The first half of 2011 marked another eventful period for the condominium market as the city develops into a truly international city, according to the latest report from Colliers International Thailand.
Overall the number of launches in H1 2011 exceeded the number for the whole of 2010 with nearly 5,200 units coming onto the market. The key reason for this was the launch of two large scale projects, both offering over 1,400 units. One is The Grand Jomtien by AD House Ltd. on Jomtien beach and the other is Condotown North Pattaya-Sukhumvit from LPN Development Plc, one of the largest developers in Thailand, located over a kilometre from Wongamat beach.
Building cranes dot the skyline as construction of new condominium projects continues apace on Pratumnak Hill, south Pattaya.
Tony Picon, Associate Director of Research at Colliers believes this could be a game changer for the residential market in Pattaya. “LPN has been a major player in the Bangkok condominium market for some time with its small unit sizes targeting first time buyers and now they are entering Pattaya for the first time”, he said.
With units of 22.5 metres, the main focus is on Thais living in Bangkok looking for an affordable second home. LPN is set to launch two more projects in the city and Mr Picon feels that this represents a huge vote of confidence in the future.
“It is likely that other listed developers will follow Raimon Land, Major Development and now LPN Development who are already part of the Pattaya developer mix”, he added.
Patima Jeerapaet, Managing Director of Colliers, also pointed to other real estate developments that are helping to cement Pattaya’s increasing significance. “Central Festival remains a very strong drawcard even for Bangkokians and more refurbishment of older retail centres should be something for the future”, he said.
Another important project is the King Power Duty Free Complex, set to open in September that will add to the attractiveness of the city as a tourism destination.
According to Patima, strong tourism source markets such as China, Russia, India and Vietnam will be the target.”This centre can only help grow these markets further leading to more tourists, more jobs and therefore more residential property interest in the future”, he claimed.
Mark Bowling, Senior Sales Manager for the Pattaya Office, is keen to stress the growing trend of a hotel component in condominium developments in the city. In fact in the first half of 2011 three agreements were reached between developers and hotel brands. The first was Amari, a well known hotel chain, who will manage the previously named The Legend on Cosy Beach by The Nova Group with the lower floors being operated as a purely Serviced Apartment and the upper floors as residences. Following from this Centara, Thailand’s largest hotel chain, will manage the Centara Avenue Residence and Suites in downtown Pattaya on behalf of the Tulip Group.
“Sales have been brisk for both projects and one key reason is the hotel aspect”, said Mark.
Probably the most significant tie up is also a project by the Tulip Group in partnership with the Park Plaza group, a global hotel chain; who will develop the Park Plaza Waterfront located near Bali Hai pier, offering views overlooking the bay.
Mark Bowling points to several reasons why hotels and condominium development arrangements can be successful. “Buyers like the best of both worlds, which means residential facilities are separate from that of the hotel/serviced apartment component but they can also take advantage of what the hotel offers such as room service and housekeeping for added convenience.”
Mark believes that maintaining the property’s value is also a key advantage: “Hotel management will ensure proper upkeep of the property and therefore capital values will remain buoyant but with the added benefit of better rental yields, a very seductive proposition for any savvy buyer”, he maintained.
The report by Colliers states that nearly 5,200 units were launched in Pattaya in H1 2011, compared to around 3,420 for the whole of 2010. More than 2,900 units are scheduled to be completed and transferred during the second half of 2011 which represents an increase of just over 6% in total supply and more than 4,100 units are scheduled to be completed and transferred in 2012.
During the years 2011 – 2013 Pratumnak is set to be the main player in the Pattaya city condominium market, due to many projects being launched in the past three years. (Source – Colliers International Thailand Research)