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High-rise market in Pattaya shows promise
The Spinnaker at White Sands
project in Pattaya is one of a number of high-rise, beachfront developments
attracting a lot of interest from property investors.
According to a new study done by CB Richard Ellis on the
Pattaya condominium market, sales have been better in high-rise projects,
especially those that are beach-front or have good beach-views, with 45% of
units at projects being marketed already sold. A number of recently launched
projects fall into this category, including The Cove, the Spinnaker and
Northpoint.
Around 30% of units in low-rise condominium projects have been sold. Generally,
these tend to be further away from the sea and have lesser views than competing
high-rise projects. Among low-rise projects, the highest sales rates were seen
in units priced at or under THB 5 million in Pattaya Town.
As a result of a number of large recent launches, overall sales for Grade A
condominium projects in Pattaya stands at just under 40% as of Q2 2008. Total
existing and future supply is roughly 3,500 units. However, 50% of these units
have been launched since the beginning of 2007, which is a factor in the low
overall sales rate.
In terms of pricing, the highest sales rates were achieved in less expensive
projects, those priced at or under THB 5 million. For high-rise projects,
though, there appears to be a strong high-end market as well, as almost half of
units priced at over THB 20 million have been sold already.
There exists a wider range of pricing for low-rise units, whereas all high-rise
units covered in this survey were priced at a minimum of THB 80,000-100,000/sqm.
Recent rises in construction costs, particularly the price of steel, an
essential material in high-rises, have served to push up prices at both high-
and low-rise developments in Pattaya.
Two- and three-bedroom units remain very popular in Pattaya, as many buyers have
families or prefer the extra space. In many cases, purchases by such buyers in
Pattaya are intended as second homes. A limited number of penthouse units are
also available; however, sold penthouse units account for only about 1% of the
number of total units sold in Pattaya.
Pattaya remains a favored destination for both local and international tourists,
with a total of 6.2 million tourist arrivals in 2007. This figure represents
9.1% y-o-y growth, and tourist arrivals have almost doubled since 2000,
underscoring the continual development of Pattaya as both a tourist destination
for foreigners and a weekend getaway for residents of Bangkok. A considerable
share of the activity in the Pattaya property market is driven by Bangkok
residents looking for a second or weekend home.
There are a number of large high-end launches planned for the second half of
2008, and it will be instructive to see how the market reacts to these
offerings. Newly released figures from the Land Department have shown
substantial activity in land transactions in Pattaya during Q1 2008, which is
expected to translate into increased development activity as well. As a resort
destination, Pattaya is dependant on repeat, high-end tourism activity for a
considerable portion of its property sales. If political concerns ease and
economic conditions improve by later this year, the property sector should
perform strongly going forward.
According to Ms. Linda Ord, General Manager of CB Richard Ellis Pattaya, “High
rise condominiums in Pattaya tend to be located beachfront or close to the beach
with good sea views and a full range of leisure facilities. As most buyers of
condominiums in Pattaya are purchasing a second home or holiday home, whether
they be Thai or Foreign, they want to be close to the beach to fully enjoy their
leisure time, hence the preference for high rise, beachfront properties. The new
high rise projects which are set to launch in the second half of 2008 are all in
prime locations, either absolute beachfront or with great sea views and as such,
are likely to continue to outperform the low rise projects in terms of number of
sales in the mid to long term.”
Note: This report was compiled by Aliwassa Pathnadabutr of CB Richard
Ellis Thailand.
Thailand’s top property developments not
at risk from escalating construction costs
Despite rising costs in construction materials, luxury
property developer Raimon Land insists the increases will not impact the
market’s upper end in Thailand nor impinge on the high specifications it has set
for its projects.
According to Raimon Land Chief Executive Officer, Nigel Cornick, developers at
the high-end of the market are in a much better position than those focusing on
projects aimed at the middle- and lower-end of the residential property market.
“High-end property buyers accommodate higher prices to a greater degree than
those seeking lower-end residences, who are much more price-sensitive. Premium
real estate buyers understand the reasons behind the increased costs and absorb
them,” Mr. Cornick said.
He reported that raw material costs such as steel and concrete are difficult to
control, as they are “staples” of the building industry and remain in high
demand.
“The price of steel has doubled in the past 12 months and has been going up on
an almost daily basis, prompting us to hedge by paying upfront to secure today’s
price. This is a very volatile situation compounded by considerable worldwide
demand driven by the huge appetites for these materials in China, the Middle
East and India,” Mr Cornick said.
Cornick added that prices for its upcoming 185 Rajadamri project would break
through the THB300,000 per square metre price barrier, which would be double the
average price budgeted when Raimon Land acquired the site some time ago.
However, he insisted that the quality of the product and location would be the
key factors in driving the price up over time, as any developer of premium
property would expect, and not the increasing costs of construction.
He added that Thailand still held a strong advantage over other countries in the
luxury condominium sector.
“There will be some convergence on price, but fuel costs overseas are higher
than they are in Thailand and the pricing here for property is still
considerably low if compared to regional or international markets. A lot of our
buyers still see property here as very competitively priced and of extremely
good value,” he said.
Some developers, especially at the lower end of the market, may look to design
and specification changes to lower their costs, especially on final finishes.
They may paint external walls rather than use stone or tiles, lower standards on
finishes to apartment interiors and public areas or cut corners on appliances,
sanitary ware, glazing and wood joinery works.
Raimon Land Development Director Gerry Healy, asserted that as a luxury
developer Raimon Land would not downgrade any of its specifications.
“Although there is a certain price to pay for a high level of design, we are
looking at all specifications and designs in great detail to ensure that there
is no wastage. We have addressed and refined our designs so that the end
products are not affected,” he said.
Healy points to design elements on Raimon Land’s key 185 Rajadamri project that
set it apart as a luxury development, such as optimised unit planning to
maximise prime views to Lumpini Park and the Royal Bangkok Sports Club and a
wide variety of apartment typologies to give buyers flexibility in choosing a
unit’s size, layout and orientation at the expense of building efficiency.
Healy said: “We are continuing with the design incorporating 3.8-metre floor to
floor heights with full-height double-glazed windows to allow for clearer glass
with increased thermal performance. The point is that Raimon Land will not
compromise its quality, but rather introduce new standards.”
Raimon Land remains bullish on Thailand as exhibited in the upcoming launch of
The Lofts Southshore in Pattaya on July 17, but warns that a shortage of
contractors will make it difficult for all the products being marketed to
actually be built.
“We have already secured internationally-recognised contractors for our
projects, which is a huge comfort to our buyers,” Nigel Cornick said, adding:
“We are confident in our position and we feel comfortable moving ahead.” -
Raimon Land
Hafele launches
two new products
Hafele (Thailand) Limited, designers and manufacturers of
innovative household appliances and interiors, have launched two new products
for their 2008 catalogue.
 The
new combined coffee percolator and grinder from Hafele (Thailand) Limited.
The new oven hob features a unique safety design that keeps the surface cool to
the touch when cooking. An efficient heat distribution system also helps your
favorite dishes cook faster than you can imagine and the heat produced by the
electro-magnetic field makes any spillover less likely to burn the cooker top,
making it incredibly easy to wipe clean. With extremely short heat-up times, the
new induction hob provides a superb, energy efficient cooking method.
The new coffee percolator meanwhile combines a great coffee making machine with
a built-in grinder, which both work perfectly together. It is equipped with a
coarseness control function, a boiling pot and an automatic system that allows
you to program the amount of coffee you desire. It also offers a user-friendly
and elegant control panel for greater convenience.
For further details on either of these two products or anything else from the
full Hafele range, go to www.hafele.com
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