The last year has brought many challenges for companies doing business in Thailand and in Pattaya the real estate market is in the potentially unenviable position of having a supply that outweighs demand.
This is perhaps why investors are treading more cautiously than ever before; however, by exercising a little due diligence potential buyers can still see the call signs of projects that are worth investing in. One company that is certainly keeping to its schedule and sailing full steam ahead is Kingdom Property with its flagship venture, Southpoint.
The Bay retail project will offer a new beachfront shopping and entertainment option for Pattaya tourists and residents.
A topping-off ceremony took place at the Southpoint condominium on October 10 as construction work on the 30-storey Residence tower was completed and celebrated with a ceremony under a scorching sun, while down below on the 15th floor mechanical & electrical work was continuing apace to keep the project on track for completion in the summer of 2015.
Nigel Cornick, Chief Executive Officer of Kingdom Property, was present at the topping off ceremony and was joined by key members of his staff and representatives from Krung Thai Bank.
Nigel Cornick(2nd right), CEO of Kingdom Property, poses for a photo with the Southpoint project team during the topping-out ceremony for the 30-storey development on Oct.10.
Mr. Cornick was asked about the challenges that have emerged in the last 12 months and the effect these have had on his company’s business outlook.
“I believe things are a lot better than this time last year when we were entering the phase of political uncertainly, so we have come a long way since then and I think that given time, the government will continue to push things forward,” said the Kingdom CEO. “It will be interesting to see how things work out for the high season as far as tourism is concerned; some are saying it will be Pattaya’s busiest high season yet,” he added.
The market has taken a substantial shift in the last year, so too has the demographic and Nigel also raised another important factor.
“Getting buyers back is always difficult. I think that the buyers are there, but so too is the stock so the incoming investment has been diluted across a significant amount of real-estate in Pattaya and that’s something we have to be conscious of. If you look at Bangkok, projects are selling out on launch and there’s a fair number of Singaporeans, Hong Kong and Chinese buying into those projects, but here is not quite the same. The worry for me is the volume of buyers not being able to soak up the supply here in Pattaya, which is why we try to do something a bit different and with a different location.”
Mr. Cornick was delighted that the topping off ceremony at Southpoint was able to be carried out ahead of schedule and said that this could go someway to instilling confidence back into the minds of potential buyers.
“As you can see, we have Krung Thai Bank here today (our funders) which is somewhat rare in Pattaya as most of the projects here are being built off equity from buyers and private loans, so the bank finance, for me, is something that buyers should be looking for, because if you don’t have the facility to keep the construction going, then if it stops it isn’t necessarily going to start again,” said the Kingdom chief who was also questioned upon his thoughts about the prospects of the coming high tourist season.
“Our key market now is probably more Thai buyers as opposed to foreign buyers because we will be finished by the middle of next year, which means customers will be able to get their bank financing, and for Thai’s they don’t necessarily have to put a lot of equity into it, and I think for a weekend retreat, holidays and investment, our product is very well located. But let’s see what happens with the Russian & Chinese markets in the next six months,” replied Mr. Cornick.
Kingdom Property also used the topping off ceremony to announce that the company is soon to commence work on a new beachfront retail project called The Bay. The project is the first phase of a 23-rai hospitality and residential site stretching from Pattaya Beach Road through to Second Road with a total value projected at 5 billion baht.
Kingdom Property has been appointed to oversee the development of The Bay on behalf of the owners, Beachfront Capital, with financing once again provided by Krung Thai Bank, one of Thailand’s largest financial institutions. Colliers Thailand has been engaged to handle leasing for the retail, food & beverage outlets.
RDG, the same planning and design team responsible for Terminal 21 in Bangkok will create The Bay and having this pedigree team onboard is something that Mr. Cornick hopes will go some way to further improving the face of Pattaya.
“It is very exciting to work with RDG, a pioneer in retail design in Thailand,” said Nigel. “We’ve had significant experience developing property on the Eastern Seaboard over the past decade with Northshore, Northpoint and currently the Southpoint project and we are pleased to contribute to the ongoing rejuvenation of the city.
“We believe in the long-term strength of Pattaya and its development as a major tourist and family destination. The Bay will ideally suit these conditions and will be outstanding as a premium dining and leisure destination when it opens its doors to the public.”
The Bay, located adjacent to soi 5, will offer 6,800sqm of retail leasing space over three stories along 100m of Beach Road frontage. Being set well back from the main road, the project allows for an extensive ground floor plaza area of 1,800sqm that integrates the retail space with its beachfront location, providing an ideal venue for events, festivals and concerts. The curved design of the main structure will also offer pure, uninterrupted views of Pattaya bay for diners who will be able to choose from a range of internationally recognised eateries and individual gourmet outlets in alfresco or indoors environments. Completion of the project is expected to be fourth quarter 2015 or early 2016.
So, as we approach the coming high season it seems business people across the city are focusing on the uplift and trying to forget this year’s ‘No Season’ scenario. For Kingdom Property however it’s more a case of business as usual as the company remains on schedule with Southpoint and now, with The Bay, has set its sights on new horizons in this dynamic and ever changing city.
Southpoint is expected to be completed by the summer of 2015.