units now being built in central Bangkok are being offered for sale at prices ranging between 160,000 and 350,000 baht per square metre, whereas units in older luxury buildings (aged 10 years or more) in the same area are available at between 90,000 and 120,000 baht per square metre.

Although there are still compelling reasons to buy for investment, buying a used luxury condominium in the centre of the city as a residence is now a sound decision. The strong competition in the leasing market due to the rapid growth of new condominium supply has put downward pressure on rents. Many owners who bought condominiums for investment purposes many years ago may now find it difficult to let their units as most tenants prefer newer buildings. For this reason, certain investors are keen to divest their holdings. As a result, many luxury units are available at attractive prices and offer good value for money to those looking to buy condos to live in.

As mentioned earlier, there are still opportunities to purchase an older condo as an investment. Units in certain buildings, as old as 20 years, that are well designed, well located and well managed, continue to enjoy high demand from tenants. They also have the potential to enjoy capital appreciation over the long term as sites available for new developments are becoming scarce, while development costs continue to rise.

Managed by Jones Lang LaSalle, Langsuan Ville, an eight-year-old building on Langsuan Road, is a prime example. Resold units in this building are currently fetching between 90,000 and 100,000 baht per square metre. The building also sees continued leasing demand, with one-bedroom units achieving an average monthly rental of 40,000 baht.

While the decision to buy a unit as a residence relies mainly on the buyer’s personal preferences and affordability, the purchase of a used unit as an investment is generally a more complicated process as more factors must be taken into consideration.

Tenant preferences count. Location should come first in the selection criteria. Location in the heart of the city does not necessarily guarantee marketability. The unit must also offer proximity to amenities (shopping centres, restaurants, schools and hospitals), access to mass transit and main roads for commutes by private car. Space efficiency and communal facilities are also important. In this regard, most of the older buildings in the luxury segment offer relatively larger common space and full recreational facilities, including large swimming pools, fitness/sauna rooms and tennis courts, which are not typically provided in many new condominiums.

Rental demand from locals is limited, so tenants are most likely to be foreigners living in Thailand. Many nationalities have preferred locations, amenities and furnishings, among other things. The largest group of expats officially working in Thailand is the Japanese.

However, the number of nationalities, particularly from other parts of Asia, have been consistently increasing as evidenced by the numbers of work permits issued. Nevertheless, European and US expats tend to have the highest housing allowances. Consideration should be given to who the target tenant of an investment will be.

The unit must be maintained in a like-new condition. In this respect, an investor may have to make a big cash outlay to refurbish a unit prior to putting it up for rent. Jones Lang LaSalle’s Project and Development Services division estimates that a full refurbishment of a condominium unit, including full Grade A furnishings, costs in the range of 40,000 to 50,000 baht per square metre. After renovation, a 20-25% increase in rent can typically be expected.

The condition of some condominium buildings can deteriorate with age _ as can the asset value. Therefore, the quality of building and property management is another key factor.

Rental strategy must be realistic. Condominium rents can vary greatly, depending on location, quality and age of the development, unit size, fittings and furnishings. Generally, brand-new units achieve rental rates 25% higher than used units of the same quality in older buildings in the same location. An investor in an older unit might be satisfied with a lower rental rate as it may actually reflect a higher yield.

Given the varying needs of each individual, the decision to buy a used condominium in Bangkok should be carefully weighed. As a primary residence, the decision comes down to finding something suitable to one’s lifestyle and simply weighing up the affordability and value of older versus newer units. As an investment, obtaining a high return comes down to identifying the right unit and negotiating a good price.

In the end, consulting a professional agent will help you minimise the uncertainty and help you set realistic expectations at the outset.

Source:metroparksathorn.com

Yuthachai Charanachitta, the third generation of the Ital-Thai Group, aims to rebrand the group by focusing on its five businesses and study into that is expected to be completed this year.

“When you think of the Ital-Thai Group, you think about the contractor business – Ital-Thai Development. However, our group also has many other businesses and we are studying to rebrand the group by classifying our business in a way that will give a clear picture about the group,” Youthachai, who is director of Ital-Thai Development, said.

Currently, the group has five businesses. Ital-Thai Development runs the contractor business, which generates total revenue of more than Bt40 billion a year. It also runs a cement manufacturing plant, and a steel plant. Then there is Ital-Thai Engineering.

The group also has a trading business involved with wineries.
The group’s real-estate business is managed by Amari Estates, while its hospitality business under the Amari brand is managed by ONYX Hospitality Group. The company has a registered capital of Bt700 million with the Charanachitta family holding a majority stake.

For the real-estate business, the group has set up Amari Real Estate Co with a registered capital of Bt400 million. The first project was the Amari Residences Hua Hin, worth Bt2 billion, that was launched last year. It is expected to be completed in 2011 with transfer to customers in the third quarter of this year. Yuthachai, who is also the chief executive officer and president of Amari Estates Co Ltd, said the company will generate total revenue of more than Bt1 billion this year from its Hua Hin project.

The company also plans to launch the latest condominium project in Patong beach in Phuket worth more than Bt2 billion in this year. This project will offer a 30-year lease to buyers with the right to renew after 30 years. The company also offers management for this project by Onyx Hospitality Group.

This project will have 200 units. Of the total, 10 will be villas at a price of more than Bt200 million per unit, and the other 190 units will be low-rise condominiums at a starting price between Bt7 million and Bt8 million per unit, starting at 50 square metres per unit. Pre-sales will start in the second quarter of the year with construction beginning next year. Nearly 55 per cent of its target customers are foreigners. Amari Estate Co also plans to launch three or four projects in 2012-2013 worth more than Bt1 billion per project. They will be located in Phuket, Hua Hin and Pattaya.

“In Phuket, it will be located on Nai Han beach, in Pattaya negotiations are going on for the land, while in Hua Hin the land has already been acquired,” he said.

Meanwhile, its hospitality business, Onyx Hospitality Group plans to manage 51 properties by 2018.

Currently, the company manages 33 properties in Thailand and overseas under four brands -Saffron, Amari, Shama, and Ozo. Thirteen of the properties are managed under the brand name Shama of which 12 are located in China, and one in Bangkok. There are 13 properties under the Amari brand, while seven properties are non-branded as some of them are managed under the customer’s brand, and some properties are still studying which brand will suit them.

Onyx Hospitality Group president and chief executive officer Peter Henley said the company will manage two or three new properties this year, and one of them is the Ozo Koh Samui . This hotel has an investment budget of Bt600 million.

The Oriental Residence Bangkok will be managed under the Saffron brand, while one in Maldives will be called Amari Addu Maldives. This will be the first hotel under the Amari brand outside Thailand. This project will undergo renovation and be opened this year. The company has signed a 20-year management contract for this project. The company also will sign contracts for five properties next year, he said.

Source:nationmultimedia.com

2010 represented a record number of launches, dwarfing the figure for 2009 according to the latest Bangkok condominium market report from Colliers International Thailand (CIT).

In Q4 2010 alone, over 20,000 units were launched for the whole of Bangkok, including the suburbs, while a total of newly launched condominiums for the whole of 2010 was 60,000.

It has reached the point that there are concerns of a supply bubble and recently the Bank of Thailand introduced a 90 per cent loan to value curb in order to cool the market.

According to the company’s senior research manager Antony Picon, these concerns are likely to be overblown. “Although 2010 was quite dramatic in comparison to recent years it simply means that developers are tapping into income levels largely ignored in the past and for 2011 this is likely to continue”, he said.

However, he did point out that this year would see a transition from boom to consolidation. He stated that take up has been slowing to some extent as buyers shop around a bit more to find the right unit and the days of selling out new projects in one day are largely behind us but launches are likely to lessen over the coming quarters.

“After all, developers also have to concentrate on building what they launched”, Picon added.

Meanwhile, CIT’s managing director Patima Jeerapaet believed that the market structure would remain strong this year. “ Large listed household names continue to dominate the market but smaller non-listed developers are dipping their toes into the market with smaller scale products and this makes for a healthy, competitive market” he said.

Patima also remains bullish for the condominium market. “ Bangkok’s population will continue to grow and incomes will also rise so there is plenty of future demand for the market to expand if at a lower pace than 2010”, he stressed.

While mass transit lines are a major factor in the condominium story, the picture is not all rosy. The latest research also indicated that there would be a good price premium as well as robust take up with projects located within 200 metres of a station. However after this distance the pricing benefit weakens and take up can be lower, especially within a 200-500 metre distance.

Picon also suggested that a paratransit service would become essential. He said: “Once you start to move more than 200 metres from a station then there is a greater likelihood of having to use some additional mode of transport.”

He also suggested to develop mass transit stations in the future as retail/paratransit hubs that provide efficient access from the condominiums to and from each station using regular feeder bus services or even a light monorail. “The retail component could serve as a community mall serving the needs of residences connected by the feeder systems,” he added.

Source:thailandrealestatemagazine.com

Condominium prices are expected to rise further by 20 to 25 per cent this year with the number of condominiums seeking new registration set to increase by more than 100, according to the Treasury Department.

Director-General Vinai Vittavasgarnvej said the department had valuated 4,600 registered condominiums nationwide, most of which are located in Bangkok and its environs, and provinces where there are many tourist sites.

The survey found condominiums with the highest prices now are located in the Sukumvit area, with unit price over 200,000 baht per square metre

The survey found condominiums with the highest prices now are located in the Sukumvit area, with unit price over 200,000 baht per square metre. It is projected that over 100 condominiums will seek registration this year. Most are located along the elevated and underground mass transit routes, and electric train routes and economic zones.

Mr Vinai said Treasury Department personnel have been sent to assess land prices in all provinces nationwide as part of an overall survey reviewing and re-valuating them for adoption in the 2012-2015 accounting period, set to begin Jan 1, next year.

Source:thailand-business-news.com