thailand property blog

Foreign Investors: US Real Estate to Recover in Q2, 2010

2009-06-18T16:33:00.000-07:00

Foreign real estate investors say they expect to see a recovery in the U.S. real estate market by the end of the second quarter of 2010, according to the results of a new survey released today by the Association of Foreign Investors in Real Estate (AFIRE). Completed in the past month among the association's nearly 200 members, the survey was conducted by The James A. Graaskamp Center for Real Estate, University of Wisconsin - Madison. This is the first mid-year survey to be conducted by AFIRE.

Respondents projected their investments for the remainder of 2009 will substantially out-strip investments completed year-to-date. On the debt side, survey respondents say they expect to invest three times more than current investment levels year-to-date; equity investors expect they will place seven times more than current year-to-date investments. Overall, three quarters of the survey respondents had not yet invested in 2009; however, more than two-thirds of them plan to invest some debt or equity in U.S. real estate before the end of the year.

Survey respondents continue to be optimistic in their investment projections. Thirty-one percent said they were more optimistic than at the beginning of the year; 16 percent said they were more pessimistic; and 53 percent said they felt about the same as at the beginning of the year.

In the 17th Annual Survey, released in January, respondents named Washington, D.C., New York, and San Francisco respectively as the top three cities for their investment dollars. "In this survey, respondents echoed those choices saying they expected the same three cities to lead the recovery," said James A. Fetgatter, chief executive of AFIRE. "However," he added, "The perception that Washington, D.C. will be the first to recover has risen dramatically since the Annual Survey. Twice as many respondents named Washington as their city of choice over second-place New York." Boston, which has not appeared among investors' top five cities since 2001, was selected as the fourth city and Los Angeles, fifth.

Survey respondents also said that the office sector would recover first, followed by the multi-family and industrial sectors. This is a shift in investor perception from the results of 17th Annual Survey in which investors expressed an interest for multi-family over office buildings as the preferred property type for their real estate investment dollars.

Source: MarketWatch.com 17 June 2009

FOREIGN BUYERS HAVE DISAPPEARED IN THAILAND

2009-06-14T00:52:00.000-07:00

The uncertain political situation has continued to take a toll on Thailand's property market.

The dangerously unpredictable turns Thai politics has taken in recent months have scared off foreigners, who no longer seem interested in buying property in this country, says Fragrant Group president James Duan.

The Taiwanese developer of three condominiums _ Fragrant 71 in Sukhumvit Soi 71, Prime 11 in Sukhumvit Soi 11 and Circle on New Phetchaburi Road, Soi 36 _ said his company has not seen a single new foreign customer since the seizure of the capital's airports last December.

Foreigners who had previously bought units at Prime 11, which is due for completion in two months, and Circle, where construction is proceeding, have not dumped their contracts and walked away. However, Mr Duan said foreigners are worried about what might happen here.

Their worries do not centre on any difficulty they might face getting out of the country should the airports be seized again, but rather on the soundness of their investments. ''Although Thais too are worried, they are used to all this up to a point, but foreigners are extremely sensitive.''

However, Mr Duan feels sure the situation would improve if the dilemma is resolved satisfactorily because the country has faced other serious political problems over the past 30 years and has always eventually settled down.

Both Prime 11 and Circle have drawn European, US, Middle Eastern and Taiwanese buyers. Circle has attracted more Middle Eastern people, said Mr Duan, because it is just around the corner from Soi Nana, which has a heavy Middle Eastern influence. Neither project has drawn many people from mainland China, although there is expected to be a heavy Chinese influx in the next five years.

Mr Duan pointed out that one of Circle's selling points is that it is close to the soon-to-be-completed Makkasan rail link to Suvarnabhumi Airport. He said foreigners, and Fragrant Group as well, see Makkasan as the portal to Bangkok, but perplexingly Thais do not seem to think the rail link is of great significance.

Despite the unease over the shaky political situation and the difficulty in attracting foreign buyers, Fragrant Group is determined to continue developing property in Thailand, said Mr Duan. He is already scouting around for new land plots and hopefully the company will buy a a plot in one of the city's central business districts soon.

Fragrant's focus will remain on high-end condominiums. The company has no plans to shift gears to the middle or lower end of the market, mainly because it is banking on a resurgence of foreign clients, who mostly want to live in the heart of the city.

Mr Duan said the buyers the company targets may suffer from a lack of confidence in the Thai political scene at the moment, but they don't have financial problems, especially in taking transfers and getting bank loans.

To date, the Fragrant Group has invested 4.6 billion baht, with the value of its completed properties being 6 billion baht.

The Taiwanese developer is not too concerned about possible oversupply of condominiums in Bangkok because it feels that 3 million people out of the city's 10 million population can afford to buy a unit, while only around 100,000 units have been built so far.

However, there are other issues that will help propel the property market ahead. Among them is an anticipated rise in gross domestic product (GDP).

At the same time, bank lending is an issue, said Mr Duan.

''It's not that people don't want to buy _ they can't get bank loans.'' The reason Thailand is facing real estate problems now, he said, is that the banks don't release money easily because they are afraid of nonperforming loans.

''The finance industry here is not like America and other countries where people can just walk in and get cash.

''Being strict is good at one level, it leads to stability, but at the same time it slows growth.''

Mr Duan plans to use Thailand as a base for investment in other countries, especially India and China, whose drawing cards are their huge populations and economic growth.

He said there is a big difference in property prices between Thailand and some countries. For example, luxury condominiums in Taiwan cost around 300,000 to 400,000 baht a square metre, even in a bare-shell state.

''Condominiums in Hong Kong are five times more expensive than here, and in both Singapore and Taiwan they are three times steeper on average, but despite this the return on investment is better in Thailand.''

But there is no escaping the fact that these are extremely difficult times.

As Mr Duan sees it, the two segments of the Thai property market hardest hit by the lingering global crisis are at the extreme ends, one right on top and the other at the lowest rung.

The luxury end is battered by low demand because Thailand does not produce as many millionaires each year as does a country such as Taiwan.

Also, the millionaires in Thailand tend to prefer living in a house rather than in a condominium.

The low end is shaken by people being unable to borrow money to buy property because they have either lost their jobs or are in an insecure position.

However Mr Duan thinks the global economy seems to be improving because there is less bad news today than before, when the steady stream of negativity sapped global confidence.

He also expects Asia to see stronger economic growth than the West because he believes there is much more room for expansion here.

If the West is unable to obtain and market new technology, said Mr Duan, then Asia will be at the hub of future growth because Asia can expand rapidly for at least another 20 years without any problem.

Source: Bangkok Post 14 June 2009

Swedish developer joins posh condo units in Phuket

2009-06-14T00:29:00.000-07:00

A Swedish developer has joined a list of luxurious condominium units along the premier vacation gateway Phuket in Thailand.

The Mandala Condominiums on Phuket´s west coast will soon be ready for occupancy among vacationers in Phuket.

Approximately 400 metres from popular Bang Tao Beach and next door to the five-star Laguna Phuket resort complex, golf course and facilities, Mandala Condominiums is the latest addition to this upmarket neighbourhood.

The developer of the property decided to invest in Phuket to offer reasonably priced, spacious condominiums in the Bang Tao area.

With a total area of 564.16 sqm, the Penthouses have a vast terrace area (265.84 sqm) offering a true ´outside-inside´ living environment, while all units have private swimming pools.

Only six months ago, many Phuket condominiums were being touted at prices well over 100,000THB/sqm. A number of these have sold well (and continue to sell well), while others are baring the brunt of the current economic crisis.

At Mandala Condominiums, the lowest priced unit is offered at 57,000THB/sqm (353 sqm.) while the Penthouses are only 58,000THB/sqm.

Source: www.news-realestatethailand.com 13 June 2009

CB Richard Ellis Surges on Plan to Help Repay Debt

2009-06-13T05:14:00.000-07:00

CB Richard Ellis Group Inc., the commercial property broker with $2.4 billion in debt, surged 14 percent after announcing plans to raise up to $550 million selling shares and debt to the public and to investors including the U.S. hedge fund run by billionaire John Paulson.

The Los Angeles-based company will sell 13.4 million shares to Paulson & Co. for gross proceeds of $100 million, it said in a regulatory filing. It may raise another $50 million in a series of stock sales managed by JPMorgan Chase & Co. and also plans to sell by private placement $400 million in notes repayable in 2017, it said.

The broker has $310 million in debt due next year and $2.28 billion due in 2011, according to Bloomberg data, most of it tied to the 2006 purchase of Trammell Crow Co. Moody’s Investors Service assigned a Ba3 rating to CB Richard Ellis’s new senior subordinated debt and said the outlook is negative.

“CBRE’s real estate services business is highly correlated with real estate and economic cycles, especially its transactional businesses,” Moody’s analysts led by senior credit officer Karen Nickerson said in a statement. “Positively, Moody’s believes the company has adequate liquidity to fund its 2009 debt and operating obligations.”

CB Richard Ellis rose $1.11 to $9.25 in New York Stock Exchange composite trading.

Commercial real estate companies are losing revenue as lenders cut financing for building sales and employers slash jobs, reducing their need for office space. Both mean lower commissions for brokers.

Earlier Share Sale

Rival Jones Lang LaSalle Inc., based in Chicago and the world’s second-biggest publicly traded commercial property firm, said yesterday it plans to offer 5.5 million shares to repay debt and for general purposes.

CB Richard Ellis said in a separate filing that second- quarter earnings, excluding one-time items, may fall more than 50 percent from a year earlier.

Earnings per share will probably be less than 7 cents a share, compared with 16 cents a year earlier, the company said. That compares with the median estimate of 8.5 cents of six analysts surveyed by Bloomberg News.

In November, CB Richard Ellis abandoned plans to raise as much as $400 million in a private offering of convertible preferred stock and instead sold 50 million Class A common shares to the public.

The company paid $1.9 billion for Trammell Crow in 2006 in a bid to expand its building management business.

Quarterly Loss

The broker’s debt level “increases the possibility that we may be unable to generate cash sufficient to pay when due,” it said in its November prospectus. “We cannot be certain that our earnings will be sufficient to allow us to pay principal and interest on our debt and meet our other obligations.”

The broker reported a net loss of $36.7 million, or 14 cents a share, for the fiscal first quarter, compared with net income of $20.5 million, or 10 cents, a year earlier. It blamed “broad weakness in sales and leasing markets worldwide.”

Global property acquisitions fell 73 percent in the first quarter from a year earlier to $47 billion, or 1,014 properties, according to New York-based to Real Capital Analytics.

CB Richard Ellis earned about $77.8 million in revenue from property sales in the first quarter, down 66 percent from a year earlier, according to a presentation on its Web site. Leasing revenue dropped 32 percent to $267.1 million.

Source: Bloomberg 10 June 2009

Thai housing market still not out of woods: TRIS

2009-06-13T05:10:00.000-07:00

BANGKOK, June 13 (TNA) – Thailand’s housing market is not yet out of the woods, nor will it be for the rest of this year, although the government has gradually introduced various measures to stimulate the economy, according to a leading Thai credit rating agency.

Bangkok-based TRIS Rating Co attributed the continued sluggishness of the housing demand to the overall decline in Thai consumer confidence and the lack of spending capacity on the part of prospective home buyers, the economic recession, the increasing numbers of the jobless, the stock market plunge, and continuing political conflict.

These factors had collectively undermined consumer confidence in Bangkok and elsewhere in Thailand.

The National Economic and Social Development Board (NESDB) forecasts that the Thai economy will shrink 2.5-3.5 per cent this year.

The firm said that the credit rating of housing developers in 2009 has been revised based on the competence of executives to adapt to the changing business environment, financial discipline, liquidity management capability, good connection with financial institutions, and strong support from parent companies.

TRIS said local housing developers will still face continued weakness in the market, particularly the single house and townhouse sections, for the remainder of this year, and at the same time, new condominium start-ups have begun to decline.

Consequently, it is expected that the number of new housing starts this year would drop from that of the previous year. (TNA)

Source: MCOT 13 June 2009

Mass transit the key for Bangkok investors

2009-06-13T05:04:00.000-07:00

Buying a residential property as an investment is a practice requiring careful consideration of the type of residence, its price and its location, according to property experts.

Investors are currently being offered guaranteed returns of 6 per cent per year on some properties, but returns can be as high as 10 per cent if the location precisely matches demand from tenants or new buyers.

The CEO of property brokerage Bangkok City Smart, Pumipat Sinacharoen, said if home-buyers expected a return on their investment from rental or resale, they should put their money into a residence close to Bangkok's mass-transit system.

According to the company's database, the preconstruction value of condominium units around the mass-transit system can be expected to increase at least 10 per cent and sometimes more than 20 per cent when construction is complete and units are transferred to owners.

Investors who booked condominium units close to both the Skytrain and the subway in 2007, and whose projects have been completed this year, have seen the value of their properties rise more than 20 per cent, depending on the location.

If the projects are only 100 metres from a mass-transit station, investors will find if they wish to resell their properties, the value will be more than 20 per cent above the amount they paid at a preconstruction stage, he said.

If investors are seeking long-term returns on investment by opening their condominium units for rent, the location principle is the same: units within 100 or 200 metres of a mass-transit station will generate returns on investment between 6 and 10 per cent per year.

A one-bedroom condominium unit in such a location would attract a monthly rent of between Bt10,000 and Bt15,000, Pumipat said.

However, if investors are interested in buying a detached house and letting it for rent, the best locations are near expressways or main roads providing easy access from outer suburbs to the city centre. These locations include Ram-Indra, Kaset-Nawamin and Rama V-Ratchapreuk.

Property Perfect CEO Chainid Ngow-sirimanee, whose company has residential projects in both the Rama V-Ratchaphruek and Ram-Indra areas, said a number of foreign tenants were interested in renting detached houses in these locations, offering rents between Bt30,000 and Bt50,000 per month, depending on the location.

"If people are interested in investing in a detached house, they should be very careful about selecting the location and the project environment. It needs to have more space and the design has to offer closeness with nature that will please foreign tenants. They prefer to live in detached houses rather than condominiums," he said.

However, investors may turn to one of several development projects in Bangkok that are now guaranteeing returns on investment of at least 6 per cent per year.

One such project is Eight Thonglor, by Pacific Star International (Thailand). Construction will be complete this month and the purchase price is Bt150,000 per square metre, up from a preconstruction value of Bt105,000 per square metre in 2007. The developer is not only offering a guaranteed annual return on investment of 6 per cent, but is also offering to manage the properties for rent.

Developers making such offers are at pains to point out the difference between the returns they guarantee and the current interest rate for bank deposits, which is lower than 1 per cent.

Villa Sikhara by Sikhara Kotobuki Property, a joint venture between Japanese-owned Siam Kotobuki and Thai investors, is offering to guarantee an annual investment yield of 6 per cent over five years for buyers of its condominium units in Soi Thonglor 25. The project will be completed within the first half of next year.

Source: The Nation 10 June 2009

For Sale in ... Thailand

2009-06-10T09:33:00.000-07:00

THREE-BEDROOM THREE-BATH HOUSE IN PATTAYA, THAILAND

With views of a floating market from a private balcony; echoes of local design in the exterior; and stylish, warm interiors; this house, built to the current owner’s specifications in 2007, captures the unique appeal of life in this gulf-side resort.

The floors, cabinets and woodwork are made of Burmese golden teak, and the house has a traditional Thai peaked roof. Downstairs, the open-plan living area consists of a living room and dining room, and a kitchen with a black ceramic sink and marble countertops. There is also a guest bathroom on the ground floor. Upstairs, the master bedroom has an en-suite bath, and sliding glass doors lead to a balcony with a view of the Jomtien floating market, where locals sell vegetables and flowers from shallow-hulled wooden boats. Some of the windows upstairs also offer views of the ocean. There are two additional bedrooms and a bath upstairs, and a common room opening onto a covered patio area overlooking a private pool. The house has central air, and all the windows are framed with golden teak. The house is being sold fully furnished.

The property is landscaped with jasmine, palm trees, and fruit-bearing trees like mango, papaya and pomegranate. The pool area has an outdoor shower and a shaded area with lounge chairs.

The house is just off Sukhumvit Road, the main highway from Pattaya to Bangkok, about a two-hour drive away. The airport is about an hour away, and the beach is five minutes from the house.

MARKET OVERVIEW

The real estate market in Thailand’s beach resorts is fed mostly by foreign buyers, who make up more than 90 percent of the market share, according to Frank Khan, the director of Knight Frank Thailand’s residential department. Because of this dependence on incoming foreign money, which has become scarce because of the global economic crisis, the second-home market in Phuket and Pattaya has ground to a halt. Mr. Khan said the exception was the adjacent resort town of Hua Hin, which has remained a popular second-home destination for wealthy Thais, including the king of Thailand himself.

Mr. Khan says homes priced below 10 million baht (about $290,000) are selling, but the market above that threshold is stagnant, even in Hua Hin and Bangkok, where some investors are still buying at the lower end. The large expatriate community in Bangkok mostly revolves around the international businesses there, said David Gray, the director of East Coast Real Estate, based in Pattaya, and there is not much of a high-end second-home market in the city itself.

Currency fluctuations are also affecting the Thai second-home market, according to Mr. Gray. He said the baht’s relative strength against foreign currencies, including the ruble, the British pound and the Australian dollar, was motivating cash-strapped foreign second-home-owners to sell their Thai holdings. “A lot of people are cashing in on the exchange rate right now,” he said. “People can take much less for their homes and still not lose anything.”

Second homes in Phuket cost about twice as much as comparable homes in Pattaya, Mr. Gray said, because Phuket is an island and developable land is more limited. He is seeing more second-home-owners moving away from the beach resorts and into the countryside, many building retirement homes. North of Bangkok, for example, it is possible to find an acre for a couple of thousand dollars. “For Thailand, that’s cheap,” he said.

WHO BUYS IN PATTAYA

Thailand attracts buyers from all over the world, according to Mr. Gray. He has sold properties to Europeans, Americans and Australians, as well as people from other Asian countries. Until a few years ago, British and German buyers were the most prevalent, but interest from German as well as Russian buyers has decreased, he said. “Americans seem to be buying at the moment,” he added, “or whoever holds American dollars,” because the dollar is relatively strong.

Foreigners cannot own stand-alone houses in Thailand, but there are a number of common ways to work around that stricture. Mr. Gray says foreigners can set up a Thai company through which to buy property (though new regulations may soon make this method more difficult). It costs 30,000 to 50,000 baht (about $880 to $1,460) to set up a company for this purpose, Mr. Gray said, and running costs after that come to about 20,000 baht (about $590) per year for accounting fees and taxes.

Many foreigners buy property in the name of a Thai person they trust, according to Mr. Gray. They can then lease the property back from the official owner for up to 30 years. The lease can be renewed at the end of its term, Mr. Gray said.

Foreigners are permitted to own a condominium or apartment outright, as long as more than half the development is owned by a Thai entity. “Any building can be up to 49 percent foreign owned,” Mr. Gray said. “There has to be majority Thai ownership in the building.”

When property changes hands, the buyer pays transfer taxes, fees and stamp duties to the local land officials. Mr. Gray says these costs are normally 5 to 6 percent of the declared value of the property. (Declared value is determined by the government, and is usually 50 to 60 percent of market value.) But Mr. Gray also said that the government, in an attempt to stimulate the market, had reduced all taxes and fees to less than 1 percent of declared value until April 2010. The seller pays the real estate agent’s commission, which ranges from 3 to 5 percent of the sale price.

Source: New York Times 26 May 2009

Environmental care and energy saving in Thailand

2009-06-03T07:43:00.000-07:00

Architects want simpler assessment approvals for 'friendlier' buildings

Environmental friendliness, energy saving and "green" principles are rapidly becoming major trends in Thailand's property market, involving both property developers and producers of construction materials.

The companies are dancing to a tune played by consumers, who are these days keenly attuned to environmental issues and prefer buildings designed to minimise energy use.

In a significant move, the Association of Siamese Architects under Royal Patronage (ASA) has proposed to the Office of Natural Resources and Environmental Policy and Planning (Onep) that building projects developed in accordance with environmental and energy-saving principles should face a simpler form of environmental-impact assessment (EIA).

The proposal comes at a time when Onep itself has been considering the EIA procedure and how it can speed up approvals.

A survey by The Nation last week found both property developers and producers of construction materials were eager to meet the green demands of modern home-buyers who want to buy environmentally friendly homes that save energy bills. Home-buyers believe this will save them money in the long term.

The Siam Cement Group (SCG) is one producer of construction materials that has spent more than Bt1 billion on researching and developing green materials for all of kinds of construction, in the belief that doing so not only meets customer demand, but is also environmentally responsible.

One subsidiary, Siam White Cement, has developed white plaster and marble-surface textures for walls and floors that do not need painting. Another, Siam CPAC Block, has developed cool-plus blocks that are claimed to reduce internal heat in a building by seven to 10 per cent, as well as specialised blocks for roof gardens.

SCG Cement marketing director Syamrath Suthanukul said the group had a target of launching an average of ten innovative products per year, most of them green products developed to meet customer demand.

Siam City Cement has also announced a "Green Innovation" policy, under which it will develop new products and production processes to serve the growing demand for environmental friendliness.

Property developers are not only incorporating green principles into their buildings, but they're also providing greater contact with nature on the ground.

Supalai CEO Prateep Tangmatitham said architects had to begin their job by considering prevailing wind directions and the path of the sun from sunrise to sunset. Then, they not only had to select raw materials appropriate to the building's design, but also according to their ability to save energy.

Residential projects also have to incorporate larger green areas, in the form of parks and gardens, to suit modern lifestyles in which customers want to feel closer to nature, he said.

A new concept in energy self-sufficient housing is expected to arrive on the Thai market in the fourth quarter of this year.

LPN Development is planning a residential development whose main concept is care for the environment and energy saving. Managing director Opas Sripayak said his company believed the concept would generate greater long-term benefits for its customers.

"When home-owners live in a green building they will save on their electricity bills and living in a green area will give them a better quality of life," he said.

He said there would be clear environmental benefits if Onep accepted the ASA's proposal, because property developers would be encouraged to design and build green buildings.

Meanwhile, property agency Jones Lang LaSalle has taken the lead in a US project that may pave the way for similar energy sustainability projects around the world.

The agency is programme manager of a "highly collaborative team" that plans to take New York's iconic Empire State Building and reduce its energy use and greenhouse gas emissions by up to 38 per cent.

Once completed, the building is expected to achieve an Energy Star score of 90, placing it in the top 10 per cent of efficiency for class-A buildings - a major feat for a pre-war property. As well, it will seek certification as a Leadership in Energy and Environmental Design Green Building.

The New York project will make the first comprehensive approach to modelling steps for the reduction of energy consumption, in the hope that the process will be followed in buildings around the world.

The programme is aimed at providing an economically sound path for owners of existing buildings to pursue responsible energy management profitably.

Source: The Nation 3 June 2009

Dusit Thani Laguna Phuket Awarded for Staying Green

2009-06-02T07:55:00.001-07:00

EIA awards Dusit Thani Laguna Phuket for the 6th time with the EIA Monitoring Award

Dusit Thani Laguna Phuket has received the Environmental Impact Assessment (EIA) Monitoring Award for 2008 in recognition of its consistent effort in management of the environment in and around the property.

EIA Monitoring Awards aim to encourage enterprises to be aware of their responsibility towards environmental impact, to support the enterprises in developing their EIA management and be a role model to others. The award, which has been won by the resort since 2000, was presented last month by Mr. Suwit Kunkitti, Minister of Natural Resources and Environment, during a ceremony at the Miracle Grand Convention Hotel, Bangkok.

“Environmental management has long been a key policy for the resort and that all departments of the hotel ensure this is one of their main concerns since our hotel was opened in 1987. All our staff are required to be friendly with the environment, and we aim to ensure that this is taken forward to our guests through our various campaigns and programmes,” said Mr. Peter Komposch, General Manager of Dusit Thani Laguna Phuket

In 1992 Dusit Thani Laguna Phuket received the prestigious International Hotel Association Environmental Award. Over the years there have been many campaigns implemented by the hotel to raise awareness of environmental concerns for both staff and guests, such as the Love Tree Planting Ceremony conducted after wedding ceremonies, nature bike tours, and the Water Day slogan contest.

Additionally, Dusit Thani Laguna Phuket has required the Green Leaf certification from the Green Leaf Foundation since 1998. The certification is presented to the resort to certify that it has contributed to the betterment of Thailand’s environment through the improvement of the hotel’s performance and efficiency.

The resort has also won other notable environment related awards, including the Tourism for Tomorrow Award from British Airways in 1996, the Environmental Champion award from TUI Deutschland in 2004 and the Excellence Award from TAT Tourism Award in 2008.

Source: www.etravelblackboardasia.com 1 June 2009

Bangkok - Home prices at city's heart

2009-06-02T07:40:00.001-07:00

Prices here deemed 'a challenge to investors' by agency

The average price being paid for a condominium unit in the Central Lumpini area is now Bt112,765 per square metre, ranking higher than other popular locations in central Bangkok, according to real-estate firm CB Richard Ellis Thailand.

This is followed by units in the Sukhumvit area, which are presently averaging Bt100,549 per square metre, and those near Silom and Sathorn roads, which are selling for an average of Bt95,311 per square metre.

These are still substantially below the record of Bt370,000 per square metre set in the second quarter of last year by The Sukhothai Residences on Sathorn Road. The price was reached when the developer had sold 70 per cent of the presales target, so sales were temporarily closed in June 2008.

CB Richard Ellis (Thailand), the project's property agency, said sales would reopen nearer to the project's completion.

Q Langsuan on Rajdamri/Rama IV is currently the city's most expensive residential project, recording prices between Bt180,000 and Bt280,000 per square metre. About 30 per cent of the project, which has a market value of Bt3.4 billion, has now been sold, said Risinee Sarikaputra, research and advisory director at Colliers International Thailand.

Although Q Langsuan has recorded higher prices than other residential projects in Bangkok's central business district, they are still considerably lower than prices for residences in other central business locations in Asia, such as Hong Kong and Singapore, Risinee said.

According to a survey by Colliers International Thailand, the highest price being paid for a luxury residence in Hong Kong is 31,819 Hong Kong dollars (Bt140,000) per square foot (or Bt1.51 million per square metre) for the Gough Hill Residences, located in The Peak area. This price has fallen 8 per cent from last year.

The average price for residences in Hong Kong's central business district is about $16,103 per square foot (or Bt767,000 per square metre). This price has fallen about 30 per cent since the final quarter of 2008, following the onset of economic recession in Hong Kong. It is still more than six times higher than the average prices in the most popular parts of Bangkok's central business district.

The highest-priced luxury residences in Singapore are likely to be found at the Mercury project on Shanghai Road, where the current best offer is US$1,250 (Bt42,600) per square foot (or Bt461,000 per square metre). This price has dropped 13.8 per cent from last year's fourth quarter, when the global economic recession reached Singapore.

It is still four times higher than that for residences in Bangkok's central business district.

Demand for luxury residences in Bangkok has fallen significantly since the second half of last year, when the global economic downturn saw foreign buyers withdrawing their investments from the Thailand market, Risinee said.

However, when Bangkok's luxury residences are compared with those in Singapore and Hong Kong, those on offer in Bangkok represent an attractive challenge to investors looking for long-term arrangements, she said.

Last week, Israel's largest real-estate developer, Industrial Buildings, a subsidiary of the Fishman Group, announced a joint venture with local company Pace Development for the Bt18-billion Maha Nakhon project.

Fishman Group managing director Anat Menipaz-Fishman said her company had decided to enter Thailand's property market, because prices here were four times cheaper than those in Singapore and six times lower than those in Hong Kong.

The Maha Nakhon project will comprise luxury condominiums, hotels and retail space on a land plot of about 9 rai held on long lease on Narathiwat Road, near Chong Nonsi Skytrain Station.

Source: The Nation 2 June 2009

Israel's Fishman Group invests in Thai property project

2009-05-28T07:54:00.000-07:00

Bangkok - Shrugging off political instability and recession, Israel's Fishman Group has chosen Thailand for its first major property investment in Asia, a 18-billion-baht (500-million-dollar) luxury property development in Bangkok, media reports said Thursday.

'We want to enter Asia and chose to do so in Thailand because we believe the country has good potential for long-term investment despite its politcal problems,' Anat Menipaz-Fishman, managing director of the Fishman Group, said.

'And it is cheaper than other Asian countries,' she added, in an interview with The Nation newspaper.

Fishman, through its publicly listed Industrial Building Corp, on Wednesday announced a joint venture with Thailand's Pace Development group to invest 18 billion baht in a luxury 'mixed-use' property project in Bangkok.

The project, on which construction is scheduled to begin in the third quarter 2009 and is expected to be completed in 2013, will include 200 Ritz-Carlton Residences, The Edition Bangkok boutique hotel and a 'luxury lifestyle' retail centre.

The investment comes at a time when the Thai economy has been suffering from more than a year of unprecedented political instability, caused by anti-government street protests, and has entered recession.

Thailand's gross domestic product (GDP) declined 7.1 per cent in the first quarter of 2009, after dipping 4.2 per cent in the last quarter of 2008.

Source: Business news 28 May 2009

Land purchase through Thai spouse forbidden: Land Dept

2009-05-27T07:53:00.000-07:00

PHUKET CITY: The director general of the Land Department has reiterated that foreigners using Thai nominees to buy land anywhere in the country will have their land title deeds revoked if caught – even if the nominee in question is a lawfully wedded spouse.

Land Department Director Anuwat Meteewiboonwut made the comments during a recent stop in Phuket as part of a nationwide inspection tour of 30 provinces.

The tour is aimed at improving public services by land officials in three areas: dress, conduct when dealing with the public and working harder to eliminate a backlog of work.

Many members of the public have complained that it takes up to a year to complete a transaction that should only take one day, he said.

Mr Anuwat, a former governor of both Phang Nga and Samut Prakan provinces, said he was satisfied on the first two points, but rated the general level of success among land officials nationwide at speeding up their work rate at “only 30%”.

The next round of inspection tours will come in July, after which time personnel changes will be considered if service does not improve, he said.

“We have to keep pressure on them, otherwise the work will not get done,” he said.

As for foreigners seeking to buy homes in Phuket, they can do so through the Condominium Act, which allows foreign ownership of up to 49% of any project, he said.

Foreigners cannot use a Thai spouse as a nominee to buy property in Thailand, however.

“If the Thai spouse has enough money to buy the house that is fine, but if the Thai has no money and uses money given to him or her by a foreigner to acquire property, that is against the law. If we check and find out later that a Thai person has been using money from a foreigner to buy land anywhere in Thailand, we will revoke title deeds,” he said.

Mr Anuwat said the provisions of [Ministry of Interior] ministerial order 43 makes it difficult to issue land documents quickly, as it requires action from a number of different agencies. Desire for land on the island has also led to encroachment problems here, he said.

As a key market for property companies, Phuket is a constant source of problems and complaints to the director general’s office, he admitted.

“We will try to resolve these problems and develop our personnel continuously in order to provide high quality services. Fortunately the governor of Phuket used to work in the Land Department, so he understands the procedures and can help co-ordinate all the agencies involved,” he said.

Mr Anuwat was speaking of Phuket Governor Wichai Phraisa-ngop, who served as Land Office director in Nakhon Pathom in 1997 and as deputy director of the Land Department nationwide in 2003.

Source: Phuket Gazette 27 May 2009

Revenue from Phuket real estate deals plummets

2009-05-26T08:28:00.000-07:00

PHUKET CITY: In an indication that the Phuket real estate market is not quite as robust as some like to suggest, statistics released by the Phuket Provincial Land Office reveal that income on land and property sales transactions was down over 70% year-on-year over the first four months of 2009.

There were a total of 1,945 transactions involving land title deeds for the period from January to April.

The total value of land transactions for the period was Bt883.24 billion baht, with the vast majority (Bt881.52bn) for land with pre-existing structures.

Income from transactions from January to April 2008 totaled Bt333.5 million baht.

Income for the same period this year was just Bt97.8m, down almost 71%.

Source: Phuket Gazzette 26 May 2009

The largest reduction was in business tax collection, which is normally paid for by the seller at a cost of 3.3% of appraised value. This figure fell from Bt132.0m to Bt18.2m year-on-year.

There was a similar downward trend in income from transfer fees, normally paid for by the buyer at 2% of registered value. These plummeted from Bt104.3m to Bt13.6m year-on-year.

Withholding tax, paid for by the seller at 1% of appraised value, fell from Bt85.7m to Bt58.6m year-on-year.

Stamp duty, paid for by the seller at 0.5% of registered value, fell from Bt11.6m to Bt7.5m.

Property analyst Bill Barnett of thephuketinsider.com told the Gazette that the figures reflect a "wait and see" attitude on the part of Thai investors, many of whom speculate by buying several units at a time without the intention of living in them.

Describing the figures as somewhat volatile, he cautioned that they are not a reliable yardstick for trends in the upscale villa market, where many sales are to foreigners on a leasehold basis or though offshore accounts, and thus not included in the Land Department figures.

Gloomy outlook for Phuket tourism industry

2009-05-24T07:24:00.000-07:00

The Phuket Tourism Association has forecast that hotels in the province would see occupancy rates as low as 25-30 per cent, compared to 60 per cent in the low season last year, citing a number of negative factors.

Phurit Maswongsa, the association's vice president for marketing, said the spread of the type-A(H1N1)flu virus was one of the main problems hitting the industry.

"Phuket is already in the low [holiday] season, but occupancy rates will fall by about 30 per cent to remain at between 30-35 per cent," Phurit said.

He added revenues for operators in Phuket would be down 50 per cent compared to last year.

Only tourists from Australia, the Middle East and India are likely to be visiting the island.

He said promotional offers were not enough to tempt tourists back to Thailand as they were trying to avoid the possibility of catching the flu and were also concerned about political instability.

Moreover, occupancy rates in the high season are expected to be down 20 per cent, to between 50-60 per cent.

Laguna Resorts and Hotels forecasts the average occupancy rate at its Laguna Phuket property would be down 20-25 per cent in the second and third quarters of this year.

The average occupancy rate at the region's largest resort complex fell 27 per cent in the first quarter, to 65 per cent because people cancelled bookings to Phuket following the closure of Bangkok airport in November.

Thailand's political instability and the global economic crisis are key factors for the downturn and this has been exacerbated by the spread of the flu virus.

Debbie Dionysius, Laguna's assistant vice president for destination marketing, said it had offered 100,000 free rooms earlier this year so occupancy rates were pretty high in January to March. However, revenue was down.

Dionysius expected to see an improvement by the fourth quarter year as tourists should hopefully be returning to Thailand.

"We have seen some positive signs such as the economy picking up," she said.

Dusit Thani Laguna recorded the best performance in terms of revenue in 2007-2008 while Banyan Tree has recorded the highest occupancy rate over the last two years.

The hotel operator is trying to attract more tourists to the island by adding more activities and implementing new marketing strategies.

An upcoming event is the fourth Laguna Phuket International Marathon, which is scheduled for June 14. The event is expected to draw 4,000 runners from overseas and Thais. The event is also hoped to generate revenues of around Bt30 million for the province.

According to Dionysius, Laguna Phuket is working with international schools in Thailand, Hong Kong and Singapore to organise activities and camping trips. The scheme will run from June to September.

Moreover, the group will try to attract more customers from China where it has Banyan Tree offices in Beijing and Shanghai. Laguna expects visitors from China to increase from 5 per cent this year to 15-20 per cent over the next few years.

Source: The Nation 21 May 2009

Peaks and troughs

2009-05-23T21:29:00.000-07:00

Bali has been little affected by the economic downturn

In Hong Kong, where real estate is an obsession, a recession is not taken seriously until property owners start slashing their asking prices. And, in the second half of last year, that happened. Across the territory the numbers on signs in real estate agency windows were crossed out and replaced with lower ones – usually in red ink. More recently such scribbling has given way to formal advertisements, with the bargains highlighted by downward-pointing red arrows.

On the Peak, Hong Kong’s most exclusive residential neighbourhood, this kind of salesmanship is considered unseemly; at the sales offices of realtors Midland and Centaline, both just a short walk from the upper terminus of the world-famous local tram, there is not a red arrow in sight. But, even if it’s not advertised, prices in this triangular enclave – bounded by Victoria Peak to the west, Mount Kellett to the south and Mount Gough to the east – also fell sharply late last year.

Bonnie Braidwood, an agent in Centaline’s “stately homes” division, is marketing a 3,200 sq ft, four-bedroom townhouse in the Strawberry Hill development on Plantation Road priced at HK$95m ($12.3m), or about 20 per cent less than it would have been 18 months ago. Savills meanwhile brokered four Peak transactions valued at HK$106m-HK$180m in the first quarter of this year, with two of the properties selling for 30 per cent below their original asking prices.

“We did well in the first quarter but for the coming quarter I don’t know,” says Savills’ Angel Law, who now has five detached homes on Rosmead Road with asking prices of more than HK$200m on her books. “After [the collapse of] Lehman Brothers [in September 2008] sellers were willing to adjust their prices [but now they are] conservative because they know it’s difficult to buy again. They will only sell at prices they know they won’t regret.”

Christina Brun, a dentist who runs a charity foundation, and her husband, Christian, a headhunter, timed their exit – and re-entry to – the Peak property market almost perfectly. With two children and another on the way, the couple bought a slightly “dark and dingy” flat on Peak Road in early 2007. “We wanted it as a home; particularly as an expat, the only way for me to settle down is to own the bricks I live in,” Brun says. But as prices soared through early 2008, “I became uncomfortable living there; those walls contained too much equity.”

The Peak in Hong Kong
They sold in August 2008 but were eventually tempted back into the market earlier this year thanks to the price falls. Their new townhouse on Mount Kellett Road has beautiful views over the island’s south side and it cost them just 15 per cent more than the amount they got for their first flat.
Such bargain-hunting is becoming increasingly common, says Victoria Allan at Habitat Property, who worked with the Bruns. And, buoyed by a 50 per cent rebound in the Hong Kong stock market since last October, Peak values are starting to recover – up 15-20 per cent over recent months. “The property market is remarkably active at the moment,” Allan says.

“The worst time was October-November last year,” Braidwood confirms. “At the moment it is relatively stable.”

For decades deep-pocketed developers and landlords have dominated the Peak market, with the latest census showing that only 40 per cent of the area’s 5,682 homes are now occupied by owners, compared with 56 per cent in the similarly exclusive Repulse and Deep Water Bay neighbourhoods. This helps explain why, for an area once synonymous with colonial grandeur, the architecture can be disappointingly graceless. Builders paying top dollar for sites ended up cramming as many “row houses” on to it as possible.

Yet, given the area’s exclusivity and the limited supply of housing, demand remained high. The peak of the Peak’s market probably came in July 2007, when Sun Hung Kai Property sold a townhouse at a record price of HK$41,100 per sq ft – following a December 2006 purchase of a lot on Mount Kellett Road for HK$1.8bn, or HK$42,200 per sq ft. But the ensuing economic turmoil has led to development and sales activity being slow ever since.

At 1 Barker Road, right next door to the US consul general’s residence, for example, realtors speculate that redevelopment work has been pushed back in an effort to coincide with the economic recovery. SHKP’s Mount Kellett Road development is meanwhile scheduled for completion, the company says, in “financial year 2011/12 and beyond”.

A four-hour flight away on the Indonesian island of Bali, a popular holiday-home destination for wealthy Hong Kong residents, the property market is surprisingly in much healthier condition. “Some foreigners here are in trouble and might be looking to get rid of their assets so, yes, we’ve got opportunities to pick up well-priced properties but it’s not like the market is crashing and everything is dropping in price,” says Dominique Gallmann, chief executive of Exotiq Real Estate in Bali.

“I’m quite staggered by the resilience of the market,” adds Matthew Georgeson, a former Hong Kong resident who set up a real estate company, Elite Havens, on the island. He recently heard of two “brilliant” properties, one worth more than Rp31.bn and the other just under Rp20.5bn, coming on to the market. “And offers of about 70 per cent of the asking price were rejected straight away”.

There are three reasons for the relative buoyancy in the market. The first is that it has always been virtually impossible for foreigners to obtain financing for a purchase on the island. “Because you’ve got to buy with cash you’re mostly talking about people who have the power to keep it,” explains one Hong Kong banker who recently spent more than $1m on land and the construction of a villa near Canggu, in the south-west.

The second is that Indonesia, with its non-export-oriented economy, has escaped the worst of the financial downturn and so most property owners are not feeling the pinch as much as people from other countries. Very few of the original Balinese landholders are in a hurry to sell and will wait until they get an offer that interests them.

The third reason is that while demand has dropped, it has not dried up. Bali is increasingly luring buyers away from Phuket in Thailand, despite the latter’s better beaches and infrastructure. “We had a very good January and February,” Gallmann says. “March and April were a bit slow but now the pipeline is filling up again.”

Having said all that, the market is not homogenous. While Georgeson says sales of $1m-plus properties are strong, the middle range of properties priced from $300,000 to $1m is suffering. “These [buyers] were spending bonuses [but now they are] more careful about job security,” he says.

Villa resales are also challenging, adds David Leadbetter of consultancy Hot Property. “There’s not much of a market unless the property’s relatively new or in an existing estate,” he says.

Yet land prices continue to show resilience. The cost of seafront property on the relatively undeveloped Bukit peninsula on Bali’s southern tip has doubled in the past three years to about Rp500m ($48,000) per are, the standard 100 sq metre unit of measurement on the island, while parcels in more developed Seminyak, considered the “Chelsea of Bali”, in reference to the upmarket London neighbourhood, are up by more than a third to Rp600m per are. And experts expect the trend to continue. “Prices might not rise at the rapid pre-crisis levels but they’re almost certainly going to keep rising,” Leadbetter says.

Most Bali owners are blissfully unaware of all this, motivated by the desire to maintain an island idyll not an investment. “I intend to keep my place indefinitely,” says Darren Fraser, an Australian who lives in Hong Kong but keeps a four-bedroom villa in Seminyak. “You wouldn’t buy here just for an investment because you’re unlikely to get more than 5 to 7 per cent return a year.”

Tony Carey, who works for Oakley eyewear in Hong Kong, bought a 40-acre cliff-front plot on the Bukit two years ago for Rp15.2bn and is planning his villa. “We used to do the Phuket thing but I prefer Bali in many ways,” he says. “It doesn’t have the sleaze in your face in the same way. I love Indonesian food. I prefer the culture, the surf.”

Source: FT.com 23 May 2009

Tom Mitchell is a reporter in the FT’s Hong Kong bureau. John Aglionby is the FT’s Jakarta correspondent

Phuket property under fire: Developer Lersuang revisited

2009-05-23T21:26:00.000-07:00

Left: An artist's rendering of the stalled Infinity Heights project, high up over Bangtao Beach. Some say it's the altitude itself that may put the project at risk.

PHUKET: Earlier this month, Web blog thephuketinsider.com and the Phuket Gazette reported on an article in the UK’s Daily Mirror about the Phuket-based Lersuang Group. The Mirror story put Lersuang in the international limelight, saying that customers were demanding their money back but offering no comments from company management.

The Phuket Gazette promised to get comments from the companies involved and to compile a report on the holding company as well as the fate of several of its individual development projects.

Here is our report, based on comprehensive interviews with Lersuang CEO Errol Salih as well as property industry insiders, Lersuang customers and a new investor in one of the Group's key properties.

Background on the Holding Company

Lersuang Group Holdings Co Ltd was established with registered capital of 30 million baht (approx US$ 860,000) on July 19, 2005. Documents obtained from the Phuket Companies Registry office list five individuals as directors and shareholders: Selwyn Casey, Errol Salih, Viroj Chinpracha, Jumlong Sittichok and Maedta Vissesombat.

Mr Maedta is the only director not profiled on Lersuang’s website. However, buyers of units in Lersuang’s incomplete Tamarind Hills project are being told that “Dr Maedta” is now handling that project, according to Lersuang CEO Errol Salih.

Completed Projects in Phuket

Phuket residential projects successfully completed by Lersuang include Club Lersuang, comprising 56 apartments; Lersuang Apartments, 12 units; Lersuang Town Houses, with four free-standing villas plus six duplex homes; and Lersuang Apartments Phase 2, comprising six premium apartments. All five of these projects are located in the Bang Tao/Surin Beach area.

Owner Comments

According to a Lersuang property owner who, like most, was willing to speak to the Gazette only on condition of anonymity, early buyers of Lersuang properties are satisfied. “It’s the ones who came in later who are having problems,” he said.

Asked if he was happy with the quality of the construction and workmanship of his home, he said that he had been living there since its completion about three years ago and was satisfied with the construction standards. However, although he lives in the property, he and his neighbors are concerned that their assets might now be at risk.

“Nothing that I’ve paid for can be registered. The land that they [the project’s units] sit on is in question. We’re in limbo at the moment and we’re negotiating to get the matter settled,” he said.

The homeowner wouldn’t reveal which of the Lersuang developments he resides in but said that the issue he and his neighbors face is whether the units should have been built in the first place.

“I don’t think it’s a con,” the homeowner said. “There is a road that was laid around the property by the OrBorTor. It has drainage and electricity poles running along it but there’s an issue with the Land Department, who claim that the road is in the wrong place and should have been put somewhere else. Hopefully, there is no need to go to court over this issue and everything can be sorted out,” he said.

An Insider's View

A respected local property professional, who also insisted on anonymity and who claimed to have insider knowledge of the Lersuang Group’s operations, contacted the Gazette and said that the group began having difficulties with cash flow in November 2008. “They did do some small developments in the Bang Tao area which were completed and very successful. But the later ones were too big, way out of their league,” he added.

He went on to explain that the company stopped paying some of its staff and suppliers late last year. “I know they were having land issues. They didn’t exercise enough due diligence. I believe they were still trying to sell to customers while having the land issues,” the source said.

“On one of the projects, the access was not correct. It went across land belonging to a temple,” he added.

The source told the Gazette that he’d watched Lersuang attract a series of investors one after another from around the world. The company would use up the advance payments from their first buyer and then find a new buyer to cover their debts, he said.

“Eventually, the growth in debt outstripped the company’s ability to generate cash, and they couldn’t attract any more investors,” he added.

Asked if he thought Lersuang intended to run away from its debts, the source said ‘no’, that he knew the directors were still on the island and that they had been making efforts to pay the people they owed.

Stalled Projects – Phuket

About two years ago, Lersuang launched Turtle Cove. About a year later, Tamarind Hills was started in Layan. Both projects remain unfinished.

The group went on to launch Infinity Heights – two- and three-bedroom luxury apartments above Bangtao Beach, with prices starting at 13.4 million baht – again selling off plan. They also launched Lersuang Village, which comprises detached and semi-detached houses in Cherng Talay.

Lersuang Group CEO Errol Salih told the Gazette that Lersuang has a 50% share in the Infinity Heights project with the remaining 50% belonging to a company called A-Plan, which initially raised the capital to start the development.

Pressed for reasons behind the stalling of Infinity Heights, Mr Salih admitted that one of the issues, ironically, is the ‘height’ of the site.

He said that on the strength of advice from an early survey, his company initially believed the entire site was within Phuket’s legal height limit of 80 meters over sea level, but that it now appears that some parts of the land are higher than that. He adds, however, that there is still enough land below the 80-meter level to build ‘financially viable’ homes.

Mr Salih also blames construction delays on local political turmoil and global economic issues, adding, however, that buyers would eventually see their homes completed.

When asked to comment on Turtle Cove, he said that Lersuang originally owned 40% of the shares in that project, but that those shares had now been ‘given away’ to a private investor who is currently revamping the plans.

On Tamarind Hills, he said that Lersuang initially owned 1/3rd of the project, but had also ‘given away’ its shares – in this case, to Sepco Sustainable Energy Products – and that Mr Maedta Vissesombat was now running the operations and dealing with the project's customers.

Stalled Projects – Hua Hin

On its website (www.lersuang.com), Lersuang lists Infinity Heights, Lersuang Village, Turtle Cove and Sariya Kamala Villas as its current Phuket projects. Also listed are developments in Hua Hin, including the Hua Hin Country Club Apartments (123 luxury units with five penthouses) and the Black Mountain Golf Course.

Joe Cole, the Daily Mirror, and the Hua Hin Country Club Apartments

It was the Hua Hin Country Club Apartments that received attention in the Daily Mirror story, which focused on Chelsea Football Team celebrity Joe Cole’s association with that project as the result of his appearance in widespread publicity for it. It’s not clear precisely what the footballer’s deal was with the developer, and Mr Salih was not at liberty to elaborate, saying only that Lersuang’s association with the Hua Hin Country Club Apartments was “as a brand name only”.

“No one has lost any money there [Hua Hin]. There will be a project that is done there,” he insists.

Mr Salih went on to say that a “new partner” has agreed to take over the Hua Hin Country Club project.

“He’s got some other investors. He is going to build something that is maybe not as grand, but something that nobody will lose money [on]. Whatever money we have received is going back to do that development,” Mr Salih said.

“As far as I know, they [Joe Cole and the new Hua Hin partner] are on very amicable terms; nobody's going to lose money. Most sales were done prior to Joe Cole being involved. He has not lost any money and neither have the people there. Nobody has lost any money at all in any of our projects,” he said.

The new Hua Hin partner, who also required anonymity to speak with the Gazette, confirmed that he was one of the original investors in the Hua Hin Country Club project and that he is working on a “rescue package” to ensure that those who had invested in the development will eventually get something.

“The land in question covers 8.5 rai but we won’t need all that for what we have in mind. Nothing has been built so far. At the moment, I’ve got some drawings; I’ve got some ideas; and I’ve spoken to one or two of the buyers,” the partner said.

He confirmed that initial plans were for 123 condo units, but that the new plans are for something a lot smaller, a residential project that he expects to be finalized and underway by July this year.

“What I’m telling people at this end is that Errol and the guys down there [in Phuket] haven’t run away. If they were going to run away they would have run away with a couple hundred million baht a few years ago,” he said.

“The whole thing will be new. It will be a totally new name, new design, new prices – everything,” he enthused.

Asked if Lersuang would continue to be involved in the Hua Hin project, he said that it wouldn't carry the Lersuang name or have anything else to do with that company, but that if Lersuang wanted to help out with sales, they’d be “very welcome” to do so.

Cash Flow, Buyer Defaults, and the Crisis in Phuket

Back in Phuket, Mr Salih admitted that Lersuang has had “some cash flow problems”, and that some Lersuang customers were “understandably upset”.

“We could not manage Phuket and Hua Hin under the circumstances and the present political climate.

“Tamarind Hills was probably one of the most difficult ones for us and we really didn’t know how to cope with it. It’s complex,” he said.

Hong Kong-based companies and financial advisors were responsible for raising the initial capital to start Tamarind Hills, Mr Salih says. “They were looking after all the money in Hong Kong via lawyers’ accounts. They have had some internal problems,” he said.

“We were originally the minority shareholder... But we ended up having to take over the shares of various parties at Tamarind Hills to protect the original land owners. We had...no choice but to take that project, even though it was too big for us. We would never have done it on our own [in other circumstances],” he said.

Mr Salih gave several reasons for Lersuang’s cash flow problems, namely buyer defaults on progress payments; political instability; insufficient support from the banks; and taking on too many projects at the same time.

“After the army took out the government, our turnover went from 80-100 million baht per month to zero for seven months,” he said.

“If the political unrest hadn’t happened, none of these projects would have been that much affected. Our brand name would have been very valuable. And that’s what we were trying to achieve. For the future, our plan was to sell the [Lersuang] name, like a franchise,” Mr Salih explained.

“We had very little bank support. Any foreign company in Thailand finds it very difficult to obtain credit from the banks [here],” he said.

Asked why Lersuang took on too many projects at once, Mr Salih explained that following his company’s initial success, land owners began approaching Lersuang to help develop projects. “It wasn’t a plan; it just happened,” he said.

Predictably, he also blamed the global economic slowdown. “Many of the buyers cannot complete their purchases,” he said. “We’ve got one guy with two penthouses. He’s lost 22 million pounds [sterling] in the last year in England. He told us that he would lose all his money if we finished his house,” he complained.

“We have a lot of these cases. The people would rather go to court and delay a project because they couldn’t afford to pay if the project was finished. We’ve actually written letters to say that we wouldn’t enforce the contracts. We would actually do a resale and give them their money back,” Mr Salih explained.

Salih's Summary

Asked what else needs to be done to solve the issues, Mr Salih told the Gazette that, “Going to court is pointless because no one wins. It actually jeopardizes the project because it gets bad publicity,” he said.

In closing, he stressed that Lersuang wasn’t the only company experiencing financial difficulties in the current economic climate and pleaded for more support from the government and banks for property developers.

“Who wants to invest in a country where they are shooting each other in the streets? We are here. We promote the country and we love the country. It’s difficult, though, when the BBC is reporting Thailand as one of the top five most dangerous places in the world,” he said.

Source Phuket Gazzette 20 May 2009

Century 21 seeking local realty foothold in Thailand

2009-05-23T21:20:00.001-07:00

Brokerage aiming for 30 franchisees in the Kingdom of Thailand

The local unit of the giant US real estate brokerage Century 21 plans to manage sales of at least 10 projects worth 20 billion baht and have 30 franchisees by the end of this year, says executive chairman Kitisak Jampathipphong.

"We will expand our network, build the brand and develop technology, aiming to be among the top three property service providers in Thailand," said the former executive vice-president of Harrison (Thailand).

Century 21 Realty Affiliates (Thailand) Co Ltd was established two months ago and is currently managing sales of six projects, including the three-billion-baht 340-unit Hua Hin Heritage condominium in Khao Tao, developed by Thai Factory Development Plc.

In June, it plans to begin sales of two condominiums near the Charoen Nakorn BTS station, developed by General Environmental Conservation Plc with 171 and 79 units respectively.

It will also manage sales of some freehold units of the Waterford condominium in Sukhumvit Soi 50, which would be leased for 15 years at prices of 30,000 baht per square metre, half of the freehold selling prices.

The developer Waterford Property also plans to sell 50 of the current 160 serviced apartment units at its Water Diamond project in Sukhumvit Soi 30/1 for leasehold with sales managed by Century 21 (Thailand).

The brokerage has also signed a contract to manage sales of a new 500-unit condominium worth 1.6 billion baht on New Phetchaburi Road near the Thong Lor junction, being developed by Pool Asset Co.

Besides property sales, Century 21 (Thailand) offers a broad range of services, including international sales, valuations, property management of condominiums and offices, and business affiliation opportunities or franchises.

Mr Kitisak said that after the company held talks with 20 property brokers, two had signed on as franchisees. Century 21 (Thailand) charges an upfront fee of 600,000 baht for five years, plus an additional 30,000-50,000 baht per month, which would be waived during a promotional launch.

By the end of the year, Century 21 aims to be managing 30 properties, rising to 80-100 next year.

This year it expects to have 20 franchisees nationwide to sell across its database and share commissions.

"Property developers can be our franchises as we have a worldwide network, including buyers and sellers," he said.

Thailand is the 68th country where Century 21 has opened operations. It has 8,800 offices worldwide.

"The US property market is alive now. The Thai market is also resuming, following China," said Donald Lawby, president of Century 21 Asia Pacific. "Despite the political unrest, we believe there's an opportunity here."

Source: Bangkok Post 22 May 2009

Century 21 seeking local realty foothold in Thailand

2009-05-23T21:20:00.000-07:00

Thailand - Local shift in investment

2009-05-23T21:15:00.000-07:00

Local investors are likely to play a key role in the property market in the downturn, according to the latest investment report from international consulting firm Colliers International.

The report found that industry players expect the local market to prefer domestic assets because overseas markets may continue to carry a higher degree of uncertainty over the near term.

In the first quarter, local real estate continued to interest a broad range of investors, including property funds and major developers, as property in Thailand is still cheaper than in many Asian countries, said Colliers research.

A major transaction in the first quarter was SMC Motor Plc's purchase of 3,400 square metres of retail space on Ratchadaphisek-Tha Phra Road for B53m from Chaopraya Mahanakorn Co.

Foreign property funds with strong financial status have been waiting for the right entry level to acquire Thai real estate. Investors have been keenest on land plots, followed by hotels and offices. However, as prime condominium prices flatten, land prices based on the sector's future appreciation now look expensive.

The shutdown of Suvarnabhumi Airport has scared off many foreign investors and buyers. The local property market has seen fewer retail sales to foreigners, who often buy in a high season from December to February, as well as less institutional and corporate investment.

Over recent years, one of the major foreign investors in Thai property has been Lehman Brothers, which is now in Chapter 11 bankruptcy in the US and has no need to speed up the sale of its property projects to raise funds.

Lehman Brothers (Thailand) has accumulated investment in real estate in Thailand of 50 billion baht. Key assets include Pacific Place, Mercury Building, Ital-Thai Building and undeveloped land in Koh Samui, as well as shares in Grande Asset.

"While many investors are targeting these assets, the complications of ownership and equity structures may delay the final deals. It is also not clear whether investors will be able to achieve discounted prices on these assets in the near future," the report said.

Source: Bangkok Post 23 May 2009

Rash of low-rise projects - Bangkok suffers from a significant oversupply of condominiums

2009-05-22T07:18:00.001-07:00

Switch in property demand

Demand in Thailand's property market has performed an about-turn, sending developers who last year were selling city condominiums scattering to launch low-rise projects offering townhouses, double houses and detached houses.

Demand for condominium units has fallen significantly, leaving property firms to launch low-rise projects to boost their chances of achieving revenue targets this year.

Preuksa Real Estate is one firm that has faced lower-than-expected sales at three condominium projects at Thonglor, Pinklao and Yaowarat. All were launched in the first quarter of this year. The company has now revised its business plan to focus on low-rise residential projects, especially townhouses. It has added five new townhouse projects to its portfolio this year and is now planning to launch 27 projects instead of 22.

Property Perfect is planning to launch seven or eight new residential projects this year, including detached houses, townhouses and a condominium project.

Darvid Property is planning to launch two new detached-house projects with a market value of Bt1 billion on Bang Na-Trat Road.

Asian Property Development plans to launch 12 new residential projects this year. Five of them will be low-rise projects and the rest condominiums.

Leading developer Land and Houses has also focused on townhouses and detached houses after seeing strong demand in this market.

Preuksa Real Estate director and chief operating officer Prasert Taedullayasatit said his company saw home-buyers' behaviour change from buying condominium units to townhouses or detached houses, particularly townhouses located near to the central business district. Consequently, Preuksa's new business plan will focus on townhouses, rather than condominiums.

However, the company will go ahead with the launch of its latest condominium on Sukhumvit 26, worth between Bt500 million and Bt600 million, in the current quarter. It will be a low-rise condominium with only eight storeys, he said.

Property Perfect CEO Chainid Ngow-sirimanee said his company planned to launch eight new residential projects, worth Bt8 billion, by the end of next month. This follows the nascent market recovery in the first quarter of this year, following the slump in the final quarter of 2008.

More than half of the new projects will be detached-house and townhouse projects. The company may also launch one or two condominium projects, he said.

"We are launching fewer condominium projects because we can see stronger demand for detached houses and townhouses than for condominiums," he said.

The Agency for Real Estate Affairs said there were 51 new residential projects launched in the first quarter. They are offering 10,451 units with a total market value of Bt35.41 billion.

Nearly 40 per cent of the new projects are condominiums, and the rest are low-rise projects like detached houses, townhouses and double houses.

The agency's research has found that the switch in demand from condominiums to detached houses and townhouses has left Bangkok with a significant oversupply of new condominium projects.

Source: The Nation May 20, 2009

Sansiri to overtake L&H as Thailand's biggest developer

2009-05-21T09:04:00.000-07:00

Sansiri is poised to become Thailand’s largest real estate developer this year, overtaking Land & Houses (L&H) for the first time. In 2008, Sansiri recorded sales of Bt15.1 billion, just short of L&H´s Bt15.4 billion. L&H expects 2009 revenue to be flat from 2008 at Bt14.4 billion, but Sansiri is currently targeting Bt17 billion, said the company´s president Srettha Taveesin.

“The first quarter of 2009 was the second best quarter ever for us. After the first three months of this year, we were already at Bt12.5 billion,” said Srettha.

“This year we will overtake Land & Houses as the number one developer in Thailand.”

The high level of sales recorded since the beginning of the year is partly a reflection of pent up demand carried over from last year, according to Srettha.

“The end of last year was bad for everyone; buyers were reluctant to commit at that particular time because of the political crisis, but despite the bad conditions, people do still want to buy.”

The uptick in sales that was apparent in the first quarter has not, however, benefited all developers equally. Purchasers are becoming more cautious, and, wary of projects that may struggle to close sales and reach completion, they are increasingly favouring the big developers who can more easily obtain finance and maintain cash flow.

“The big players benefited the most, because the banks will still finance them. Brand is very important, and consumers are still confident in the major developers. So the market may have only shrunk a little, but the number of players to take a share of the cake has definitely become smaller,” explained Srettha.

“I am sure we will see some small and medium sized players disappear from the market, but at Sansiri, we are lucky in that we can still obtain finance with no problem at all.

“We announced 16 projects at the start of the year. For those we had already acquired the land, but we are now looking at launching three or four extra projects at the end of this year or the beginning of next year. At the moment we have about Bt2 billion in cash in the bank,” said Srettha.

While all the projects launched by Sansiri this year have been located in Bangkok, going beyond the capital will be an important factor in the company’s future growth, Srettha explained.

“We definitely plan to do more outside of Bangkok; we are already the biggest player in Hua Hin. We have done six or seven projects there in the past, and although we haven’t had any new launches there this year, we are certainly still looking. We will look at Phuket, Pattaya, Samui, probably the only place we won’t look at is Chiang Mai.”

Source: The Property Report 21 May 2009

Real estate investors see opportunities in Asian markets except Thailand

2009-05-19T08:33:00.003-07:00

Global real estate investors are looking to tap on to growing opportunities in Asian markets.

Experts speaking at an industry event, Cityscape Asia 2009, in Singapore on Tuesday said China currently offers the most potential.

This is due to a number of good valuations available in the market, and the economy's positive growth outlook.

China's industrial property sector has been hit hard by the global economic downturn -- over 100,000 factories closed shop in 2008. But experts say these properties offer good value as they are now undervalued.

And once these properties get snapped up, re-employment will start to boost commercial and residential real estate sectors.

John Evans, Managing Director, Tractus Asia, said: "In the Asian region there are opportunities across most of the countries. However, if you look at what's happening with the economies, the only one that is showing significant growth is still China. And while that growth is nowhere near the sort of stated eight per cent that the government said, it is still a healthy three to four per cent.

“With the crisis here, you've seen a decrease in property prices and... a lot of investors are trying to get out of non-performing assets, so you are seeing a lot of opportunities in China. In the real estate sector (China) is one place I will recommend."

Duncan Owen, CEO, Invista Real Estate, said: "Many of our investors that followed us from the UK and into continental Europe are looking increasingly to diversify, and diversify into long-run growth markets. And the mature Asian markets potentially give us just that type of opportunity to deploy capital and get the long-run types of returns that investors are looking for."

But market watchers say not all markets are equally attractive and warn of potential risks in the region.

Despite growing global investor interest in opportunities in the Asian property market, experts say that investors should be wary of the Thai property market as further decreases are expected in the year ahead.

They say prices in the Bangkok residential property market could decrease by some 25 to 30 per cent in the coming year.

Mr Evans said: "One to steer clear right now is Thailand. It is pretty obvious with political and economic instability that property values will be going down. Foreign direct investment has basically dried up in Thailand.

“My personal opinion is that we are going to see some further political instability. The Thai market tends to lag behind the economy and political situation by at least a year if not 18 months. So I think we are going to see a big decrease, maybe even 25 to 30 per cent in residential property in Bangkok as there is an oversupply and more supply coming online."

But observers also do not rule out future opportunities in the Thai market if the global economy and the Thai political situation begin to stabilise.

Source: Channel News Asia 19 May 2009

Two Thailand hotels in Asia Top 10 luxury hotels

2009-05-17T01:36:00.001-07:00

Asia has long lured travellers with its fair share of exotic locations and ancient cultures. US-based luxury travel firm Kipling & Clark have issued a list of their favourite hotels in the region.

This list, complied by the firm's founder and seasoned traveler Randy Lynch, is not endorsed by Reuters.

1. Tied: Tawaraya Ryokan and Hiiragiya ryokan - Kyoto, Japan

Two of the most famous ryokans, or Japanese inns in Kyoto are located directly across the alley way from each other. It's difficult to distinguish Tawaraya from Hiiragiya -- they both represent the highest levels of service. Both ryokans successfully integrate the finest Japanese traditions and wabi-sabi philosophy, which emphasizes simplicity and purity, with contemporary conveniences that seasoned travelers expect. An added once-in-a-lifetime experience is arranging for a private Geiko and Maiko geisha dinner at either ryokan.

2. Four Seasons - Chiang Mai, Thailand

Smaller in scale than the much more expansive Mandarin Oriental Dhara Dhevi in Chiang Mai, the Four Seasons projects a more understated sense of luxury, engendering an intimate, Zen-like feel. Similar to the Mandarin, the Four Seasons staff is truly sincere and kind. With the expansion of the Four Season's Kid's Club, the family luxury travel experience here is similar to the Mandarin's. The spa and cooking class are extraordinary.

3. Tied - Mandarin Oriental Hong Kong & Mandarin Oriental Bangkok

The Mandarin in Hong Kong truly represents understated luxury, a peaceful oasis from the noisy, frenetic city outside. A recent renovation has resulted in the Mandarin's former balconies being converted to lounge/study area extensions, with stunning Victoria Harbor views.

The Mandarin Oriental Bangkok boasts a 130 year history of tradition and the highest level of service, making it a truly unique luxury property. It's unpretentious, understated and attentive and may have the largest, most varied breakfast buffet in all of Asia.

4. Gora Kadan Ryokan - Hakone, Japan

A short 45-minute bullet train ride from Tokyo, the Gora Kadan is a quiet, Shinto-Buddhistique oasis from the big city, offering rejuvenating hot mineral springs. Proprietress Mikawako, the third generation of Fujimotos to run Gora Kadan, has blended traditional Japanese ryokan hospitality with modern Western design in creating a luxurious spa experience. The Gora Kadan's original building dates back to 300 years and was the summer home of the Kan'in-No-Miya imperial family.

5. Tied - Raffles Grand Hotel D'Angkor & Amansara - Siem Reap, Cambodia

Most hoteliers would describe the Raffles Grand Hotel D'Angkor as a luxury 5-star hotel/resort, while Amansara, part of the Aman Resorts, fits into the elite category.

The Grand Hotel D'Angkor boasts an early 20th Century French colonial style property while the Amansara is formerly the guesthouse of Cambodia's King Sihanouk. The friendly, airy Raffles offers guests many opportunities to mingle with others, while the Amansara may be better for couples and high-profile travelers wishing privacy.

6. Peninsula - Tokyo, Japan

The 24-story Peninsula has the best luxury hotel location in Tokyo, directly across from lovely Hibiya Park, Imperial grounds, and adjacent to the Ginza shopping district. Envisioned by architect Kuzukiyo Sato to look like a giant Japanese lantern, the Peninsula combines subtle, Japanese hospitality with the Peninsula tradition of understated luxury.

7. Four Seasons - Shanghai, China

There is no disputing the level of service here -- personal, friendly and focused on individual comfort. The corner executive suites even have an extra room for the kids.

Banyan Tree Lijiang
8. Tied - Banyan Tree Lijiang - Yunnan, China & Hotel of Modern Art (HOMA) - Guilin, China

Located just outside the UNESCO World Heritage Site of Lijiang, the Banyan Tree Lijiang has created the perfect harmony of the local matriarchal Naxi culture and Banyan Tree's predictably friendly customer service.

With all 55 of its villas looking out at Jade Dragon Snow Mountain, this place has a spiritual soul-searching feel. The spa offers wonderful massage service from their Thai staff

The Hotel of Modern Art was founded by a Taiwanese business entrepreneur in 1997 and represents a lovely balance of world class sculpture, architecture, and art set against the backdrop of the natural beauty of the lush grounds. Despite the somewhat limited English among the staff, the genuine kindness and warmth delivered here is truly heartwarming.

9. Sofitel Metropole - Hanoi, Vietnam

Conceived in 1901, the Metropole combines wonderful French colonial architecture and history with Vietnam's cultural traditions of hospitality and service. Although there are really no bad rooms at the Metropole, the Opera Suite is a treat.

10. Maison Souvannaphoum Hotel - Luang Prabang, Laos

Formerly the residence of Prince Souvannaphouma, the small, Maison Souvannaphoum is a boutique French-colonial inspired property that is the perfect place to immerse oneself in the local Laotian culture. The friendly, intimate service here is like staying with close relatives. An added bonus of staying here is that the Maison is located on the street for the daily early morning Buddhist monks' rice offerings.

Source: AsiaOne 17 May 2009

Politics hurts Club Med in Phuket Thailand

2009-05-17T01:25:00.000-07:00

PHUKET : Vacances Siam (Club Med) Ltd expects the performance of Club Med Phuket will improve in the third quarter of this year if local political uncertainties ease.

Chavalin Rodsawaddi, the company's country marketing and sales manager, said the occupancy rate of Club Med Phuket has been around 50% since the Songkran riots, down from 80-90% in normal times. But this is still higher than the 20-30% rates of nearby hotels on Karon beach.

"Many international tourists have shifted from Club Med Phuket to Club Med Bali and the Maldives because they are very sensitive to political issues here," said Mr Chavalin.At least 100 Thais per month have made reservations with Club Med to go to either Bali or the Maldives.

Mr Chavalin expects reservations for Club Med Bali will increase at least 10% this year, while the Phuket property will contract from 80-90% last year, and the Maldives will have flat growth.

The turnover for properties in the region this year will be on par with last year, due mainly to the global economic recession. Tourism worldwide has been affected, not just in Asia Pacific, said Caroline Puechoultres, president & CEO for Asia Pacific Club Med.

"It is a good time to gain market share from rivals like luxury hotels because many customers are downgrading their accommodations and looking for value-for-money services," she said.

Ms Puechoultres believes that people still travel when the economy is bad but they spend less and shorten their stays.

According to Club Med, about 80% of its customers will not change their vacation plans and 61% feel that all-inclusive packages are more attractive in today's economic climate.

"Occupancy rates and reservations at five-star hotels in Asia will drop this year due to the downturn," she said.

The company plans to expand its business to new destinations including China, Vietnam, and Cambodia. It plans to add one project each in the Maldives and Japan. The investment plan will start when the global economy improves.

Initially, it plans to open two resorts in China - one each for ski and beach locations. The company sees high potential in China due to its rapid economic growth during the past few years.

Club Med now has 80 properties worldwide and 10 in Asia-Pacific.

Source: Bangkok Post 14 May 2009

Thai hotel industry in deep storm

2009-05-16T21:29:00.002-07:00

While the tourism industry worldwide is being buffeted by the economic crisis and swine flu, Thailand’s hoteliers have their own special problems, such as persuading guests that airports would stay open and protesters won’t invade the premises.
Bookings, especially at five-star establishments, have been down since December when anti-government protesters called yellow shirts seized Bangkok’s two international airports, closing the capital to international travel for 10 days and leaving hundreds of thousands of tourists stranded.

Then, last month, a rival group of anti-government protestors called red shirts invaded the posh Royal Cliff Beach Beach Resort in Pattaya, south-east of Bangkok, forcing the cancellation of a regional summit of Asian leaders who had gathered there.

“In December, the yellow shirts shot themselves in the foot, and then last month, the red shirts shot themselves in the head,” soon-to-retire Kurt Wachtveitl said at an event marking his 42 years as general manager of the famed Oriental Hotel in Bangkok.
“There is simply no one coming anymore - or nobody with money,” Wachtveitl said. “It’s the perfect storm, particularly for Thailand.” And particularly for five-star establishments.

Although statistics are hard to come by - tourist arrival figures have been elusive in Thailand ever since the Tourism Ministry took over the job of compiling them from the Tourism Authority of Thailand - Thai hotels are definitely hurting this year.
First-quarter earnings of the hotel groups listed on the Stock Exchange of Thailand were down by an average of 70% with some of them in the red.

“This is the worst year I’ve seen in my 25 years in the business,” Surapong Techaruvichit, vice president of the Thai Hotels Association, said, citing the industry’s litany of problems - the recession, swine flu and Thai political instability.

Thailand is hardly a stranger to political unrest. The kingdom has experienced 18 coups in the past 76 years, the latest of which took place in September 2006.
“In the past, the political upheavals lasted two to three days, so there was a shock, and then little by little, things returned to normal,” Surapong said. “But for this one, the shock is long. The closure of the airports and the Pattaya disturbances - these surprised everyone.”

According to Surapong, Thai hotel occupancy rates in May were down 50% compared with the same month last year.

Hotels are slashing prices and offering deals, making Thailand a cheap destination again after years of rising prices and healthy profits for the industry.
“Since 1998 to last year, the hotel industry went through a fantastic run,” said Andrew Langdon, senior vice president of Jones Lang LaSalle (Thailand), an international property consultant.

Langdon predicted that some hotels, especially the family-managed ones, might look for buyers this year or international brand management in response to the current downturn.

“Basically, the good times for the hotel industry are over for a year or two,” Langdon said. But nobody is expecting any fire sales.

“I would say everyone is suffering in this current crisis, but I haven’t seen any major bargains,” property consultant CB Richard Ellis chairman David Simister said.
One reason Thai hoteliers are unlikely to be selling their properties cheap is the tremendous confidence many have in Thailand as a tourist destination despite its current political problems.

“Thailand is down, but it’s not out,” said John Koldowski, head of research at the Pacific Asia Travel Association.

Source: Gulf Times 16 May 2009

Thaksin wants to buy island in Montenegro

2009-05-14T21:41:00.000-07:00

BANGKOK - THAILAND'S fugitive former leader Thaksin Shinawatra has acquired a passport from Montenegro and is considering buying a resort island there, an adviser said on Wednesday.

Removed from power in a 2006 coup, Thaksin has been on the run since he fled Thailand ahead of a corruption conviction last year.

Last month, the Thai government revoked the personal passport of Thaksin, whom it accuses of stoking anti-government riots in Bangkok that left two people killed and hundreds wounded.

Noppadon Pattama, a lawyer who has been an adviser to Thaksin, said the ousted prime minister has a Montenegrin passport and at least a few others.

'Leaders of a few countries have given Thaksin passports because they sympathize with his position and know the injustice he suffered,' Mr Noppadon said but did not specify which countries have offered him travel documents.

In January, Nicaragua named Thaksin an 'Ambassador on a Special Mission' to bring investment to the Central American country and issued him a passport.

Mr Noppadon said Thaksin has also expressed an interest in buying Sveti Nikola island, despite also recently saying he is short on cash since the Thai government froze his assets after convicting him in absentia violating a conflict of interest law while in office.

'He thinks there is a lot of potential there in terms of developing its tourism business,' Mr Noppadon said. 'But I am not sure about the status and whether he has officially entered a bidding process or anything.' The acquisition of a new passport is expected to further complicated Thailand's efforts to extradite the ousted premier.

Vice Foreign Minister Panich Vikitsreth said the ministry has ordered several Thai embassies to look into confirming the issuance of the passport.

The ministry has earlier submitted extradition requests through diplomatic channels to the United Arab Emirates and Nicaragua to facilitate the repatriation of Thaksin who fled the country before the court issued its verdict and sentenced him to two years in prison.

Source:

Hotel earnings in Thailand plunge 70 per cent

2009-05-13T14:39:00.000-07:00

The first-quarter earnings of major listed hotel companies plunged by an average of more 70 per cent year on year, with the depressed state of the sector expected to worsen in the current quarter and continue until the high season returns in the final three months of the year.

Kosin Sripaiboon, a senior vice-president at UOB Kay Hian Securities, said the earnings drop would continue for at least two quarters, due mainly to the domestic political uncertainty.

"Political instability concerns hotel operators more than the economic recession. The slow response by Asean leaders to invitations to the Asean Summit in Phuket showed many leaders did not want to join the event," he said, adding that the Pattaya violence that led to the previous summit's postponement had severely tarnished Thailand's image.

The government yesterday decided to postpone the Asean meetings to October. Earlier, it had tried to convince other nations to convene in Phuket next month, including granting permission for their leaders to bring in their own security details.

The Kingdom's tarnished image is expected to lead to a sharp drop in tourist arrivals. According to brokers, about 100 hotels are currently up for sale.

Thailand has been hit hard by the global economic downturn, anti-government protests and the flu scare, Kurt Wachtveitl, departing general manager of the Mandarin Oriental, Bangkok, told the Foreign Correspondents' Club of Thailand on Tuesday night.

"It's the perfect storm, for Thailand in particular. We have 45 suites, and for the next two to three months, we don't have a booking for a single one of them," he said.

Research by Asia Plus Securities advised investors to limit investment in hotel stocks, due to the political conditions as well as the

outbreak of type-A (H1N1) influenza, which will likely have a further negative impact on the tourism industry.

Kosin said the recent hike in oil prices would also pressure hotels' operating costs, while room rates could not be cut further, as hotels were concerned about margins and their brand image.

"The hotel and tourism business is one of the worst-performing securities sectors this year," he said. "The situation is not likely to recover until the fourth quarter."

Four listed hotel companies have reported their quarterly results so far. Shangri-La Hotel's earnings dropped 98 per cent to Bt3.2 million in the first three months, from Bt154.46 million in the same period last year.

It attributed the drop to declining room rates and revenue from food and beverages in light of the political situation and global economic crisis.

Laguna Resorts and Hotels suffered a plunge of more than 80 per cent in its quarterly net profit to Bt109.3 million, from Bt718.6 million a year earlier. Its occupancy rate fell to 60 per cent in the first quarter, from 87 per cent in the same period last year.

Minor International's consolidated net profit

contracted 47 per cent to Bt400.36 million, from Bt750 million, although revenue declined only 1 per cent year on year to Bt4.25 billion.

The average occupancy rate at Minor's properties was down from 80 per cent in the first quarter last year to 58 per cent this year, due to the prolonged political unrest and the aftermath of the Bangkok airport closures late last year.

Minor's revenue from the hotel business - which contributes 30 per cent of its income - was Bt1.27 billion in the quarter, down from Bt1.76 billion in the same period last year.

The Erawan Group booked a net loss of Bt20.95 million in the quarter, against a net profit of Bt134.24 million a year ago.

Source: The Nation May 14, 2009

Foreign visits to Thailand down by half

2009-05-13T14:27:00.000-07:00

The number of international tourists plunged more than 50 per cent year on year in the first four months, tourism associations said yesterday.

Forward bookings are reportedly very slow as well, due to the recent flu outbreak.

Association of Thai Travel Agents president Surapol Sritrakul said Chinese, Japanese and South Korean tourists represented much of the drop in visitor numbers between January and last month.

The recent outbreak of flu has become the latest obstacle to tourism, along with the prolonged worldwide economic crisis and internal political problems.

However, Surapol said while it was too soon to predict what effect the type-A (H1N1) flu virus would have on tourism, his association had discussed preventive measures with all of its members.

He said tourists in many countries were worried about the flu even though it had not yet been found in Thailand.

"If the disease reaches this country, the tourism sector will suffer an even greater impact," said Surapol.

The flu is also hitting outbound business, with local operators now receiving cancellations.

Surapol, who also runs Jalpak Tour and Travel, said some families had cancelled trips to Japan to avoid flu infection.

Thai Hotels Association president Prakit Chinamour-phong said new bookings from abroad were reportedly very slow, particularly for the next two months.

"There are many problems in our country causing the decline in tourism," he said.

However, hotels and tour operators see potential from the Middle East, where they joined the Arabian Travel Mart held in Dubai last week.

Tourism Council of Thailand chairman Kongkrit Hiranyakit estimates the tourism sector will decline 30 per cent in the first half of the year and possibly 20 per cent for the full year.

Source: The Nation 12 May 2009

Warren Buffett Speaks: 25 Best Warren Buffett Quotes on His Strategies, Investments, and Cheap Suits

2009-05-11T15:24:00.000-07:00

He’s called the Oracle of Omaha, and for good reason: not only is he one of the best investors of all time, but he’s also a witty communicator. If you read one of Berkshire Hathaway’s annual shareholder letters (BTW–I love their Web site design!), you’ll feel like Warren Buffett is one of the Good Guys–someone you can trust, someone who will tell it like it is, and someone who’s always willing to laugh with you at mistakes.

Here are twenty-five awesome quotes from the man himself. I find these quotes to be especially comforting when you’re ‘financially depressed’–after all, he views a market slump as a good thing!–so I hope these can remind everyone that we just need to do the basics, and we”ll be OK. Be a consistent net saver, buy the market through ups and downs, be a decent human being, and rest easy.

On Investing

“Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.”
“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
“Why not invest your assets in the companies you really like? As Mae West said, “Too much of a good thing can be wonderful”.”
On Success

“Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars.”
“The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.”
“You do things when the opportunities come along. I’ve had periods in my life when I’ve had a bundle of ideas come along, and I’ve had long dry spells. If I get an idea next week, I’ll do something. If not, I won’t do a damn thing.”
“Can you really explain to a fish what it’s like to walk on land? One day on land is worth a thousand years of talking about it, and one day running a business has exactly the same kind of value.”
“You only have to do a very few things right in your life so long as you don’t do too many things wrong.”
On Helping Others

“If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
“I don’t have a problem with guilt about money. The way I see it is that my money represents an enormous number of claim checks on society. It’s like I have these little pieces of paper that I can turn into consumption. If I wanted to, I could hire 10,000 people to do nothing but paint my picture every day for the rest of my life. And the GNP would go up. But the utility of the product would be zilch, and I would be keeping those 10,000 people from doing AIDS research, or teaching, or nursing. I don’t do that though. I don’t use very many of those claim checks. There’s nothing material I want very much. And I’m going to give virtually all of those claim checks to charity when my wife and I die.”
“It’s class warfare, my class is winning, but they shouldn’t be.”
“My family won’t receive huge amounts of my net worth. That doesn’t mean they’ll get nothing. My children have already received some money from me and Susie and will receive more. I still believe in the philosophy - FORTUNE quoted me saying this 20 years ago - that a very rich person should leave his kids enough to do anything but not enough to do nothing.”
On Life

“Chains of habit are too light to be felt until they are too heavy to be broken.”
“We enjoy the process far more than the proceeds.”
“You only find out who is swimming naked when the tide goes out.”
“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
“A public-opinion poll is no substitute for thought.”
Funny Ones

“A girl in a convertible is worth five in the phonebook.”
“When they open that envelope, the first instruction is to take my pulse again.”
“We believe that according the name ‘investors’ to institutions that trade actively is like calling someone who repeatedly engages in one-night stands a ‘romantic.’”
“When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.”
“In the insurance business, there is no statute of limitation on stupidity.”

Source: Banking.com 7 May 2009

Downturn leads to hotel sales in Thailand

2009-05-11T14:44:00.000-07:00

More than 100 hotels and resorts nationwide are being put up for sale, as operators succumb to the impacts of the economic crisis and political unrest, industry insiders said.

The number is expected to rise if the situation does not improve within two years, said Chanin Donavanik, chief executive officer of one of Thailand's largest hotel chain operators, Dusit International.

"This year is the worst for our hotel industry in 20 years," he said.

As if the worsening global economy and domestic political unrest weren't enough, Thailand's hotel and tourism industry now faces the threat of swine flu.

A property sales representative in Samui, who declined to be named, said most of the hotels being sold are in the major centres and provinces of Bangkok, Phuket, Koh Samui, Hua Hin, Pattaya and Chiang Mai.

"They include not only small hotels but also five-star hotels," she said.

Hotels in famous destinations such as Samui and Phuket have been the first to feel the pinch of the economic and political problems, as their local economies mainly rely on tourists, whose numbers have declined continuously since November's temporary seizure of Suvarnabhumi and Don Muang airports by opponents to the then government.

Phuket's visitor numbers declined by 60 per cent in the high season from November to March.

Koh Samui benefited after The tsunami wrought its destruction on the Andaman coast in 2004, which saw many foreign tourists opt not to visit Phuket. Hotels mushroomed on the island in subsequent years.

"But the situation has changed. Many new hotels on Samui are suffering from waning tourist numbers. Some owners have decided to sell as they cannot make any income from tourism, while still being saddled with loans," said the sales representative.

Forward booking for Koh Samui's high season at the end of this year has been very slow, as tourists seek to avoid turbulence in Thailand.

According to the property agent's firm, Samui Buri Resort and Spa is selling for Bt1.1 billion, while newly opened Villa Lawana wants Bt1.5 billion. Meanwhile, Ban Taling Ngam is being sold at public auction, listed at Bt1.8 billion with 250 buyers, and Nora Beach Resort and Spa is offered at between Bt2 billion and Bt2.5 billion.

Some hotels in Chiang Mai have suffered the same fate. Unlike Phuket or Samui, Chiang Mai's tourism sector relies mainly on Thai visitors. The province has witnessed shrinking domestic tourist numbers this year, as Thais are hardly in the mood to spend and travel amid the gloomy economic conditions.

As a result, one of the top luxury hotels in the province is reportedly being put up for sale, along with three other hotels in Chiang Mai.

In the capital, 24 hotels are reportedly on the market, including the Millennium Hilton, Swissotel Le Concorde and The Emerald Hotel.

Prakit Chinamourphong, president of the Thai Hotels Association, said many hotels have struggled to survive the impacts of the economic and political unrest, offering heavy room discounts, making staff cuts and selling off businesses.

Up to 70,000 hotel employees are expected to lose their jobs if the problems are not solved, he said.

To deal with the crisis, the Tourism Authority of Thailand (TAT) and the private sector are preparing a series of tourism promotions.

The agency also plans to venture overseas to rebuild confidence, joining the Arabian Travel Mart in Dubai this month. Moreover, the TAT is revising its marketing strategies to encourage non-high season tourism.

Nonetheless, the agency has revised downward its projected number of tourist arrivals for this year from 14.8 million to approximately 12 million.

Source: THE NATION May 11, 2009

Ao Po Grand Marina, Phuket’s latest and most spectacular superyacht marina

2009-05-11T14:34:00.000-07:00

With the official opening of the Ao Po Grand Marina, Phuket’s latest and most spectacular Marina development in the North East of the island, Yacht owners can now berth their superyacht there. Construction of the Marina started in 2006, and the Marina is now open for business. With an impressive capacity of 200 berths, the Marina can host yachts of any boat length from 6m up to 80m+ and has a special focus on facilitating Superyachts.

Since the official opening, a significant number of superyachts have already visited the new marina, including Blue de Nimes, JeMaSa, SuRi, Moecca and Vie Sans Soucis. These superyachts have already enjoyed the comforts of a deep water fuel dock, a high capacity fuel pump and 3 phase electricity up to 200A.

“Private yacht owners and yacht charter companies choose Ao Po Grand Marina for its 24 hour access with zero tide restrictions and its prime location at the gate of Phang Nga Bay, Phuket’s premier sailing grounds. Ao Po Grand Marina is close to the main sailing destinations and only 15 minutes from Phuket International Airport and major hotels and resorts”, explained Khun Kasem Chiarasomboon, Managing Director, Ao Po Grand Marina.

The Marina, located just 15 minutes from Phuket International Airport, is the first phase of a larger real estate development project covering 150 rai of uniquely located land. Upon completion in 2013, this prestigious project will consist of a Marina Village (featuring all major facilities like restaurant, bistro, clubhouse, retail outlets and offices for marine-related businesses), a five-star and 80-room boutique hotel, two man-made lagoons and an exclusive array of private real estate villas.

Phang Nga Bay is a favorite destination for charter boats. As Ao Po Grand Marina has direct access to the Bay and no tide restrictions it is attracting some of the big players in sailing charter holidays. Sunsail moves to the Grand Marina as of May 2009 and Amancruises (charter operator for the Amanpuri resort) and Tawan Cruises already did so in October last year. Also for quite a few of the up-market resorts located on islands in the Bay the use of the Grand Marina to transfer their guests was a logical choice.

A fleet of 60 odd yachts settled itself comfortably and safely in Ao Po Grand Marina on January 26, 2009 in anticipation of another great regatta around Thailand's most famous bay, Phang Nga Bay. The Ao Po Grand Marina sponsored the opening party of this 2009 edition and invited all competitors to stay overnight free of charge in order to have an easy and quick start of the regatta the next morning. This generous offer was taken up by most of the yachts taking part, resulting in a very well attended opening night where as usual food was aplenty (also sponsored by the Grand Marina) and drinks fully in line with that.

"Everybody was greatly pleased with the event. The opportunity to have their yacht in the Grand Marina cut down on their logistics enormously", says Mr. Simon Grant, Marina Manager of the Ao Po Grand Marina. No catering with rocking dinghies as usual but provisions went straight from the walkways on to the boats. The yachts left early Tuesday January 27 to start their regatta around the Bay. The Phang Nga Bay Regatta is a unique annual event attracting more competitors every year. Now in its 12th year some 60 yachts went out competing in 6 classes.

Source: www.superyachttimes.com 11 May 2009

Thai investors look to overseas property

2009-05-11T14:26:00.000-07:00

An increasing number of Thai investors are taking an interest in property projects overseas, in the light of declining asset values and the prospect of a global economic recovery next year, international property agency Jones Lang LaSalle (Thailand)'s managing director said.

Thai investors have shown a strong interest in expanding their investments in commercial buildings in overseas markets including the UK, Japan, Hong Kong and Singapore, Suphin Mechuchep said.

"If they wait to buy at the bottom price in the second half of this year, they stand to lose a business opportunity because investors from other countries also sense a bargain. As a result, Thai investors are keen to buy or take over commercial assets overseas," she said.

Investments made now could generate average returns of 7 to 10 per cent a year, she said, adding that their break-even period should also be shorter.

Suphin pointed out that Central Group invested in CentralWorld and @Office on Ratchaprasong Junction during the financial crisis of 1997. Central Group now sees an average return on investment from the project of 7.5 to 8 per cent a year.

Quality Houses took over the QH Lumpini office building in 1998, shortly after the crisis. Its return on investment averages 7 to 8 per cent. Returns on investments made during economic slumps tend to be bigger and come in quicker than investments made in normal periods, Suphin said.

Meanwhile, Tonson Property, a development and investment arm of the Rattanarak tycoon family, has set aside Bt500 million a year to invest in commercial properties such as hotels, resorts and office buildings in both the domestic and overseas markets.

The Rattanarak family holds a major stake in Bank of Ayudhya.

The company's managing director, Kanis Saengchote, said now is a good time to invest in property and commercial buildings because asset values are between 30 and 50 per cent lower than in normal periods.

"We are negotiating with French, British and Middle Eastern investors to raise money through property or other funds. This will be combined with our capital to expand our investments," he said.

TCC Land, the property arm of beverage tycoon Charoen Sirivadhanabhakdi, has set aside Bt4.5 billion to invest in commercial property overseas this year, with a focus on the retail and hospitality businesses, deputy CEO Soammaphat Traisorat said.

Early this year, the company took over a hotel in New Zealand worth nearly Bt1 billion.

"This is a good time to invest, as we can bargain for a discount of more than 30 per cent compared to last year," he said.

TCC Land owns a number of hotels in Thailand and overseas.

Source: THE NATION May 11, 2009

Paris Hilton wants to be the next Donald Trump — she’s eying up a career in real-estate

2009-05-11T09:14:00.001-07:00

The 28-year-old socialite and hotel heiress says she is keen to become a serious businesswoman.

“I’m a brand. I’m a businesswoman,” she told Tatler. “I do everything — I act, I sing, I design, I write books. What I love the most is the business part. I like what it is leading to. I eventually want to get involved in real-estate.”

Hilton also revealed the worst moment in her life was when she realized her beloved pet dog Tinkerbell had gone missing.

“It was so scary — she was gone for a week and I wasn’t sure if she’d ever come back,” she said.

“It was like losing a child. She was a couple of blocks away at an old lady’s house. The lady didn’t watch TV so she didn’t know my dog was missing. Then she saw the sign and I got her back.”

Source: Showbizspy.com 11 May 2009

Dutch investment group ECC sees potential for its destination malls in Thailand and Vietnam

2009-05-09T18:50:00.000-07:00

Pictured Left: The Promenada Chiang Mai will have two floors with a tropical feeling and resort style, with a focus on fashion shows and other events.

'You should be fearful when everyone is greedy and greedy when everyone is fearful," is one of the maxims of billionaire investor Warren Buffett. The saying resonates these days with Tjeert Kwant, whose Netherlands-based ECC Group is looking to tap into retail markets across the region including Thailand.

As companies start become increasingly cautious about expansion, few are looking at the opportunities becoming available as prices of land and construction costs drop.

"I must admit that in past there was an overvaluation of property assets but lately the prices have started to normalise and it has started to give us some hope of being able to make our moves," said Mr Kwant, the CEO and partner of ECC.

ECC is a real estate development and investment group with a focus on emerging countries. Since its establishment in 1991, it has specialised in developing and managing large-scale retail projects under the Promenada brand name.

The group is active in many markets in Europe and Asia including Poland, Hungary, the Czech Republic, Vietnam and Thailand and has so far invested $350 million in completed projects. Another $500 million in investments are in the pipeline, focused mainly on retail development in Southeast Asia.

The group's success in Budapest encouraged ECC to look beyond eastern Europe and it sees markets in this region as underdeveloped, especially the likes of Vietnam.

Even in countries where the retailing market is mature, such as Thailand, there is a market for a niche retailing, says Mr Kwant. ECC aims to open at least one or two new malls in Bangkok and is also building a mall in Chiang Mai.

ECC, he says, focuses on developing new projects and is not very keen on taking over older ones and renovating them, or even becoming a financial investor. The reason is that returns on new projects are in excess of 20% but such high figures are not available in investment projects.

‘‘I must admit that in past there was an overvaluation of property assets but lately the prices have started to normalise and it has started to give ussomehopeof being able to make our moves’’ TJEERTKWANT CEO and partner, ECC Group

The focus on destination malls has helped push ECC to look for markets where the demand exists but the supply is lacking. Chiang Mai is one such market as it has only one major mall, Central Airport Plaza.

"If we create a resort-style shopping mall, the acceptance would be relatively good," he said.

The Promenada Chiang Mai would have two floors with a tropical feeling and resort style, with a special focus on fashion shows and other attractions for shoppers. "Our aim is to create an ambiance of a high-street shopping that is covered and cooled," Mr Kwant said.

The Promenada Chiang Mai is expected to open in the second half of 2011, located along Ban Sahakorn Road, linking the Superhighway and second ring road, in an area well known by Chiang Mai residents for its accessibility and shopping opportunities.

With 75,000 square metres of retail and entertainment space, Promenada Chiang Mai will offer an innovative mix of international and local brands in fashion, food and beverages, as well as leisure and entertainment.

The project represents an investment of 3.1 billion baht. When completed, it will employ 3,000 Thai people. Construction is scheduled to start in the second half of 2009.

ECC International Real Estate, ECC Group's holding company in Thailand, has received a licence from the Board of Investment (BoI). For the development of the Promenada Chiang Mai, it has formed a partnership with VGF Design, a Chiang Mai-based company specialising in the design, manufacturing and retail of luxury furniture.

Although some Thai retailers have expressed interest in Vietnam, none have taken the plunge yet, says Mr Kwant. "There is no destination shopping mall in Vietnam and ours would be the first."

ECC plans to invest $105 million in a shopping mall that would have 82,000 square metres, in collaboration with Singapore's GuocoLand Group.

Singapore@Canary, a project similar to Promenada Chiang Mai, will be located on the outskirts of Ho Chi Minh City. Phase I is expected to be completed in the third quarter of 2011 and Phase II in the fourth quarter of 2012. It would be Vietnam's first international standard destination mall.

Mr Kwant said ECC aimed to have at least a few malls in Vietnam as there was a major demand but the number of sites was very limited.

To help finance its projects in Southeast Asia, the group established ECC Invest in 2007. It is launching a fund, ECC Retail Investment Holding, with a total size of $250 million. The group says that its investment in Asia is likely to be financed mainly through internal sourcing.

Source: Bangkok Post 9 May 2009

Exchange-traded index of commercial property firms rallies

2009-05-08T18:03:00.000-07:00

Dow Jones U.S. Real Estate Index up nearly 60% from March lows

The stock market has for weeks been dogged by talk of trouble lurking in commercial real estate, yet an exchange-traded fund of commercial property companies has rallied 50% in the last two months - despite commercial mortgage delinquencies hitting 11-year highs in April.

Delinquencies are up "by a factor of five from a year ago. Even though commercial real estate lags the cycle, the numbers highlight the battle banks face in producing profits," said Nick Kalivas, equity analyst at MF Global Research.

Property research firm Trepp LLC on Thursday reported the level of loans 30 days or more behind in payments last month climbed to 2.45%, with the credit squeeze making it hard for landlords to refinance bank loans. 'The numbers highlight the battle banks face in producing profits.'

— Nick Kalivas, MF Global Research

"We're very concerned about commercial real estate," said Bill Feingold, managing director at Newport Value Partners. He believes the stock market has gotten ahead of itself, rallying on earnings from banks and other companies that stem from cost cuts as opposed to growth.

On Friday, financial shares paced strong gains after the Labor Department reported job losses slowed in April. See Economic Report. The Dow Jones Industrial Average ($INDU: 8,574.65, +164.80, +2.0%) was up 164.80 points, or 2%, to stand at 8,574.65, giving the blue chips a weekly gain of 4.4%. The S&P 500 ($SPX: 929.23, +21.84, +2.4%) added 21.84 points, or 2.4%, to 929.23, which translates into a 5.9% rise from the week-ago close. The Nasdaq Composite (COMP: 1,739.00, +22.76, +1.3%) advanced 20.76 points, or 1.3%, to 1,739.00, up 1.2% for the week.

Also rallying, the Dow Jones U.S. Real Estate Index (IYR: 34.81, +2.21, +6.8%) rose 6.8% to 34.81, up nearly 57% from its March 6 close of 22.21. In the same time, the S&P 500 has gained 39% from its March 6 low. The index's components include Simon Property Group Inc. (SPG: 53.93, +1.88, +3.6%) , the nation's largest mall owner and biggest publicly traded U.S. real estate company.

Simon Property on Wednesday said it would sell $800 million in new stock, its second foray into the equity markets in less than two months, illustrating its need for capital.

Shares of Simon Property on Friday gained 2.8%. The company earlier this month reported first-quarter earnings rose 14% amid higher rents, although occupancy rates weakened as retailers hit by declining sales posed difficulties for mall landlords, some of whom are saddled with large debt.

One case in point is Simon Property rival General Growth Properties Inc. (GGWPQ: 0.94, +0.01, +0.5%) , which last month filed for bankruptcy protection as the Las Vegas developer and shopping mall owner struggles to restructure $27 billion in debt. Read more.

Once one of the most highly valued REITs [Real Estate Investment Trusts] in the market, Nasdaq has since suspended trade of General Growth Properties' stock, which in recent weeks dived under one penny. A year-ago, its stock priced at $42.00 a share.

One of the key stand-outs in the most recent Senior Loan Officer Survey is "the extent to which demand for commercial real estate loans has collapsed," Merrill Lynch & Co. Inc. analysts Drew Matus and David Rosenberg wrote in a Tuesday note.
The net percentage of banks reporting weaker demand for commercial real estate jumped to 66% in the second quarter from 55% in the first quarter in what the analysts called the weakest showing on record.

"Meanwhile, the majority of banks continue to tighten their lending standards on commercial real estate loans. Fully 66% of banks tightened standards and, though that is marginally better than the 79% in Q1, this tells us that we can expect continued declines in commercial construction the quarters ahead," Matus and Rosenberg said.

Source: MarketWatch 8 May 2009

Thailand's Colliers: Time to bargain on office rents

2009-05-08T17:50:00.000-07:00

10% rise in Bangkok office vacancies in Q1

Office building tenants in Bangkok should seize the opportunity to negotiate with landlords to get cheaper rents during the global financial crisis, suggests property consultant Colliers International Thailand.

Managing director Patima Jeerapaet said the financial tsunami had affected major business sectors including automobiles, electronics and electrical appliances, banking, finance and securities, medical and services such as hotels, airlines and travel agencies.

"These [sectors] have been affected by the global crisis and many of them need to merge," he said.

Some recent mergers between securities and financial firms include Finansa, Syrus and Asia Credit Securities, and CIMB GK and BT Securities.

As a result, the Bangkok office space vacancy rate in the first quarter rose by 10%, while rents dropped by 10% compared with last year, with a decline of 15% for grade A office space.

Landlords had controlled the market for four years from 2004-07, being able to dictate rental fees. Now the tables have turned, and negotiation should be completed as soon as possible before conditions change, he added.

"Not all tenants will get lower rates or better bargains," Mr Patima said.

"Landlords will consider a tenant's situation and business type and may ask to see a financial statement or a report of how many staff cuts the company has made."

However, a new wave of tenants emerged in the first quarter: property firms, agents and brokers, and representative offices for new hoteliers starting operations in Thailand.

"Bangkok has the potential to be a regional hub as some multinational companies have relocated here. The government should take this chance to promote itself with incentives such as in Singapore, where the government cut office tax by up to 40%," he said.

Colliers advises tenants to apply four strategies:

- Early renewal: Tenants should negotiate with landlords before the current contract expires. This will benefit both parties as the landlord will get a guaranteed new contract while the tenant will get a better rent.

- Renew: Tenants should negotiate the rent and ask for other incentives such as decreases in parking fees.

- Blend & extend: This strategy should be applied in cases where a tenant has two or more contracts at an office building. Combine the contracts and set the same expiry date as it will be easier when moving out.

- Relocate: Now is a good chance to move from grade B to A as the rents are quite close and this adds bargaining power, but tenants should calculate moving costs and other expenses when making this choice.

Source: Bangkok Post 9 May 2009

A thousand Thailand rooms for USD$28 online

2009-05-08T11:36:00.000-07:00

Millennium & Copthorne Hotels are offering 1,000 room nights from 1,000THB (USD28*) for two of its hotels in Thailand as a part of its May Madness holiday package.

The 5-star Grand Millennium Sukhumvit Bangkok and Millennium Resort Patong Phuket will launch the packages online at www.millenniumhotels.com from now until 15 June 2009.

Special rates are valid for a maximum two-night stay and include a complimentary 30-minute massage. Additional room nights are also discounted.

“If anyone can find a better online deal for our Hotel than this, we’ll match the price and give them a complimentary stay” said John Gerrard, Grand Millennium Sukhumvit GM.

Grand Millennium Sukhumvit guests also have complimentary access to the hotel’s putting and chipping greens.

Millennium & Copthorne are rolling out other deals online including early-bird deals of up to 20 per cent off best available deals if booking 30-days in advance with the Group’s hotels across Asia.

Source: ETravelBlackBoard.com 6 May 2009

Major Property Developments In Thailand

2009-05-08T11:22:00.000-07:00

The second largest developer in Thailand, Sansiri Pcl, is getting set to begin two new residential developments in Bangkok. The projects are to be located in the Prachauthid area of the city, where the company has had great success with another development launched in 2008, the Saransiri Wongwang-Prachauthid.

The two new projects are the Saransiri Prachauthid – Suksawad, which is worth some Bt1.7 billion, and the Town Plus Prachauthid, which is worth approximately Bt1.1 billion. The two new developments have already achieved pre-construction sales of 25 percent, according to the company.

Town Plus Prachauthid is a mixed-use development that will have townhouses, duplexes and shops for a total of 499 units available. Saransiri Prachautid – Suksawi will have 340 detached homes, with a starting price of Bt3.99 per unit. The two projects are targeted for the middle to upper income market.

Source: HomeGoFast.com 8 May 2009

Real Estate: Buy or Rent?

2009-05-07T18:27:00.000-07:00

A city-by-city guide will help you decide.

Designer Delia Seaman wishes she'd bucked financial fashion and rented.

Designer Delia Seaman is fashionable, successful and regretful. Her clothing and jewelry label, Decolette, has been catching on with celebrities such as Hilary Duff, but sales at her West Hollywood boutique are still suffering amid the recession. Eager for rainy-day funds, Seaman, 40, has put her 1920s Spanish-style bungalow up for sale at an asking price of $999,000. After Realtor fees and closing costs, she'll clear little or nothing beyond the $922,000 she paid for the property four years ago--and that assumes, optimistically, that she will get something close to the asking price.

Even more sobering, Seaman did some math showing that the $60,000 in yearly mortgage payments, insurance and property taxes she's been shelling out exceeded what she would have spent renting a similar home at $36,000 annually. The tax deductions she got for mortgage interest and property taxes don't come close to making up the $96,000 difference in cost over the four years, she says. "I feel like the whole housing dream is kind of a joke," Seaman says. "I paid in for four years and got nothing. I wish I'd never bought."

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Conventional wisdom is that renting is equivalent to throwing money away. That wisdom is wrong, and not only because home prices occasionally crash. It can be wrong in a flat market, too. Pay a high enough price in relation to rental value, and you're getting a raw deal, even if the price holds up. It's like paying a lot of money for a stock with a meager dividend. This is a bad deal in a flat market.

During the housing bull market it was easy to lose sight of the relationship between price and earnings (earnings being the rental value of a home). Assume that house prices will go up forever and you can kid yourself that earnings don't matter. But as the country has discovered in the past two years, house prices do not go up forever. Earnings matter.

It pays to do the math, and that means thinking in terms of net rent. That's the annual rent a house would command, minus property taxes, insurance, maintenance costs, losses from occasional vacancies and any fees paid to property managers. The house you live in has slightly higher earnings than the same one you rent out to a stranger, because you aren't paying for a property manager.

Expressed as a percentage of resale value, annual net rent is what an all-cash buyer of the property would clear by owning it and is comparable to a bond's yield. If your net rental yield (also called a capitalization rate) is lower than the yield on investments that are less risky and illiquid--high-grade municipal bonds, say--it's a sell signal if you're the owner. Or a signal to keep renting if you've been thinking of buying.

An important fact about bonds is that, with a few exceptions (like U.S. Treasury inflation-adjusted securities), they don't maintain their purchasing power. Houses and stocks, in contrast, have prices and earnings that tend to maintain their purchasing power over long periods. So, when comparing bond yields with earnings yields on stocks or houses, subtract inflation from the bond yield to get a real return. At the moment, inflation is around 0%, so the 4% you get on a municipal bond is close to the real return. If a muni yields 9% during a period of 5% inflation, its real yield is only 4%.

Renting tends to make the most sense in weak real estate markets. We've carped about this before in these pages (see FORBES, June 5, 2006). Last year housing prices fell, on average, about 20% nationwide. Futures trading in house price indexes says that traders expect house prices to fall another 22% in 2009.

Steps to Take Before Mom Moves In
Save the Family Business
The Bank Of Mom & Dad
Risk-Free Retirement
To Buy or Rent?
Dirt Cheap
Family & Retirement
Investments
But you don't have to put credence in the futures market to make a rational decision about whether to rent. Just calculate the earnings yield on a house. Keep renting (or, if you own, sell) if the earnings yield is lower than 3%. Be a buyer if the earnings yield is higher than 4%. In between be influenced by whether you think rental values will hold up over the next decade.

Seaman's property agent, John M. Barrentine, calculates that her house would yield close to $1 million in a sale but less than 3% of that (or $30,000 a year) in net annual rent if leased out. She would be better off selling and putting her money into California municipal bonds. State general obligation bonds due in 2014, rated a, yield almost 4%. These bonds may default (the state's finances are looking very shaky), but if they do the L.A. property market is in for trouble, too.

In markets where house prices didn't spike as they did in L.A., cap rates tend to be a bit more generous. That's why Kristen Cevoli is buying rather than renting. In March the 25-year-old lawyer paid $235,000 for a two-bedroom apartment in Pennsport, a gentrifying South Philadelphia neighborhood.

Source: Forbes Magazine May 5, 2009

Bangkok's Four Seasons Hotel sees fall in occupancy rate to 50%

2009-05-07T07:50:00.000-07:00

The Four Seasons Hotel Bangkok expects its occupancy rate to edge down to 50% this year, from 55% in 2008, with the combined impact of local political instability and the global downturn.

The five-star hotel estimates that the airport closures last year reduced its occupancy in 2008 from at least 70% to only 55%.

An increase in tourists between February and early April had been expected to improve this year's occupancy. But after the Songkran protests the hotel cut its projection to 50%, said Rainer Stampfer, regional vice-president and general manager of Four Seasons Hotel Bangkok.

"Actually, Thailand has high potential for tourism and should have done better without political problems," he said.

"Without political problems, we anticipate that Bangkok should witness a mild impact from the bad economy because we offer a better business environment than China, Hong Kong and Singapore."

The general manager is pessimistic about a full recovery for tourism by the year-end.

He also believes 2010 is unlikely to be a great year for Thailand's hotels as other destinations are competing with great value and lower prices.

The meeting and incentive sector has also been hit hard by local political turmoil. Mr Stampfer sees Asian corporate groups as the worst affected market.

International corporations concerned about organising conventions and events here may shift to locations they consider safer, including Singapore, Kuala Lumpur, Hong Kong and Shanghai.

"This situation may continue until the beginning of next year because organisers need nine months to prepare for an event. Surely Singapore and Kuala Lumpur have benefited considerably from the trouble here," he said.

For example, cancellations from Koh Samui, Phuket and Chiang Mai last December went to Langkawi and Bali.

To counter these challenges, Four Seasons will launch more promotions and special packages - such as a free night's stay for three paid nights - to attract international and local tourists.

"We have reduced our staff from the level of nine months ago. In February and March, we survived with improving tourism. In April, that good work was destroyed. We have to see what May and June bring us. If we get on the road of recovery, then we won't have any layoffs," he said.

Thailand's worst-hit resort destination is Chiang Mai, which suffers from a room oversupply on top of economic and political problems, said Mr Stampfer.

He said the Tourism Authority of Thailand (TAT) and airlines should collaborate to promote and increase international direct flights, particularly from short-haul markets such as Japan, Dubai, Singapore and Hong Kong.

Source: Bangkok Post 5 May 2009

HotelCorp (HCL) acquired Bel Air Panwa Resort Phuket

2009-05-07T07:14:00.000-07:00

HotelCorp (HCL), one of Thailand’s largest privately held hospitality management companies, has taken over the management, operations, sales and marketing and full condominium rental program of The Bel Air Resort & Spa, Panwa, Phuket.

HCL acquired Bel Air Panwa Resort including the management rights to the rental program and the juristic condominium management from the Watson Property Group, one of Perth’s largest privately owned land subdivision companies.

Mr. Roy E. Olsson, President and Chief Executive Officer of HotelCorp said, “The Bel Air Resort & Spa, Panwa, Phuket has an amazing potential to be refurbished and redeveloped as Phuket’s new and upscale family resort destination.

The Panwa beach is now recognized as the latest and newest elite beach community in Phuket. HCL will redevelop The Bel Air Resort & Spa, Panwa, Phuket as an ideal family retreat and a spectacular tropical cliff side property featuring stunning & spaciously appointed luxury suites in the quieter side of the renowned island of Phuket.”

Situated on the Cape of Panwa, The Bel Air Resort & Spa offers luxury sea view suites featuring panoramic views across the sea towards Koh Phi Phi and beyond.

The resort is also only 45 minutes drive from Phuket's international Airport making it an easy and convenient location for all.

The Suites at The Bel Air Resort & Spa, Panwa, Phuket offers a minimum of 106 sqm living space per suite. Each of the suites provides the finest in modern amenities such as flat screen TV's with DVD players, personalized kitchen and private on-call butler service. The two and three-bedroom suites are well appointed and designed in Asian contemporary and chic fashion incorporating an open balcony with spectacular sea or garden views. These suites also provide private and direct pool access at the edge of the balcony while some suites feature their very own private plunge pool.

Mr. Bernhard Ollmann, Director and COO of HotelCorp said, “A new team will be installed to manage the resort into a truly unique and premier family resort in Phuket. Much attention is given to renewing the food and beverage experience, expanding the Kids club and the redevelopment of the beach club into a premier place to be.”

A wide variety of dining choices are offered at The Bel Air Resort & Spa, Panwa, Phuket. Giovanni's Restaurant offers International cuisine and wines, as well as excellent seafood and Thai dishes.

At day’s end, guests can enjoy an icy cold beer or an exotic cocktail served at Panwa Bar & Lounge. Perfect for pre dinner drinks whilst eating at Giovanni's, the Panwa Bar & Lounge offers a relaxed and intimate atmosphere for guests who want to spend time away from the kids.

An informal open-air restaurant with an outdoor terrace seating area overlooking the main pool is the Panwa Poolside Bar. It serves a selection of Thai and Western specialties daily, as well as a vast kid's selection with tempting theme buffets on selected evenings. A-la-carte menu is available for all day dining. The Panwa Poolside Bar will soon feature an extended roof cover for the area and will launch an all new food experience with creative theme nights and live entertainment.

The existing Kids Club will be upgraded into a new Kids World with different sections for different ages, offering play stations, internet café, movie rooms, juice bar, indoor and outdoor games, all in a supervised and spacious setting.

At the Royal Spa, the timeless art of inspiring health and inner well-being has been perfected. Treatments combine herbal remedies and century-old traditions.

For guests who love the beach, The Bel Air Resort & Spa, Panwa, Phuket has its very own Beach Club located only 1.4 km's from the resort, approximately 3 minutes by free shuttle bus.

The Beach Club provides lounges with side tables and umbrellas to enjoy the sun, sea and sand in complete relaxation. Guests can snorkel, swim or feed fish in this beautiful part of the island nestled away in a safe and secluded bay amidst gently swaying coconut palms and Tamarind Trees.

Thai and seafood dishes are on offer at the Beach Club as well as pub grub. The Resort Beach shuttle runs every 30 minutes from the resort to the beach.

The Beach Club will be extensively renovated into a premier hot spot in Phuket with a touch of trendy design, cool music and brand new kitchen.

Promotional rates are being offered from THB 2,800 per night for a 2-bedroom Suite, including breakfast and round-trip transfer to and from Phuket International Airport until October 31, 2009.

Source: Asia Travel Tips 7 May 2009

Thailand's Tonson Property plans property push

2009-05-07T07:04:00.000-07:00

The development and investment arm of the Ratanarak family, Tonson Property, plans to invest an average of Bt500 million a year in property projects - including hotels, resorts and office buildings - after the launch of a Bt780-million luxury condominium project this year. The Ratanarak family holds a major stake in Bank of Ayudhya.

Tonson managing director Kanis Saengchote said yesterday, after introducing its first luxury condominium project - the Sathu Residences-Bangkok - that the company's business strategy would be as both property developer and investor, setting aside an average investment budget of Bt500 million a year for commercial building.

Investment funding will come from both company capital and property funds, and the company is negotiating with French, UK and Middle Eastern investors.

The investment target will be both domestic and overseas assets, whose recorded price has dropped since better economic times, he said.

"When we decide to invest, we expect a return on investment of at least 10 per cent," he said.

For developing projects, the company has undeveloped land of about five rai for its first project, the Sathu Residences-Bangkok, on Rama III.

The company will develop other projects in this location after selling out these units, mostly by the end of this year. Forty per cent of the Bt780-million project has been sold so far.

The Sathu Residences-Bangkok has only 22 units, with a starting price of Bt120,000 per square metre, or about Bt32.4 million per unit, and average utilisation space of 270 square metres per room.

The main customer target for the Sathu Residences-Bangkok is domestic buyers shifting savings from the bank to the property sector. Most buy the luxury condos for cash. Some customers have asked the company to find tenants for their units.

The company offers a guaranteed yield averaging 3 per cent within two years for customers wanting to buy and rent out their units, Kanis said.

Sathu Residences-Bangkok is now under construction, with completion scheduled for November.

The company expects to transfer to its customers 75 per cent of the 22 units by the end of the year and the remainder in 2010, generating revenue of Bt585 million and covering the investment cost of Bt550 million. More than a half of its investment cost came from the company's cash flow and capital, and Bt200 million as a project loan from Thanachart Bank.

Tonson Group holds a 98-per-cent stake in the Tonson Property's registered capital of Bt100 million. The Ratanarak family holds all of the shares in Tonson Group.

Source: The Nation 7 May 2009

Property prices in Thailand's neighbouring country fall more than one-third, say realtors

2009-05-07T02:42:00.000-07:00

Picture (left) a "for sale" sign hangs in Phnom Penh on Tuesday. Real estate prices continue to fall, even after double-digit declines in last part of 2008, but dealers expect recovery to begin later this year

Real estate agents reported that property lost nearly one-third of its value at the start of 2009 as the global economic slowdown takes its toll on Cambodia’s economy.

CAMBODIA'S real estate market lost more than a third of its value in the first three months of 2009 compared with the same period last year, due to the impact of the global financial crisis, say real estate developers.

"According to our research, the real estate market dropped 40 percent in the first three months in 2009 if we compare the situation to the first three months in 2008," said Sung Bonna, CEO of Bonna Realty Group and president of the National Valuers' Association of Cambodia.

He said that land in Boeung Keng Kang I commune, worth between US$2,500 and $2,800 per square metre during the first quarter of 2008, had fallen to between $1,600 and $2,000 in the same period this year.

World financial instabilities were the main cause of the decline, he said, but added that the sector should recover by 2011.
"I think that property will regain its value when the world economy recovers," Sung Bonna said.

Varied impact in the region

But the global crisis has had uneven effects, he said, with Vietnam having largely avoided a devaluation, while Thailand had experienced a contraction in the sector due to the economic crisis and the effects of domestic political instability.

Local developers echoed Sung Bonna's outlook, saying development projects conceived during the real-estate boom had been undermined by a widespread contraction in local markets.

Leav Vanny, project manager of Kaing Meng City, said property will regain its value when the world economy recovers.

$30 million housing development project in Kandal province's Takhmao district, said Monday that even though construction was under way, the company had had difficulty attracting clients, having experienced a "50 to 60 percent" drop in business compared to the same time last year.

"Our project is still up and running, but we cannot find clients," he said.

"Wealthy Cambodian people are still afraid [and] are hesitant to buy property. They are waiting for things to recover too." Kong Vannsophy, general manager of Dream Town City, a $1-million project in Phnom Penh's Dangkor district, agreed the property sector was not in good shape, and that the market for both buyers and sellers was quiet.

"Our project is continuing, but there is not the rush we experienced before 2007," he said, adding that falling rental services currently made leasing a better option than acquiring property.

Chhean Dara, project manager of the $50-million Happiness City housing project in Russei Keo district, said the financial crisis had led to a precipitous drop in customer interest for the project. "The project is moving along very slowly.

"Public interest dropped 70 percent when the world's credit crisis hit, and our new villas are now for sale but no one is interested," he said.

Chhan Dara added he has even had difficulty selling off 20-hectare plots of empty land in Kampong Speu province, which have fallen from between $20,000 to $30,000 per plot to around $10,000-$15,000.

"No one is asking to buy my lots in Kampong Speu," he said. "I have to pay back my loans to the bank every month [so] I hope the real estate sector recovers soon."

However, the Kingdom's top construction official said a slowdown in the construction sector in the second half of last year was a temporary blip induced by the global financial crisis and that he expects to see rapid growth to resume by the end of 2009.

Im Chhun Lim, Minister of Land Management, Urban Planning and Construction told the Post last month that there were signs the sector was already rebounding after a number of high-profile developments were slowed, cancelled or put on hold towards the end of last year, resulting in mass layoffs across the sector.

Source: The Phnom Penh Post 7 May 2009

My friend is my enemy in Thailand

2009-05-06T06:13:00.000-07:00

This is a good read by one of Bangkok's best foreign journalist, Shawn W Crispin. The article explains in-depth of the political situation which in turns affect the economy and ultimately the property sector albeit for the short to medium term.

Once-coherent forces are fragmenting in Thailand, promising to complicate standing political alliances while disintegrating others. As Prime Minister Abhisit Vejjajiva strikes new conciliatory poses - including possible constitutional reforms and an amnesty for more than 100 banned politicians - the emerging realignment could ignite potent new sources of instability and foil his government's strategy to shore up its democratic mandate at new polls next year.

Officials and analysts are still weighing the significance of last month's violent anti-government street protests and the military's crackdown, which pitted forces aligned to exiled former prime minister Thaksin Shinawatra against Abhisit's coalition government and its presumed backers in the military, bureaucracy and royal Privy Council. Those clashes and the subsequent assassination attempt of an anti-Thaksin protest leader have opened new political fissures that have the potential to spark more upheaval and violence.

The main wildcard, the red-shirted United Front for Democracy Against Dictatorship (UDD) protest group, has fractured at the top after last month's crackdown and temporary detainment of its main leaders, according to a second-line UDD leader. Different co-leaders have in recent weeks forwarded divergent strategies for future resistance, with some promoting new mass protests while others have advocated a more radical move towards armed struggle.

Diplomats familiar with the situation say that UDD co-leader Veera Musikapong was instrumental in steering the situation away from a violent crescendo on April 13 when he agreed to disperse the remaining 3,000 protestors after the military had encircled the UDD's main protest site at Government House in Bangkok. The same diplomats claim that certain UDD protesters on the site's perimeter were that day armed with homemade explosive devices, or ping pong bombs, which if launched could have easily escalated the situation towards retaliatory violence.

While UDD co-leaders Veera, Jatuporn Prompan, Weng Tojirakarn and Nattawut Saikuae have all called for new peaceful protests, analysts suggest that Thaksin is now looking for a new UDD leadership. Thaksin's close aides and former Communist Party of Thailand members Prommin Lertsuridej and Phumtham Wechayachai were floated in recent media reports as possible candidates. If so, the UDD would appear to be splitting into two distinct groups, with those favoring peaceful protests less aligned to Thaksin and those calling for armed struggle more clearly in the exiled former premier's inner circle.

One diplomat suggests that while the UDD lost the battle, by mobilizing 100,000 protesters on April 8 it successfully advanced a rallying call against entrenched inequality and injustice in Thai society. The question, he suggests, will be whether the protest movement can break away from Thaksin's funds and symbolism and become a positive force for political reform, or instead intensify its destabilizing course of disruption and violence aimed solely at toppling Abhisit's government and restoring Thaksin's power.

Exiled motivations

Thaksin's lurch towards brinksmanship was at least partially motivated by the breakdown in secret negotiations that had been mediated from behind the scenes by a European interlocutor. Those talks, which included elements of the military and monarchy, according to a Thaksin ally familiar with the situation, aimed to return Thaksin's US$2.2 billion in frozen funds in exchange for a vow he would not re-enter politics.

In an apparent bid to re-establish his diminished negotiating leverage, he has publicly accused certain privy councilors of orchestrating the 2006 coup and recently alleged in an interview with the Financial Times that King Bhumibol Adulyadej had foreknowledge of the putsch. Before that, Thaksin is also known to have lost touch with Crown Prince Maha Vajiralongkorn, reaffirming the notion that neither is the monarchy a static institution with its relationships.

According to diplomats and a well-placed palace source, Thaksin had on several occasions after returning from exile in 2008 met with Vajiralongkorn in Bangkok via his trusted associate, Sino Thai Engineering and Construction Company chairman Anutin Charnvirakul. The two had also met on at least two separate occasions when Thaksin was in exile in London after the 2006 coup and Vajiralongkorn spent nine months of calendar 2007 in Europe.

It was lost on few seasoned observers that the UDD's April 12 assault on Prime Minister's Office secretary general Nipon Prompan's car at the Ministry of Interior had particular symbolic value because of the senior bureaucrat's known close ties to Vajiralongkorn, including formative years together at a European boarding school.

Some diplomats have interpreted that assault and the UDD's public criticisms of top privy councilors as a strong signal that Thaksin and his allies could complicate the impending royal succession, where Vajiralongkorn is the heir apparent to the throne. At the same time, many believe Thaksin may have overstepped the mark by mentioning the widely revered 81-year-old Bhumibol in recent political remarks to the foreign media.

Meanwhile, the April 17 assassination attempt against media mogul and People's Alliance for Democracy (PAD) protest group leader Sondhi Limthongkul could result in a more dramatic break of previously presumed aligned political forces. Sondhi has publicly accused military officials with links to Thaksin of masterminding the failed attack, which was launched by assault rifle-toting assassins.

Sondhi told this correspondent while in hospital that he believed army commander General Anupong Paochinda, army chief of staff General Prayuth Chan-ocha and Defense Minister General Prawit Wongsuwan were bent on seizing political power from Abhisit. Anupong has denied any foreknowledge or involvement in the plot on Sondhi, though he has acknowledged that bullet shells found at the crime scene were Thai army issue.

Sondhi has criticized the same military officials in recent press interviews and in an apparent shift suggested that the PAD's "new politics" reform agenda is in some ways similar to the political change advocated by the UDD. PAD street protests paved the way for the 2006 military coup that ousted Thaksin's government and the movement was notably dormant during the military appointed administration that ruled in 2006 and 2007.

A second incarnation of the PAD last year paralyzed the workings of two Thaksin-aligned governments, which eventually fell through controversial court decisions, including a December 2 ruling that disbanded the then ruling People's Power Party. Sondhi cloaked his yellow-shirted protest movement in royal symbolism and first drew crowds in late 2005 by accusing then prime minister Thaksin of disloyalty to the Thai crown - charges Thaksin has denied.

Loyal royals

By taking hard aim at Anupong and Prayuth, both established royalists who served in Queen Sirikit's Royal Guard Infantry Regiment, diplomats and analysts wonder whether Sondhi will continue to mobilize defense-of-the-monarchy themes at any future protests, including ones that potentially target top military officials or royal advisors.

Sondhi's Thai language daily newspaper openly supported the candidacy of former 3rd army division commander General Saprang Kalayanamitr over Anupong in the run-up to the 2007 military reshuffle that eventually elevated Anupong to the army's top spot. Anupong has since consolidated his power over important command positions, but has faced criticism from certain hardline military elements, and echoed by Sondhi, that he has failed to effectively purge Thaksin's lingering influence.

Sondhi stirred a hornet's nest last year when, from his protest stage, he accused Anupong of receiving money from Thaksin to pay for his children's school fees. He did the same over the weekend when he alleged that palace insider Viriya Chavakul, who has publicly defended Thaksin's loyalty to the crown, played a role in the assassination plot against Sondhi. She strongly denied the charges and the palace quickly moved to correct press reports that referred to Viriya as Queen Sirikit's lady-in-waiting.

Questions also surround the apparent fall from favor of top royal advisor and Sondhi ally Piya Malakul, who according to one royal insider hasn't attended functions at the palace for over a month. Piya is known to be close to Queen Sirikit and was often the lone advisor to accompany Bhumibol when he previously took outdoor walks around his seaside palace in Hua Hin.

One palace insider says that Piya was the top advisor who suggested that Queen Sirikit attend the funeral services of a PAD protester killed during a melee with police last October 7, indicating to some tacit royal backing for the PAD. Piya was also accused by Thaksin of playing host to a dinner at his residence in May 2006 where the coup against his government was allegedly planned. Piya has strongly denied the charges, claiming no military officials were present at the meeting.

The PAD has already indicated it will launch new street protests against any constitutional reforms that lead to an amnesty of the 110 politicians - with the notable exception of the criminally charged Thaksin - banned from politics for five years by a military appointed Constitution Tribunal in May 2007. The risk for Abhisit and the Democrats is that the PAD lumps together their coalition government with the military, as UDD leaders had from their protest stage.

Military matters

That could be an easier argument to make after Abhisit's declaration of a state of emergency and the military's willingness under Anupong to mop up the UDD after refusing to implement similar decrees announced last year under two separate Thaksin-aligned governments. The breakdown of Abhisit's personal security detail showed clearly that his government lacks command control over key sections of the national police force.

Thaksin was a former police official and is believed to still hold sway over certain senior officers. Many junior-level police officials attended UDD rallies while off duty, with some even changing into their red shirts while still at their respective police stations, according to a source familiar with the situation. That's raised concerns in certain government circles that Thaksin supporters' call to arms is no idle threat.

Government spokesman Panitan Wattanayakorn said that the premier's inner circle now viewed the UDD's attack on Abhisit's car on April 12 at the Ministry of Interior as a well-coordinated assassination attempt. He says a review of wide-angle security film of the incident shows that men with masks and guns were positioned on the perimeter of the attack, apparently waiting for frontline protesters to break through the car's bulletproof windows.

With police neutrality in doubt, army chief of staff Prayuth has taken charge of Abhisit's personal security and his top aides have been appointed bodyguards. Some diplomats here believe that Prayuth's role in the efficient suppression of the UDD riots may have saved Abhisit's government, which was teetering after UDD protesters stormed the venue of an Association of Southeast Asian Nations (ASEAN) summit meeting with world leaders in attendance.

The military has over Abhisit's five-month tenure sometimes marched to its own drummer, though by most reports it stepped in line when he declared a state of emergency and insisted the crackdown would result in no casualties. Military insiders say the top brass are wholly cognizant of how unpopular another coup would be and prefer the political status quo as long as their budgets keep flowing and a conflict in the south involving Muslim insurgents is left under the military and not moved to civilian command.

Panitan says that while the military's budget has risen substantially since the 2006 coup, overall outlays are still only 1.8% of gross domestic product, well below the global average for maintaining a modern fighting force of 300,000 men. Panitan, a former professor of security affairs who has trained several senior ranking military officers, has according to diplomats emerged as one of Abhisit's main point men in liaising with the military and deciphering its moves and motivations.

New trajectory
What's clear is that the UDD's unexpected show of force has put Thai politics on a new trajectory. The ruling Democrats are now widely expected to dissolve parliament and call for new elections by early to mid-2010, coinciding with a forecast up-tick in the economy, which is now set to contract by 5% this year.

One Democrat party deputy leader suggests the government is already starting to plot vote-getting strategies for new polls, including possible plans to redistribute land designated as national parks to over 2.2 million villagers who still hold title deeds, and another to grant Thai citizenship to over 2 million people in limbo situated in border areas.

The Democrats also clearly hope to capitalize on a newfound populism, including a 2,000-baht (US$57) handout scheme for over 11 million low-income earners around the country. Ramped up fiscal spending designated to cushion the blow of the global economic crisis started disbursements last month and politicians of coalition partner Bhum Jai Thai party are expected to be major beneficiaries through the ministries they control.

The Bhum Jai Thai party's behind-the-scenes leader, Newin Chidchob, is now allegedly bidding to place his political associates onto the board of state-run and now loss-making Thai Airways, according to people familiar with the situation. Any number of those policies could open the coalition to damaging corruption allegations lodged by the Thaksin-aligned opposition Peua Thai party, similar to the land reform scandal that eventually brought down a Democrat-led government in 1994.

One diplomat read the Ministry of Finance's recent announcement to cut 200 billion baht from the 2010 budget because of revenue shortfalls also as a political strategy to keep Bhum Jai Thai at bay and on side until new polls are held, with a wink that bigger-ticket infrastructure projects would be initiated by a newly elected government. That avowed big spending could be enough to lure several Peua Thai politicians to defect to Bhum Jai Thai, as several were reportedly poised to do before the UDD ramped up its protests.

That's exactly the sort of old-fashioned politicking both the UDD and PAD say they stand firmly against and could provide fodder for more destabilizing demonstrations in the months ahead. But if Abhisit successfully oversees constitutional reforms and a mass amnesty, which with shifting political allegiances could benefit his coalition as much as the Thaksin-aligned Peua Thai, those fractured street movements may yet represent the fringe of an emerging new political order.

Source: Asia Times Online 6 May 2009

Thai property sector will be adversely affected by the global crisis due to falling demand and strict housingloan policies, Bank of Thailand

2009-05-06T05:54:00.000-07:00

The study said the global recession would reduce consumers' purchasing power and erode confidence, while commercial banks tighten their homeloan policies.

This will lead to many consumers postponing their decision to buy. Moreover, developers will delay their investment in projects.

Since the 1997 financial crisis, the realestate sector has improved gradually in keeping with the economic recovery, backed by lower interest rates and high expansion of housing loans.

The industry has played a crucial role for the economy due to the high value of assets for the household sector. Moreover, most people in the household sector must rely on loans to buy assets.

BOT executive Duangporn Rodpengsangkaha and her team found in their study that volatility in the price of housing depended on the peculiarity of the market, particularly interest rates, and supply.

Housing prices will be particularly volatile in places such as the United Kingdom, Hong Kong, Singapore and South Korea, where supply is slow in adjusting. Also, they use adjustablerate mortgages.

Volatility in the price of housing has a significant impact on economic stability. Past experience have shown that a bubble in the housing market has led to an economic crisis in both developed and developing countries.

The impact will be huge in countries where the ratio of people's ownership of houses is large compared to other assets, especially when housing prices fall sharply, the BOT said.

Moreover, the risk has increased since the housing market has become more relevant to the financial markets and financial innovation. This was revealed by the US subprime market fiasco, which has had a widespread impact on the world.

Housing prices in each country have different levels of volatility, depending on the economic cycle and the peculiarities of the market, the study found.

Moreover, monetary policy has an impact on housing prices in countries with adjustablerate mortgages, a highly developed housing market and nonrestrictive regulation of the industry.

"There is a lot of debate on using monetary policy to take care of the price of housing. It is difficult to do that in many countries if the economic cycle and housingprice cycle are not relevant, such as in the United States, Italy, Spain and Taiwan," said the study.

Source: The Nation 6 May 2009

Raimon Land - Thailand property developer considers price reductions

2009-05-06T04:22:00.000-07:00

Cost decline makes new projects cheaper

Raimon Land Plc is considering reducing prices of new housing projects scheduled to be launched this year due to falling construction costs, according to chief operating officer Kitti Tungsriwong.

"We are reviewing construction costs to adjust selling prices of new projects," he said. The new projects include 185 Rajdamri, a super-luxury freehold condominium on Ratchadamri Road. Raimon paid 1.4 billion baht for the plot early last year.

The developer would lower its starting prices for 185 Rajdamri below 200,000 baht per square metre, down from the 240,000 to 300,000 baht publicised last year, Mr Kitti said.

Samma Kitsin, the director of the Real Estate Information Center, said the steel price index had dropped by 47% to 164.1 points in March, from its July 2008 peak of 309.9. At the same time, the price of gasohol 95 had fallen by 33% to 26 baht per litre.

Raimon is also adjusting its plan for The Amalfi, a 15-villa project located on a 43-rai plot worth 500-600 million baht between Surin and Bang Tao beaches in Phuket. New selling prices for villas at Amalfi would be lower than 250 million baht each, he added.

Also likely to be revised are prices at The Edge, a high-rise condominium on a five-rai beachfront plot on Wong Amat Beach in Pattaya, where Raimon spent 300-400 million baht on land. Based on its earlier plan, the condominium would have a total saleable area of 30,450 sq m, comprising 274 units with selling prices of 156,000 baht per sq m on average.

"We admit that the global crisis has had a great impact on foreign buyers. We keep monitoring the situation," Mr Kitti said at an annual shareholders' meeting last week. "Some foreign buyers have cancelled bookings but we think the Thailand property market has seen less impact than other markets such as Dubai where there are zero sales."

Though sales rates at some existing Raimon projects such as The River have slowed, it expects a pickup by the end of the year when the seventh and eighth floors are built, which would increase buyers' confidence. Sub-structure construction is now 90% complete.

However, the company needs more loans to complete construction of existing projects and expand new ones.

Shareholders last week approved the company's plan to enter into two transactions including a short-term loan from its major shareholder, Dubai-based IFA Hotels & Resorts 3 Limited, for up to US$10 million or 359 million baht with a maximum annual interest rate of 10%.

Also approved was the amendment of an existing loan of 356.61 million baht from IFA Hotels & Resorts 3 Ltd, which included a reduction of the annual interest rate to a maximum of 10% from 15%.

Chairman Sompoch Intranukul said the first loan was not sufficient and funding from other financial sources now was very limited so the company needed more funds from IFA. At the same time, short-term financial support would help expand current projects and future business.

"Seeking loans from IFA, our major shareholder, is faster than getting them from other financial sources," he said. "This channel is also more flexible and the contract easier to revise. It needs no pledge. If we ask for loans from financial institutions, we need to pay front-end fees, repay them monthly and face penalties if we repay [early]."

Source: Bangkok Post 6 May 2009

Investors rage as 'Joe Cole' holiday Thailand property firm goes bust

2009-05-06T04:06:00.000-07:00

England footballer Joe Cole is at the centre of a bitter property row after a luxury apartment complex he promoted was NEVER even built.

And furious investors, who ploughed more than £1million into Thailand's Hua Hin Country Club on hearing Cole was to be its first celebrity resident, are now demanding their money back.

The Chelsea ace appeared in promotional literature, on posters and Thai TV in June 2007.

He even met some of the potential investors for the project that included penthouse apartments, a pool and 18-hole golf course.

But almost two years after the project was launched, not a single brick has been laid - because the firm appears to have gone bust.

A source who worked on the project said: "At present, it's just an empty field. A lot of people have been misled." And Julie Young, 50, from Skegness, Lincs, who invested £54,000, said: "The pictures on the website show a building site with the shell of an apartment block.

It looks like the project is well on its way - but it's a complete lie." The country club was a £6million venture of the Lersuang Group, a Thai property developer with offices in Bangkok and Phuket. To attract buyers, Lersuang reps approached Cole, who is a shrewd property investor.

They spoke with Cole's property agent Ross Taylor, who brokered a deal by which the star would promote it allegedly in return for a penthouse apartment worth £250,000.

And in an interview for the club's website, Cole, 27, told potential buyers: "I'm 100 per cent sure I've made the right decision." But for the 30 or so investors who followed Cole's advice, things have fallen apart.

German buyer Carmen Blomenthal, who paid out £10,000, said: "Joe Cole trusted this company, so I was inclined to trust them." She added: "My lawyer found out that Lersuang declared bankruptcy in August 2008. I'm doubtful I will get my money back." Mr Taylor said he believed "a Thai businessman was working on a rescue plan".

But despite leaving messages, the Mirror could not get a response from Lersuang.

Yesterday, a spokesman for Cole said: "Joe is upset to learn that people have lost out financially. He invested in good faith."

Source: Mirror.uk.co 5 May 2009

Foreigners shun new Thailand property

2009-05-04T21:02:00.001-07:00

New investment in Thailand this year will come mainly from local investors as foreigners might focus on their current holdings and on their home countries, according to the international real estate firm Jones Lang LaSalle (JLL).

"With the political turmoil affecting our top investment-attracting tourism industry, we don't expect to see foreign investors to be back in the next couple of quarters," said Umpon Thepnumsommanus, JLL's director of investments.

He predicted that in the second half of 2009, giant developers would continue buying land. "It's a good opportunity for strong developers to continue expanding. Although there is less demand for residential projects, there also are fewer competitors," Mr Umpon said.

JLL forecasts that net demand for office space in Bangkok this year will drop by 10-15 percent, but there will be no sharp drop in rental rates due to limited new supply.

Source: TradingMarkets.com 30 April 2009

The global downturn is forecast to cause demand to shrink to 70,000-80,000 square metres, a much smaller contraction than in 2008 when demand sank by 25 percent to 90,000 sq m from 120,000 sq m the previous year.

Dan Tantisunthorn, head of research at JLL, sees many negative factors for the office market this year with companies saving costs by downsizing space.

But he believes the drop will be offset by new demand as some companies expand their investment to strengthen their market position in the crisis. He said the only contraction in office use was in 1998, during the last major crisis, when 56 financial institutions closed.

"We don't see a collapse in rents under these circumstances," he said.

Average monthly rental for grade A office space fell slightly to 662 baht per square metre at the end of the first quarter from 671 baht at the end of 2008.

Suphin Mechuchep, JLL's managing director, said new office supply entering the market was not large enough to affect rental prices.

"In the past three to four years, many property developers had turned to invest in condominiums rather than office buildings which slowed the growth in office supply. It's a tenants' market this year," she said.

At the end of 2008, there were 7.71 million square metres of office rental space in Bangkok, 86 percent of which were occupied. New rentable areas this year will total 216,000 sq m.

About 400,000 sq m of new supply, a 5 percent increase in space, are expected to enter the market in the next four years.

Bangkok office rents to fall 10% in 2009

2009-05-03T00:09:00.000-07:00

Picture (left): Chamchuri Square’s biggest coup was securing a deal with DTAC for 61,500 square metres.

Bangkok office rents and occupancy rates will contract by 10% in 2009 due to decreasing demand, new supply and major tenant relocations, says the property consultancy Colliers International Thailand.

The global recession affected Bangkok's office market in the last quarter of 2008, dampening what had otherwise been a strong year, said the firm's head of research, Risinee Sarikaputra.

Many companies that had previously scheduled office expansions cancelled their plans, with some downsizing or relocating instead.

"Tenants at some office buildings have united to press for lower rentals at renewal, and they have achieved up to a 10% reduction," she said.

"It's a tenants' market. They have higher bargaining power, while office landlords need to get existing tenants to stay by lowering rents."

Occupancy rates have fallen fastest in Grade A offices in the central business district (CBD), which have dropped to 80%, down from 89% at the end of last year. This was largely due to cost-cutting from tenants, especially multinational companies.

Grade B office space in the CBD is expected to fall by 5-6% this years, as the sector will absorb many of the relocations from Grade A offices.

The average Grade A rent is 700 baht per square metre, with Grade B fetching 590 baht.

Many firms have relocated from Grade A to Grade B properties, or to other locations with lower rents.

While some securities firms upgraded their offices, large corporations in other sectors, such as automotive and exports, have downsized to control costs, Ms Risinee said.

The Silom area had the biggest outflow of tenants, many of whom complained about high rents, run-down offices, and congested traffic.

Some tenants moved to serviced offices with higher rents so they could assess the situation before moving to a more permanent location, she said.

Government agencies have started to relocate to the new government centre on Chaeng Watthana since early this year. This has a significant impact on Bangkok office space, which now totals 7.76 million sq m, with 90% occupancy.

According to Colliers' research, new office supply in the pipeline scheduled for completion in 2009 amounts to 849,762 sq m, with 470,000 sq m at the new government centre.

Government agencies will vacate around 100,310 sq m of space in commercial buildings. The biggest tenant to move is the Office of the Election Commission, which will leave the Srijulasarp Building on Rama I Road for a new 48,330 sq m space at the new government centre.

The Office of the Ombudsman moved from the Exim Bank Building on Phahon Yothin road for a new 11,790 sq m space. The Central Bankruptcy Court will shift from the Bangkok Insurance building on Sathon Road to its new 9,280 sq m location.

The biggest office transaction in the fourth quarter of last year was the DTAC move to a space covering 61,500 sq m at Chamchuri Square, followed by ACE INA Overseas Insurance new 9,600 sq m location at at Interchange 21. Tilleke & Gibbins took up 8,500 sq m at Supalai Grand Tower. Tisco Bank occupied 5,000 sq m at Pakin Tower. And Deutsche Bank moved to a 4,000 sq m office at Athe'ne'e Tower.

The annual net take-up of office space has declined since 2004, decreasing by an annual average of 10%.

However, rent and occupancy rates are expected to pick up by 2-3% in 2010 due to a limited new supply of only 70,000 sq m coming online at Sathon Square, which is developed by Golden Land Property.

The twin effects of the global economic recession and political instability in Thailand will slow the overall office market.

While relocation costs deter many tenants from moving, increasing numbers are expected to push for lower rentals at renewal. New projects are already offering substantial discounts of 10-15% to secure major tenants and ensure occupancy rates.

Grade A office rents in the inner CBD ranged from 580-750 baht per sq m at the end of 2008, with a current average of 700 baht. Grade B offices in the inner CBD ranged from 300-700 baht but the average is now 590 baht.

Source: Bangkok Post 23 April 2009

Thailand property sales could dip 10 per cent in 2009

2009-05-01T03:44:00.000-07:00

Political chaos and low interest among foreigners takes a toll

The Thai property market will see sales decline by more than 10 per cent this year as the political uncertainty takes its toll on the already battered economy, property experts said.

Thai Condominium Association president Atip Bichanond said the dire outlook for the country's 2009 GDP, which the government now forecasts will contract by between 5 and 6 per cent - compared to a projected decline of 3 per cent before the latest flare-up in the political conflict - would have a negative impact on the property market.

"We believe the property market in Bangkok and its suburbs will decline by more than 10 per cent this year compared with last year. Home-buyers are concerned about future earnings, with the country's GDP expected to decline by more than 6 per cent," he said.

Atip added that the condominium market will be worse-hit than the low-rise residence market, which includes detached houses, double houses and townhouses, because demand among foreign buyers - the main target market for condominium projects - has dropped significantly due to both the global recession and the local political turmoil.

"We suggest property developers revise their business plans and exercise caution when selecting locations for their residential projects, and that they carefully manage their cash. This will help them survive the crisis," he said.

The association had earlier estimated the property market would stay flat or grow by 5 per cent this year in the wake of the government's decision to extend property-tax incentives.

Meanwhile, international property agency Knight Frank Charter (Thailand) has postponed its home show, Taste of Living, originally scheduled for April 22 to May 3 on Siam Paragon's M Floor, until October. The company's managing director, Phanom Kanjanathiemthao, said the show had been delayed because of concerns that the political turmoil would dampen demand among home-buyers.

"Based on my experience, home-buyers will likely delay decisions on whether to buy until two or three months after the easing of the political crisis. Siam Paragon was booked solid in two to three months time, so we had to postpone the expo till October," he said.

Real Estate Information Centre (REIC) director-general Samma Kitsin acknowledged that political strife this Songkran had hurt the property market, which he said would decline by as much as 10 per cent this year, compared to the centre's earlier prediction that the market would be flat or even grow by nearly 5 per cent.

The property market faced the twin burdens of the US sub-prime mortgage crisis and the domestic political problems, he said.

Since the emergence of the sub-prime crisis, property firms developing residential projects for foreign buyers had seen demand for residences in Thailand among foreigners drop more than 50 per cent, he said.

The domestic property market took a big hit from the Songkran political chaos. The residential market in Bangkok and its suburbs is expected to decline by more than 10 per cent from 82,000 units last year to between 72,000 and 73,000 units this year, he said.

Thai Real Estate Association president Somchao Tanterdtham said property developers would need to slash their investment budgets. Those planning to launch new residential projects will have to think carefully about the locations, and research their target clientele carefully, he said.

Demand for residences priced below Bt1.5 million per unit will take the biggest hit from the economic slump, while demand for projects priced between Bt2 million and Bt5 million may hold steady, depending on location and other details of the particular project, he said.

Source: The Nation 20 April 2009

Thailand's real estate marketing takes a new direction

2009-05-01T03:35:00.001-07:00

Direct marketing strategies and promotional incentives are becoming increasingly popular as developers attempt to reel in buyers while minimising cost and maximising exposure.

Sellers are ready to woo buyers with incentives such as ‘two bedrooms for the price of one’, ‘try before you buy’, and even free cars and holidays.

It’s all about minimising cost and maximising exposure, according to Apisit Limlongwonse, managing director of Nexus property consultants.

“There has been an increase in [marketing] offers in the past two months because buyers still don’t feel motivated to buy and it’s panic time [for the developers],” said Apisit.

Companies such as Asian Property Development, Preuksa Real Estate and MK Real Estate Development are all reducing their marketing expenditure to no more than three to five percent of their total expenditure, and are switching to direct campaigns such as event marketing and mail-outs, according to a recent survey by a national newspaper.

Many developers are now offering properties fully furnished at no additional cost, says Apisit. “Normally, properties come just partly fitted, but certain apartments are offering fully furnished deals, right down to kitchen appliances.”

While some of these incentives are ‘old’ news, the creativity and size of the incentives have seen a significant increase over the past couple of months.

One of the most popular promotions, according to Apisit, is allowing prospective buyers to ‘try out’ units. “If the units are completed, buyers can stay in them for a few months to determine whether or not they like the place, and, if they do, they start paying. It’s three months living for free and there is no obligation to buy.”

While a stall at an annual real estate show is an ‘old’ tool, companies such as Nexus and Knight Frank have taken this initiative a step further by launching a series of events to be held at various shopping centres and other busy spots around the capital.

“We’re bringing the options directly to [the buyers]. The idea is that throughout this year there will be potential buyers, but who won’t be going to sales offices, because of time constraints and a lot of the properties on offer were launched a couple of years ago. This way people can connect with what’s happening in the market, make good comparisons quickly and find the overall process less time consuming.”

Nexus Innovative Living 2009 will initially host seven shows presenting 14 developments, at popular shopping centres in Bangkok. Each centre has upwards of 100,000 visitors a day.

Source: Asia Property Report 24 April 2009

Thailand's Hemaraj sees big drop in industrial land sales

2009-04-30T04:46:00.000-07:00

Customers this year mainly smaller firms

Hemaraj Land and Development Plc (HEMRAJ), Thailand's largest private industrial land developer, expects its 2009 land sales to slump by two-thirds of last year's figure, says president and CEO David Nardone.

Hemaraj sold 1,621 rai of industrial land in 2008, but this year the company is targeting only 500 rai, because of the global downturn's impact on investment and industrial land demand.

Last year's land sales figure was a record for Hemaraj, as large companies in several industries sought to expand capacity to sustain their growth.

Big buyers among its 60 land sales in 2008 included Suzuki Motor Corp, Bitumen, Thai Rayon and Nippon Steel.

So far this year, though, most clients have been small-scale businesses.

''This is due mainly to large corporations preferring to move cautiously on investments due to concern about the impact of uncertainty in the global economic and local political situations,'' Mr Nardone told the company's annual shareholders' meeting yesterday.

Despite record land sales, Hemaraj's total revenue last year dropped 4% to 4.98 billion baht, down from 5.24 billion in 2007. But its net profit rose 15% to 1.34 billion baht, up from 1.16 billion.

To balance its revenue portfolio that is still largely focused on land sales, Hemaraj has invested in utility services, such as steam and power supply, as well as construction design and management at its six industrial estates.

Hemaraj entered the water supply business last year through its wholly-owned subsidiaries Hemaraj Water and Hemaraj Clean Water.

Utility revenues rose to contribute 20%, or 924 million baht, of the company's total revenue last year. An increase from 13%, or 721 million, in 2007.

Hemaraj expects to further raise its services revenue to more than 2.5 billion baht in 2011.

Its utility earnings are set to triple in 2012 after the start of operations at the 660-megawatt Gheco-One coal-fired power plant. Utility income from the plant in which Hemaraj holds 35% is expected to provide one-third of the company's revenue from then on.

Hemaraj is freezing residential project developments planned for 2009 because of a market glut and the unsettled political situation. Residential property's contribution to company revenues has slipped from 50% in 2006 to 40% in 2007, and to less than 10% last year, in line with the number of available units.

Source: Bangkok Post 30 April 2009

Problems, and Deals, in Thailand

2009-04-30T01:40:00.000-07:00

JUST how many hits can the tourism industry of Thailand take? Will the anti-government protests in Bangkok in mid-April — which escalated into two days of rioting during the traditional Thai New Year and caused the cancellation of a summit meeting of Asian nations in Pattaya — keep away the visitors who have been gradually returning since the devastating tsunami of 2004?

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The clashes, in which two people were killed and more than 100 injured, were quelled after government troops stepped in. But images of burning buses and armed soldiers in the streets of Bangkok came just four months after another group of demonstrators blockaded airports, stranding passengers for about a week. And the prospect of continued turmoil has already prompted some travelers to rethink their travel plans.

For a three-week vacation abroad, John D. Long, of Washington, had been trying to decide between a trip to Europe or a tour of Southeast Asia, using Bangkok as a hub to reach Cambodia, Vietnam and Myanmar.

“I was ready to make a reservation for either place but as I began to read about the unrest in Thailand and remembering what happened the last time the political party currently in power was in the opposition,” he said referring to the airport shutdowns, “I began to think it was more prudent for me to opt for the European trip.”

It wasn’t so much the nature of the recent strife that worried Mr. Long, but how his trip might be affected if the demonstrations were to have an impact on his travel plans. “If I get to Bangkok and can’t get out,” he said, he would never make it to places like Yangon, the former Rangoon, in Myanmar, “a major draw for that trip.”

Thailand tourism had already taken a hit from the global economic crisis. The Tourism Authority of Thailand was anticipating about 14 million international visitors this year, down from about 14.6 million in 2008. But the Bangkok riots are expected to direct an additional blow at the travel market — an estimated drop in international visitors of 20 to 30 percent for the first half this year, according to the tourism authority.

The Thai government has tried to tamp down tourist jitters. On April 21, Kasit Piromya, the foreign minister, said, “The protests in Thailand were confined to only a few, one or two spots of Bangkok,” and in the rest of the city, “99 percent was life goes on as usual.”

While the United States Embassy advised citizens to avoid areas of demonstration and “exercise caution anywhere in Bangkok” during the protests, the State Department did not issue a separate warning or travel alert for the region. It does, however, advise American citizens visiting Bangkok “to monitor events closely, to avoid any large public gatherings, and to exercise discretion when moving about” the city.

As a result, some travel companies expect visits to drop.

“There is always a short-term effect when things like this occur,” said Rod Cuthbert, founder of Viator.com, which links travelers with local tour operators for sightseeing, including 94 activities in Thailand. Though traffic to the site’s Thailand pages remained strong throughout the period of upheaval, he said, “we expect April and May bookings will be well down.”

The uncertainty about the situation in Thailand may well damage the country’s increasing reputation as a place where travelers can find affordable luxury — five-star treatment at three-star prices.

Certainly, some recent deals make Thailand seem like the place to go. Through April, the Metropolitan Bangkok, part of the high-end COMO Hotels and Resorts, offered rooms that are normally $260 a night for $99.

The Anantara Golden Triangle Resort and Spa in Northern Thailand, which has an on-site Elephant Camp, is offering three nights for the price of two, with rates from 9,200 baht a night, about $255 at 36 baht to the dollar. Travelers can get an even lower rate (7,600 baht) by booking 50 days in advance.

Its sister property Si Kao Resort and Spa, on a southern beach an hour from Krabi’s airport, is offering discounts of up to 40 percent off the usual rates of 6,000 baht and up a night, based on how far ahead travelers make their reservations (see www.anantara.com for both resorts).

On top of such deals, American travelers have about 11 percent more buying power in Thailand compared with a year ago because the baht has dropped against the dollar.

DESPITE televised images of burning buses and armed soldiers squaring off with angry protesters in the streets of Bangkok, some visitors to the city were oblivious to the state of emergency. Agneta Mallenberg, 38, an interior architect, and her friend, Agnieszka Mrugala, 37, a computer programmer, both from Warsaw, were there when the riots started.

“I didn’t know what happened in Bangkok while we were there,” said Ms. Mallenberg, while taking a break from shopping in the Jungceylon mall in Phuket. “My mum wrote me on Facebook that I’m supposed to avoid big crowds. That was the first I heard about it.”

Other vacationers in Thailand also appeared unfazed. Just days after the riots, the boisterous night-life scene in Patong, on Phuket, was still raging, its bars and street stalls thronged with people.

Friendly Planet Travel, based in Jenkintown, Pa., sent a group of 26 tourists to Thailand on April 16 for a 12-day tour from Chiang Mai to Bangkok. No one canceled.

“September 11 changed forever our way of viewing the world,” said Peggy Goldman, Friendly Planet’s president. “We have found that our travelers are much more sanguine about facing the world, even during times of instability and unrest.”

Ms. Goldman is planning to go to Bangkok herself this month.

“Quite honestly, we don’t have any concerns at this moment,” she said. “While there is political instability at this moment, these are generally peaceful, welcoming people who love visitors and treat them with a great deal of respect.”

Sibel Mulard, 39, an insurance account manager from France who was vacationing in Thailand with her husband, Lionel, and their two young boys, had just arrived on Phuket when the Bangkok riots started and received many calls from concerned family members in France urging her to come back right away.

But Ms. Mulard, who said she was more concerned about a tsunami than getting caught up in any violence, was determined to see out her vacation. She pointed out to her family that Phuket is a long way from Bangkok, adding: “I said, ‘I am going to stay. I am not coming back.’ ”

The Mulards did alter their plans so they would avoid the capital, however, due to the protests. Instead of sightseeing in Bangkok, Ms. Mulard said, “We will go to the islands.”

Source: NY Times 29 April 2009

Phuket market resists slowdown

2009-04-30T01:13:00.000-07:00

Seems to contradict CBRE's views recently...

Political instability in Thailand and a global economic slow-down have failed to curb Phuket’s booming property industry, according to a report in The Nation newspaper.

Quoting sources from several top real estate agencies, the report claims that Phuket’s strong tourism market is providing the boost needed to counter a slowing national economy.

Phuket remains an attractive retirement destination and every year more and more retirees are looking to Phuket. The growing number of tourists that choose to make Phuket their second or third home has also spurred the exponential growth of the property industry on the island.

According to a report from Colliers International Thailand, based on the company’s market research the number of residential units for sale in Phuket, which recorded a peak in 2006 with 1,473 units for sale, dipped last year, showing a 44 percent decrease. This year, however, the figures have rebounded and show a healthy growth.

The majority of property investors in Phuket are said to be expatriates based in Asia, particularly Hong Kong and Singapore. With real estate in these cities being highly priced, more attractive prices and environment are big draws for investors from these business hubs, either looking for holiday homes, investments with a rental return or looking longer-term to a future retirement home.

Phuket is also becoming popular with property purchasers from many new markets, such as Russia, South Korea, the Middle East and India. These buyers tend to be more investment-orientated, says the Colliers report, and are looking for potential capital appreciation and possibly rental income.

High quality construction and reputable hotel brands branching into time-share units have also raised the profile of the island and are becoming central to the high prices now being commanded.

The Colliers International Thailand study further claims that the eastern coast of Phuket is emerging as the future destination for high-end developments in Phuket, with the three marinas (and one more close to operational), traditional magnets for residential projects, all located along this coastline. The selling price per square metre in some projects on the eastern coast is higher than that on the western coast, although the land price per rai in the western areas is higher on average.

CB Richard Ellis Thailand also predicts a strong growth for the high-end market, particularly after the imminent upgrade of the Phuket International Airport, which aims at almost doubling the facility’s capacity by 2010.

Source: Asia Property Report

Thai tourism to lose $2.9 bln from riots: PM

2009-04-29T11:35:00.001-07:00

BANGKOK — Thai Prime Minister Abhisit Vejjajiva on Wednesday said tourism income was likely to fall by more than 102 billion baht (2.91 billion dollars) after deadly anti-government protests in April.

The same riots sparked losses of 220 million baht in damage to public property and loss of state income, according to the National Economic and Social Development Board (NESDB), the cabinet said in a statement.

Supporters of fugitive former premier Thaksin Shinawatra forced the closure of an Asian summit in Thailand on April 11, before taking to the streets of Bangkok where a state of emergency was declared for almost two weeks.

Street battles between protesters and soldiers left two dead and 123 people injured.

"Income from tourism this year is expected to fall by around 102.39 billion baht compared to 2008 due to the incidents in April, according to the NSDB," said Abhisit following the cabinet meeting.

"The number of foreign tourists in 2009 is also expected to drop by 877,474 people compared to last year," he added.

State services including public transport and road tolls received less revenue while electricity and telecommunications pylons were also damaged by the protests, the cabinet revealed in a statement.

Last week the government forecast 3.2 million fewer visitors to Thailand as a result of the unrest. Thailand last year recorded 14.1 million foreign visitors into the kingdom.

Rival protest campaigns have wracked Thailand for months, with opponents of Thaksin protesting late last year before a court toppled his allies from government, paving the way for Abhisit's Democrats to take power.

Source: AFP 29 April 2009

Thai tourism to lose $2.9 bln from riots: PM

2009-04-29T11:35:00.000-07:00

BANGKOK (AFP) — Thai Prime Minister Abhisit Vejjajiva on Wednesday said tourism income was likely to fall by more than 102 billion baht (2.91 billion dollars) after deadly anti-government protests in April.

The same riots sparked losses of 220 million baht in damage to public property and loss of state income, according to the National Economic and Social Development Board (NSDB), the cabinet said in a statement.

Supporters of fugitive former premier Thaksin Shinawatra forced the closure of an Asian summit in Thailand on April 11, before taking to the streets of Bangkok where a state of emergency was declared for almost two weeks.

Street battles between protesters and soldiers left two dead and 123 people injured.
"Income from tourism this year is expected to fall by around 102.39 billion baht compared to 2008 due to the incidents in April, according to the NSDB," said Abhisit following the cabinet meeting.

"The number of foreign tourists in 2009 is also expected to drop by 877,474 people compared to last year," he added.

State services including public transport and road tolls received less revenue while electricity and telecommunications pylons were also damaged by the protests, the cabinet revealed in a statement.

Last week the government forecast 3.2 million fewer visitors to Thailand as a result of the unrest. Thailand last year recorded 14.1 million foreign visitors into the kingdom.

Rival protest campaigns have wracked Thailand for months, with opponents of Thaksin protesting late last year before a court toppled his allies from government, paving the way for Abhisit's Democrats to take power.

Source: AFP 29 April 2009

Developers put luxury projects on hold in Thailand

2009-04-29T11:28:00.000-07:00

Buyer waiting to see if political situation gets any better

Residential projects that are worth more than Bt10 billion in resort destinations like Phuket, Krabi, Hua Hin, Pattaya and Koh Samui have been put on hold now that demand from foreign investors is showing a significant drop since last year.

According to a survey by The Nation last week, a number of property developers in tourist destinations have postponed the completion of the construction as they wait for an economic recovery.

International property agent CB Richard Ellis (CBRE) reported that the forward momentum in Phuket property in terms of price and take up over the last five years came to a halt in the fourth quarter of last year due to global recession.

This has resulted in a significant drop in transactions and project launches, while cancellations have increased considerably, the agent said.

"In many ways, the property market in Phuket is a foreign-driven market located on a Thai island," said David Simister, chairman of CB Richard Ellis Thailand. "The bulk of visitors, hotels guests and property buyers are all foreigners."

Nabeel Hussain, manager of CBRE Research, added: "Our earlier estimates called for as many as 1,700 condominium units to be completed in 2009, but we believe a number of projects will be delayed due to slower take-up rates. Similarly, in the villa market, we have identified over ten projects with more than 450 units that went on hold or were delayed during last year's fourth quarter alone. It also appears that around a quarter of all upscale hotel rooms under development are now on hold as well."

However, since the start of 2009, CBRE did note some positive elements. These include the fact that tourist numbers in Phuket remain among the highest compared to any other Asian resort and there is a lack of bank-financed mortgages that have played a significant role in the demise of other markets. As evidenced by the island's popularity, they point to the fact that the Ibis Patong Hotel recorded 100 per cent occupancy during the first weekend in March, which is after the end of the high season.

"In the long-term, we remain bullish on this market, since we believe that buyers of luxury and high-end properties tend to make choices based on lifestyle and not primarily pricing. That said, it is unlikely that demand for these high-end properties will recover before the global economy improves. Our view is that potential buyers who are able to view investment with discretion and who have suffered little from the global downturn still be interested in the near-term," Simister added.

Colliers International Thailand's head of research Risinee Sarikaputra also said that purchasing power of foreign investors, especially those from the United States, Europe, Hong Kong, and Singapore, have dropped significantly to between 20 per cent and 50 per cent depending on the location.

"After the sub-prime crisis hit the US and turned into a global crisis now, demand for luxury residential projects at prices between Bt25 million and Bt50 million have significantly dropped in both residential projects in inner-Bangkok and resort destinations," she said.

With the market trend, a number of property developers planning to launch new projects, especially those worth more than Bt10 billion, have decided to postpone things.

"Only customers who plan to launch new projects this year have decided to wait until next year," Risinee said.

Managing director of Knight Frank Charter (Thailand), Phanom Kanjanathiemthao, admitted that demand from foreign investors had halved last month compared to the same period last year.

The global economic crisis has badly affected the Thailand property market now that buyers from the US, Europe, Hong Kong and Singapore have suspended their overseas investments. As a result residential sales in Thailand, especially in terms of luxury condominiums that are focused on foreign buyers, has suffered significant losses since the last quarter of 2008 until now, he said.

"In terms of market trends, we advise property developers to put off the launch of their new residential projects until the second half of next year," he said.

Nexus Property Consultants' managing director Apisit Limlomwongse admitted that his company's sales had dropped in the first quarter of this year to between 5 and 10 per cent, and as a result the firm has had to organise road shows to boost its sales.

"The US financial crisis has not had a direct impact on the Thai property market as much as the current political uncertainty, which is scaring away local and foreign buyers planning to purchase property in the Kingdom," he explained. "Most of our potential buyers have suspended their decision to purchase and are waiting to see when the unrest will end."

Apisit added that the drop in the Bangkok property market might also have something to do with the location of some residential projects, especially those that are a fair way away from the Skytrain or the underground train system.

However, he said, prices for projects located close to transit systems will remain stable.

Source: The Nation Published on April 9, 2009

Chong Nonsi Lures Developers: Three Projects Worth B30bn Planned in Area

2009-04-29T11:15:00.000-07:00

Apr. 28--Locations on Narathiwat Ratchanakharin Road and Silom Road near the Chong Nonsi BTS station are becoming hot with three new property projects scheduled for future development with a total value of at least 30 billion baht.

According to property brokers and consultants, the biggest project with the highest value will be a luxury development called Bangkok Mixed-Use.

It will be a joint venture between the Thai property firm Pace Development, the developer of the luxury Saladaeng Residences, and the Israeli investor Industrial Buildings Corporation (IBC), a large real estate developer traded on the Tel Aviv Stock Exchange.

Both planned an official announcement last Wednesday but postponed it due to unfavourable sentiment, though the investment and development plan continues to move forward.

An industry source said the plot was a seven-rai site on Narathiwat Ratchanakharin Road close to the Chong Nonsi BTS station, next door to Golden Land's The Infinity, a nearly completed luxury residential project.

He said that Sorapoj Techakraisri, Pace Development's CEO, had dealt with the plot's landlords for five years. Of the seven rai, the front three rai were owned by Prasong Panichpakdee of property firm Somprasong Group and the four rai at the back belonged to the Catholic Missions.

The land price was not disclosed. But market prices rose to 800,000 baht a square wah after the giant insurer AIA completed a deal with Metrostar Property for a plot on South Sathon Road last year, the source added.

In August last year, IBC reported that the company, controlled by Israeli investor Eliezer Fishman, would invest 71.1 million shekels (595 million baht) to develop a luxury property project in Bangkok.

It signed an agreement with three Thai companies that held the rights to the land plot. IBC would have 50 percent voting shares and the right to profits in the companies initiating the project.

The project would include two buildings with total built space of 123,000 square metres, one of which would be a 70-storey skyscraper comprising luxury apartments, a Ritz Carlton hotel and commercial space, scheduled to be completed by 2012.

"If the project is completed, it would be the second highest building in Thailand, following Baiyoke Tower," the source said. "And this location will shine as two luxury hotels are located there -- W Hotel on the same plot of The Infinity and Ritz Carlton."

According to the Department of Business Development, IBC and Pace Development have set up three joint-venture companies. They are Pace Project One with registered capital of 200 million baht in 2007, Pace Project Two and Pace Project Three in 2008 with capital of 200 million and 100 million baht respectively.

The source said IBC and Pace had now revised the plan and had additional options. The project investment is estimated at around 40 billion baht while the value should exceed 50 billion.

Before teaming with Pace Development, IBC had been interested in a project by renowned architect Rangsan Torsuwan, the Sathorn Unique Tower condominium, a suspended 49-storey building on Charoen Krung Road.

It also spent 40-50 million baht as a deposit but the deal could not be completed due to unresolved problems with the building's creditors, the source added.

The listed developer Major Development Plc (MJD), meanwhile, acquired a 500-square-wah site on Anuman Ratchathon Road, which links Silom and Surawong roads, in the third quarter last year for 361 million baht.

MJD managing director Suriya Poolvoralaks said the company planned to launch a condominium project with 100 to 200 units in the first quarter of this year but needed to postpone it to the second half of the year as the timing was poor.

"The Silom and Surawong area has potential as the location and property prices are good," he said.

In the second half, MJD also plans to launch a new condominium in the Phaya Thai area but it is postponing the launch of another condominium in Thong Lo to next year.

On Pramuan Road, linking Silom and North Sathon roads near the Hindu Temple, the Phornprapha family is interested in a three-rai plot where an SMC Motors Volvo showroom was once situated.

"This leasehold plot has a two-year contract remaining but the showroom is now empty and removed," said the source.

The family plans to develop the hip-style Siam@Silom Hotel, following up on the success of its Siam@Siam Hotel near the National Stadium BTS station.

Along Sathon Road, it is very rare to find large plots for new development. Currently, there is only one plot of 10 rai on the corner of South Sathon Road near the Surasak Intersection and Taksin Bridge, on the offer for around 650,000 baht a square wah, said a property broker.

The plot has attracted a lot of interest from investors and developers but most of the deals have failed due to problems with some landlords and concerns about evictions, said the source.

Source: Bangkok Post, Thailand

Thailand property sector sluggish

2009-04-29T11:10:00.000-07:00

Bangkok - Thailand's property sector, hard-hit by the global recession and political instability since the last quarter of 2008, has yet to witness the kind of fire sales seen in the Asian crisis of 1997, Jones Lang LaSalle (Thailand) said Wednesday. While the economic slowdown has led to falling office rents in Bangkok, to date there have been few investments in distressed assets largely because owners are not distressed, the international property consultant said in their latest property review.

"The gap between buyers and sellers' prices expectations has continued to be a factor in curtailing property investment transactions," Jones Lang LaSalle noted.
"With the economy and the real estate market in a downturn, buyers expect to buy quality property assets at the deeply discounted prices seen during the tom yum koong crisis, an expectation which just isn't being met by owners who are currently liquid and not overly leveraged," it added in the company's most recent sector review.

"Tom yam koong," the name of Thailand's famous spicy shrimp soup, was used to describe the financial crisis of 1997 that started in Bangkok and was blamed largely on over-investment in property and excessive bank lending to what turned into a property bubble.

"Many of the distressed sales following the 1997 financial crisis were the result of banks needing to restructure an abundance of non-performing loans, a condition which does not exist today," Jones Lang LaSalle said.

The company, however, noted that while there had been few property investments in recent months, office rents were on the decline.

The average Grade A office rentals in central Bangkok had fallen from 671 baht (19.95 dollars) per square metre per month at year-end 2008 to 662 baht (18.70) at the end of first-quarter 2009.

"Real estate in Thailand has increasingly become a buyer/tenant market," Suphin Mechuchep, Managing Director of Jones Lang LaSalle, said. "Softening demand has resulted in stronger competition in both the residential and office markets, with more incentives being offered to buyers and tenants."

SUPALAI'S BUSINESS PLAN - Five projects planned near mass transit lines

2007-06-27T17:23:00.000-07:00

Looks like more condos will be built along the mass transit lines... good news for buyers. Extracted from the Bangkok Post today.

The listed developer Supalai Plc plans to launch five projects worth a combined four billion baht during the second half of the year, according to deputy managing director Atip Bijanonda. The company's new developments would be located in the Ratchadaphisek, Pin Klao and Rama V areas, close to three future mass transit lines.

Two of the developments will be condominiums. One will be City Home Ratchada-Pin Klao located on a 16-rai site on Charan Sanitwong Road, opposite Yanhee Hospital. It will have one 28-storey and six eight-storey buildings with a total of 2,025 units worth a combined 2.7 billion baht. Unit sizes would be between 30 and 70 square metres with prices starting at 900,000 baht a unit.

In the next few years, Charan Sanitwong Road between the Rama VII and Krung Thon bridges is expected to become a new central business district as three mass transit lines will pass nearby locations, Mr Atip said.

They include the Purple Line passing the Wong Sawang junction, the Red Line from Bang Sue to Rangsit and the Blue Line in the Tha Phra area.

These three lines would cross near the Rama VII Bridge, making the Charan Sanitwong area a golden location for condominiums on par with the Sukhumvit area, the company believes.

New condominiums are mostly located in inner Bangkok in the Ratchadaphisek, Ratchayothin and Asok areas, as well as the central business district on Silom and Sathon roads, where high land prices have driven up unit prices.

Supalai plans to launch pre-sales on Saturday and Sunday to existing customers, who already booked 20% in each new project. Sales to the general public will open on July 7-8.

Three new low-rise developments will be single houses, townhouses and duplexes in the Kanchanaphisek-Rama V area. One will be on a 100-rai site with single houses priced at 2.7 million baht a unit on average.

Another two projects would be townhouses and duplexes on a 40-rai site and 100 townhouses priced lower than two million baht on a 20-rai site in the Wong Sawang area, said Mr Atip.

Soccer Star Joe Cole's dual Thai mission

2007-06-24T00:01:00.000-07:00

RAISE funds for charity, visit a children's home, and buy a holiday resort home.

All that in two days for Chelsea star Joe Cole. Picture shows Joe Cole's girlfriend...

The England midfielder paid a whirlwind visit to Thailand on Tuesday, where he went to the seaside resort of Hua Hin to claim ownership of his latest piece of overseas property - a luxury penthouse apartment in the Hua Hin Country Club.

Cole also found time to meet underprivileged children in Bangkok under the Human Development Foundation (HDF).

He donated an autographed England shirt and other football memorabilia for a HDF charity auction event, which is expected to raise around 12 million baht ($572,000).

DELIGHTED

It is not just the children who were delighted to see the Chelsea player.

The growing property market in Thai seaside resort Hua Hin received a boost when Cole visited the town to see his penthouse apartment.

'I looked at the quality of the properties here, such as the finishes, and took advice from the men who look after my properties abroad,' Cole told Asia Property Report.

He added: 'They thought this was the best destination (to invest in) so I've come out here to take a look. This is the first opportunity I've had to come to Hua Hin and I'm very happy I invested here.'

Hua Hin's property growth really started to take off about three-and-a-half years ago, benefiting from its close proximity to Bangkok and a prestigious royal history.

Located on the south-eastern shore of Thailand about 230km south of Bangkok, it has been the Thai royal family's holiday retreat since 1928, and where the King now resides.

Hua Hin has long been considered a golfer's paradise, given that Thailand's first golf course - the Royal Hua Hin Golf Course - was built in 1924 and remains a popular tee-off spot today.

The Black Mountain Golf Course, consisting of two newly constructed 18-hole golf courses which opened this year, is the seventh to be built in the Hua Hin area.

And like most footballers, Cole says he's always up for spending some down time on the greens, which is part of the reason he selected the Hua Hin Country Club - which overlooks Black Mountain - for a holiday home.

'I'm not a good golfer, but I do enjoy a round. I actually haven't played for about eight months, as I've spent most of the season injured,' said Cole.

'I like a bit of privacy but I also like to socialise so it's lovely that the property is on the golf course.

'It's always going to be busy. There's a clubhouse and there will always be someone who's willing to take us for a round.'

The Hua Hin Country Club is a freehold luxury apartment project. The development is expected to be completed in about a year and will have full resort facilities.

Cole said the property just 'ticked all the right boxes'.

'I've only been here a few hours, but after having a drive around all the villages and down the mountain roads, I'm already 100 per cent sure I've made the right decision,' he said.

'Who knows, maybe I'll even get a few more (investors) here...help spread the word.'

In recent years, Hua Hin has attracted worldwide acclaim with an explosion of five-star resorts.

The town has been visited by big names like Cole's England team-mate David Beckham, and supermodel Kate Moss.

Source: The Electric Sports

Beckhamania in Phuket

2007-06-23T18:02:00.000-07:00

Rumours that England and Los Angles Galaxy football star David Beckham and family are to visit Phuket have thrown the resort island into a frenzy.

Beckham, one of the world's most recognisable sporting personalities, plans to holiday on Phuket with wife Victoria and three sons Brooklyn, Romeo and Cruz.

The news was leaked to local news media, which have spent the past week tracking down where the family will stay.

Telephones at five-star hotels rang non-stop as unsuccessful inquiries were made as to his whereabouts.

Cape Panwa is considered a prime candidate, but the hotel denies the speculation. Neither Beckham nor the Thailand Football Association has made a reservation, the hotel said.

"Maybe Becks will stay there but has asked the hotel not to let on for reasons of personal privacy," one local reporter said.

Source: The Nation

Impact on course to grow 20% this year - Challenger helps increase bookings

2007-06-22T19:46:00.000-07:00

Impact Exhibition Management Co, the operator of Impact Arena exhibition centre in Muang Thong Thani, says it is on course for 20% growth this year despite the country's weak economy.

''Exhibitions are generally planned a year in advance, and we have not yet seen any changes in big events,'' said Paul Kanjanapas, the company's managing director.

''On top of that, weve surprisingly found our meeting, wedding and party business has had strong growth of more than 50% thanks to the opening of the Challenger exhibition hall.''

The five-billion-baht Challenger, which opened late last year, is the world's largest column-free exhibition hall. Measuring 459 by 131.2 metres with a 16-metre-high ceiling and exhibition floor space of 60,000 sq m _ larger than eight football fields _ it also offers indoor parking space for 2,500 cars.

Its most striking feature is the Royal Jubilee Ballroom, the largest in the country, with 3,500 sq m of column-free space, a 20-metre high ceiling and catwalks and mechanically adjustable suspension equipment with high load capacity.

The Challenger hall is booked for big events for the second half of this year such as Bangkok Gem and Jewelry Fair, Bangkok International Gift Fair and Bangkok International Houseware Fair (BIG & BIH), Thailand International Motor Expo, and the celebrations of His Majesty the King's 80th birthday.

According to Mr Paul, despite a weak economy, more than 50 wealthy couples have booked the Royal Jubilee Ballroom for weddings this year, generating revenue of 30 million baht.

Mr Paul attributed a popularity of the ballroom mainly to Impact's quality of services and the attractive decoration of the ballroom itself.

Including the Challenger hall, Impact now has exhibition space of 140,000 sq m, with capacity utilisation of 60-70% of available space.

Currently, local clients contribute about 70% of Impact's business, with the international market accounting for 30%. The company hopes to increase the proportion of the international market to at least 40% this year.

Impact drew about 16 million visitors last year, with the figure expected to increase to about 17 million this year.

Ticon plans first logistics industrial park

2007-06-22T19:42:00.000-07:00

Ticon Industrial Connection, a rental-factory provider, plans to spend Bt3.867 billion to build the country's first-ever logistics industrial park on 450 rai in Chachoengsao province.

The logistics park will be operated by its Ticon Logistics Park subsidiary.

The park is suitable for running logistics services, thanks to its good location, which is 22 kilometres from Suvarnabhumi Airport and 50km from Bangkok and Laem Chabang deep-sea port, said Hirunya Suchinai, deputy secretary-general of the Board of Investment, which last week granted tax privileges to the project.

"Ticon is the first company to apply for promotion privileges for a logistics industrial-park development. This investment will boost competitiveness to international standards and reduce transportation costs for local logistics operators and exporters. As a result, it will help consumers buy cheaper products," she said.

The project will support both domestic and international firms that need rental factories, duty-free warehouses, container transfer stations and other logistics services.

Source: The Nation

PROPERTY / INVESTMENT OPPORTUNITIES - Mass transit would boost real estate sector

2007-06-22T19:38:00.000-07:00

A property expert has urged the government to speed up work on new mass-transit routes as it would help the overall economy and the real estate sector.

Investment in the property business generally creates related economic activity that is about 2.5 times of the invested amount, according to Associate Prof Manop Bhongsadadt of Chulalongkorn University.

Mass transit would offer more convenient travel, a better environment, reduced fuel consumption reduction and thus an improved trade balance, helping the economy through government investment and distribution of income, he said yesterday.

''Within the next 15 years, Bangkok, which currently has a population around eight million, would increase to 15 million so mass transit with good city planning will help manage the population relocation to Greater Bangkok,'' he said at a seminar on the industry outlook.

Mr Manop suggested that the Bangkok Metropolitan Administration amend city planning regulations by increasing the density of residents allowed in real estate projects on condition that developers provide more open spaces.

As Bangkok continues to grow, the BMA envisions six new strategic economic locations farther out from the congested city centre, including Yannawa, once transport links improve.

Teerachon Manomaiphibul, the deputy managing director of the listed developer Property Perfect Plc, suggested the Mass Rapid Transit Authority raise funding for more routes by selling or leasing its land bank to generate capital for investment. The potential land bank includes more than 100 rai in Makkasan and Bang Sue.

He believes new transit routes will also lead to a new facet of competition among real estate developers as they will have to more carefully serve customers' changing lifestyles and offer high quality of life.

The impact of the existing BTS skytrain and MRT underground train is already clear n several areas, developers say. Land prices have more than doubled in areas along the three main routes: Sukhumvit, Phahon Yothin and Ratchadaphisek. Outer Sukhumvit prices have risen to from between 30,000 and 40,000 baht to more than 100,000 baht per square wah, similar to prices along Ratchadaphisek, which have risen from between 40,000 and 50,000 baht per square wah.

Mr Teerachon said there were 48 condominiums near mass transit with 22,786 units as of 2006. Many have had good sales with some sold out and some recording at least 80% sales.

However, he said the government's mass-transit plan still contained risks due to frequent policy changes, so developers lacked confidence in whether and where routes would be constructed, which affects investment planning and timing.

''Megaprojects have been drawn into politics,'' he said.

Mr Teerachon believes more mass transit will create satellite communities to help expand growth and reduce density in the capital's central area. These communities would help absorb demand from city condominiums to townhouses and single houses on the outskirts.

He said the public utilities that should be provided for every 5,000 residential units included a kindergarten, a high school, polyclinic, middle-size public park and sport stadium. Also essential are a feeder system to reach the mass-transit lines, supermarkets, commercial areas, police and fire stations, financial institution branches and areas for small business.

Source: Bangkok Post

Bangkok's Sukhumvit Soi 24 Strengthens its Position as Sukhumvit's Prime Location

2007-06-22T04:24:00.000-07:00

The Soi 24 and Soi 39 axis has become Sukhumvit’s most prime location anchored by the Prompong BTS station and the Emporium shopping centre, according to international property consultants CB Richard Ellis.

The Soi 24 and Soi 39 axis has become Sukhumvit’s most prime location anchored by the Prompong BTS station and the Emporium shopping centre, according to international property consultants CB Richard Ellis.

A range of new property developments are under construction in this location and the latest addition, The Queen’s Park View Apartment, has now been completed and is ready for occupancy.

The Queen’s Park View Apartment is located on Soi Mettiniwet which is a sub-soi of Sukhumit 24 overlooking Benchasiri Park.

The location provides an attractive combination of easy access to the Prompong BTS station and the Emporium shopping mall with the advantage of being next to the park.

There are 36 apartments in the development with a range of two-bedroom 90 square metre units and three-bedroom units of 150 and 240 square metres. All the apartments are fully furnished. Facilities provided are of the highest standards with a 20-metre swimming pool, exercise room and sauna.

CB Richard Ellis has been appointed as the sole leasing agent and property manager for this exclusive project.

“Sukhumvit 24 is becoming one of Bangkok’s most popular residential locations” said Mr. Theerathorn Prapanpong, Head of Residential Leasing Services at CB Richard Ellis.

“The unique attractiveness of Queen’s Park View is that the apartment is only a 5-minute walk to the the Prompong BTS station and the Emporium but, at the same time, is located on a very quiet sub-soi with great access to the park.

Source: PR Web

Bangkok - New condo lifestyle

2007-06-22T04:06:00.000-07:00

Changes in home-buyers' tastes lead to the emergence of a new city high-rise community.

Have you noticed the number of condominium projects under construction around Sukhumvit, Sathorn and Ratchadaphisek roads? Bangkok is witnessing not only a new trend in city living, but also the creation of a new community of condo dwellers clustered around the routes of the Skytrain and the subway.

This is how the high cost of oil - hence fuel and transport, is changing our capital. The condo buyers seek, first and foremost, to reduce their transport costs. But they haven't forgotten comfort and they're eager to join a new city-bound lifestyle.

Alan Lin, CEO of property agent Harrison, says demand for condominium units in the Sukhumvit, Sathorn and Ratchadaphisek areas has enjoyed strong growth, and most property developers have followed demand by turning away from detached housing and town houses to build condominiums in those areas.

One Harrison survey showed as many as 10 condominium projects worth up to Bt10 billion were launched in the first four months of the year, offering units priced from Bt1.5 million to Bt5 million and representing 60 per cent of all condominium projects in Bangkok.

Most of the new projects are focused on the middle- and upper-income markets.

Asian Property Development has launched The Life condominium projects on Sathorn, Ratchadaphisek and Phaholyothin roads. Preuksa Real Estate will build its first city condominium project, The Ivy, on Ratchadaphisek Road. Woraluk Property is building the Le Lux condominium on Sukhumvit Road. And Sansiri has launched its latest project, called Siri, on Sukhumvit Road. The list goes on.

Lin says that although the projects launched in the first four months of the year will target the middle- and upper-income markets, their main selling point remains their proximity to mass transit systems and the consequent savings in energy costs.

Asian Property Development CEO Anuphong Assavabhokhin, whose company's expertise is building city detached-house and town-house projects, says the firm changed to condominiums because of consumer demand. Home-buyers are opting to buy city condominiums because of the transport convenience, plus they are concerned about their quality of life.

In the first quarter, growth in total housing sales was less than 5 per cent year on year. However, when the condominium market is considered on its own, growth in the first quarter was up 20 per cent, because of the big shift in spending away from detached houses, double houses and town houses.

Anuphong says Asian Property Development had to follow customer demand in order to achieve its sales target of Bt7 billion this year, an increase of 16 per cent over last year's total sales of Bt6 million.

Preuksa Real Estate, another property firm with a reputation for building town houses and detached houses, has also diversified into the city condominium market with The Ivy, which will focus on middle-income earners.

Preuksa president Thongma Vijitpongpun says the move was made to chase demand. However, the key to success for city condominiums is a location close to mass transit, so Preuksa's first city project is on Ratchadaphisek Road, close to the subway.

For many property developers, the pursuit of consumer demand has entailed abrupt changes in normal practice. No more abrupt, however, than the changes emerging in and around Sukhumvit, Sathorn, and Ratchadaphisek roads, where many Bangkokians will settle over the next two years to create a new condominium-based community around the city's mass-transit routes.

Source: The Nation

Phuket foreign property sales drop

2007-06-21T18:35:00.000-07:00

Strong baht, legal hurdles hurt market.

The political situation, stronger baht and changes to the foreign ownership law have slowed down property sales to foreign buyers, according to the Phuket-based property broker and consultant Andrew Park Co Ltd. Graeme Laird, the company's president and chief executive, said property agents in Pattaya, Samui and Phuket discussed the situation and agreed that business had been bad since last year.

''The baht has been stronger by 15% in the past 18 months and the new enforcement of the nominee laws hurt nominee buyers. The worst is the political situation that was uncertain since mid-last year,'' he said.

Currently, the company is managing sales for The Crest Phuket, a luxury freehold condominium project worth 630 million baht that is scheduled to be launched on June 28 in Phuket.

Owned and developed by a Thai tourism entrepreneur, the project is located on a six-rai site between Kathu and Patong beaches, about 1.5 km from Patong Beach. About five rai of the plot were formerly a non-performing loan asset that the owner acquired in 2005.

With a total investment of 400 million baht including the plot and construction, The Crest will have 22 two-bedroom duplex units sized at 127 square metres and priced between 22 million and 26 million baht; and eight two-bedroom poolside condominiums sized at 248 sq m and priced from 10-13 million baht a unit, or about 80,000 to 95,000 baht per sq m.

Mr Laird said the owner had demolished the old villas and would build eight semi-detached villas instead. Construction started in May 2007 and will finish in October 2008. Sales are expected to close within the completion period, said Mr Laird.

Without the negative economic factors, he said, the 49% quota to foreign buyers would have been sold this year.

''After completion and if there are any units remaining, the owner will set up a company to own them and allow long-term leasing to foreign buyers,'' he said, adding that the company would stimulate sales with a 5% discount from the launch of the project until Aug 31.

Mr Laird said the company was in talks with developers to sell another two projects in Phuket. One would comprise 14 completed villas on Bang Tao Beach worth 300 million baht. Another is in the design process.

Meanwhile, another property agent, CB Richard Ellis, is managing sales of Shangri-La's Phuket Resort and Spa with 50 villas scheduled for completion in early 2009.

''Buyers from across Asia and worldwide are already spotting a great investment opportunity with the private villas,'' said David Simister, the chairman of CB Richard Ellis Thailand.

The villas will be sold on a leasehold basis in accordance with both current and proposed foreign ownership laws in Thailand. It will be located at the Layan end of Bang Tao beach on Phuket's west coast.

CBRE estimated that well-managed rental properties in Phuket produced annual returns of 6-8% a year. Phuket also continued to offer buyers the potential for capital appreciation.

Although there is often a small risk associated with an off-plan purchase, the risk in this case would be insignificant given the operation and management by the Shangri-La brand and the endorsement of a reputable developer, CBRE said.

Source: Bangkok Post

RETAILING SEVENTH DECADE - Central hopes to establish presence in China by 2008

2007-06-21T18:34:00.000-07:00

The Central Group is preparing for a new milestone as it enters its seventh decade by establishing a presence in the region, with a deal in China expected to be closed by the end of this year.

Tos Chirathivat, chief executive of Central Retail Corporation, said the negotiations between CRC and prospective partners in China were about 90% complete. By year-end the company expects to choose a location from among Shanghai, Beijing, Nanjing or Guangzhou. Initially, it will lease space in a shopping complex now under construction.

The country's largest retail and department store group is preparing to invest about 10 billion baht in the Chinese market.

Central had earlier been looking at Southeast Asian markets including Indonesia but progress was slow.

''We have been studying the feasibility of establishing our retail presence in the Asean region for years and now our plan for the international market is one year behind our target,'' Mr Tos said.

He said the company was reluctant to offer more details about its China plans following the experience in Indonesia, where earlier negotiations collapsed at the last minute.

Despite its great promise, the Chinese retail market offers stiff challenges even to large, deep-pocketed companies.

C.P. Seven Eleven Plc, the CP Group affiliate that operates more than 3,000 7-Eleven convenience stores in Thailand, recently sold its Lotus superstore business in Shanghai to Chia Tai Enterprises International Ltd (CTEI), another CP affiliate, after struggling for several years.

''As of now, we are confident about competing in the Chinese market because the department store business in China is not good as other retail sectors and the competition is also lower than in the hypermarket business,'' Mr Tos said.

Vietnam is also in central's business pipeline.

''The retail market in Vietnam is zero now so it has huge potential for us. It will become a tough rival and could catch up to Thailand over the next 15 or 20 years,'' he said.Expansion in Vietnam is difficult, however, because the retail market is highly dependent on the property market, which in turn is dominated by the state. Central Group chairman Wanchai Chirathivat said the group would help partners in Hanoi run a shopping complex.

''Though we are moving to the overseas market, we have not stopped our investment in the domestic market,'' Mr Wanchai said. ''For the next 60 years, we want to see a stronger presence, having at least one business unit in every province in Thailand.''

Mr Tos added that the company was now looking for design firms for its new nine-rai plot, recently purchased from the UK government at the British Embassy site on Phloen Chit Road, and expected a result next month.

''We got this plot land to complement our flagship Chidlom outlet and make it completely perfect,'' he said.

Central this week is celebrating the 60th anniversary of a business that has grown from a family shophouse to a multi-faceted retail empire. In that time it has confronted its share of challenges though executives say the 1997 financial crisis was the worst.

''We had about 20 billion in debt from the crisis as we had relied on overseas loans. We felt desperate but we fought back and changed the crisis to an opportunity with a recovery in two years,'' Mr Tos said.

Now, Central has a stronger operation than in the past, particularly in terms of its cash management and balance sheet.

Mr Tos had his concerns though.

''The situation is worse than the 1997 financial crisis. If the situation continues, the country's growth will pause for ten years and allow competitors including Vietnam to catch up,'' he said.

Source: Bangkok Post

Expert wants capital control 30% reserve to go

2007-06-21T18:31:00.000-07:00

Capital controls did not deter speculation.

The Bank of Thailand should completely terminate the 30% reserve requirement on short-term capital inflows because lower interest rates and the central bank's intervention capabilities are effectively stabilising the exchange rate, says a senior financial expert. Olarn Chaipravat, a former Siam Commercial Bank president and honorary adviser to the Fiscal Policy Research Institute, said the capital controls were not necessary because they had not prevented baht speculation.

Policymakers had to exempt stocks and foreign direct investments from the measures immediately after the Dec 18 announcement of the controls when the Stock Exchange of Thailand dropped 15% in a single day.

The Bank of Thailand still requires a reserve for capital inflows investing in the bond market.

Dr Olarn said the central bank had intervened in the currency markets by issuing bonds to purchase US dollars and by cutting benchmark interest rates by 1.5 percentage points since the beginning of the year, which also helped stabilise foreign exchange rates.

The schemes have stabilised the baht at 34-35 baht against the US dollar.

Furthermore, Dr Olarn said, the Finance Ministry approved the framework for the Bank of Thailand to issue additional bonds worth 400 billion baht for further intervention.

''As a result, the existence of the 30% reserve requirement measure is no longer necessary.''

Thailand's official reserves stand at US$96 billion, of which $70 billion are held by the Bank of Thailand and $20 billion by commercial banks.

He said that total official reserves were too high _ particularly the $20 billion held by banks. He argues that private reserves should be allocated for overseas investment.

In another development, Dr Olarn reported that a recent survey of 75 industrialists, 50 public servants and researchers and 25 bankers showed that 70% expected the baht to appreciate to 34 baht to the US dollar by the year-end.

He said the result was not surprising given ongoing current account surpluses.

In the first half of 2007, Thailand's current account surplus was $6 billion and net capital flows were $3 billion.

Dr Olarn expects a current account surpluses in the second half at $3 billion and net capital flows around $2 billion.

The baht appreciation has hurt export industries such as textiles and furniture. The exchange rate has benefited sectors that consume a great deal of imported materials and sell most of their products locally, for instance, the steel and oil industries.

''The baht's appreciation only had a small impact on export volumes of commodities and near-commodity products, while the minimum wage remains stable or has even increased, so the production cost of export-oriented industries rises, inevitably,'' said Dr Olarn.

''It is useless to ask the government and the central bank to push down the baht's value by 10% and reduce minimum wages. Therefore, industrialists should concentrate on human resources training, improving efficiency of production machinery and technologies and building their brands.''

Dr Olarn suggested that businesses that could not improve factors of production should relocate their plants to lower-cost countries, including Vietnam, Laos and Cambodia.

Source: Bangkok Post

Bangkok condominiums help avoid chaos

2007-06-21T18:27:00.000-07:00

Urban workers flock to buy condos as living conditions deteriorate.

How much smaller can small condos go? In the housing market of late, a number of developers have designed units that are 20-30 per cent smaller than standard types, in a sanguine bid to lower costs and prices while maintaining profit margins.

The usual 30-square-metre studio is now 24 square metres at many projects, shrinking 20 per cent from a year ago.

To seal the sale, developers are throwing in free furniture. Some provide everything, from beds and television sets to refrigerators.

Prices start from about Bt1 million, which may sound like a steal, considering that just one year ago, few builders offered units below Bt3 million.

So what's the catch?

Indeed, the immediate reaction from veteran buyers is: "If it sounds too good to be true, it probably is too good to be true."

But the fact is there is no catch, except that these are not meant to be permanent homes. These small units are expected to be used as temporary shelters while working in the city on weekdays.

The units are handy in that they allow buyers to avoid enormous stress that comes with daily commuting, sometimes several hours from the suburbs.

A million baht to escape the constant nightmare of driving in clogged-up, unmoving traffic and falling sick from exhaustion is a small price to pay.

Even the monthly maintenance fee is a fair trade-off for the agony of inhaling toxic fumes on the Expressway and coping with reckless bus drivers and intoxicated truckers.

To be sure, Bangkok ranks closer on the lower mid-range of global cities, far from the top-20 ranking. And its problems are expanding.

The past decade has seen a sharp plunge in living standards as poor town planning takes its toll on city folk.

One British hotelier recently remarked, "Bangkok is not a place I would recommend to retirees from England. Chiang Mai or Hua Hin are more sensible places to settle down."

In the face of this wretched situation, city condominiums could be a welcome addition - if they are not too densely packed and don't make buyers more depressed than they already are.

The Aspace and My Condo sites appear to provide more recreational facilities than originally anticipated. The Environmental Impact Assessment Board has been instrumental in doing its part to ensure builders don't get away by providing the bare minimum while running away with billions of baht in profit.

If done correctly, city condominiums can help urban worker extend his or her lifespan by a decade or more through a reduction in daily stress that can kill or maim.

Doctors have recently warned about the sharp rise in cases of mental disorders and suicide, especially among city-dwellers. Government officials, elected or otherwise, must do more than pay lip service about providing more parks and reduce pollution, noise and the number of heavy vehicles on the road.

More can be done to promote a civic mind and chase unruly vendors from prime inner-city land like Sukhumvit and Silom roads.

City administrators need to review ways for city condominiums not to be a nuisance, but rather properly built housing estates that enhance the quality of life for Bangkokians.

They should not be allowed to be built near unsuitable places such as the mouth of expressway entrances and exits.

One buyer who bought a unit near his work place says, "You need not buy a brand new condo, just a place that is preferably within walking distance to your office. Failing that, a condo that is connected to the BTS or subway should be considered.

But conditions on the Skytrain have become tedious. Overcrowding and inadequate capacity, not to mention the intrusion of noisy advertising aboard the cars, have diminished the worth of the once-excellent transport system.

Those who have moved near their workplace say their lives have really improved.

"I have less stress, more free time for socialising, and I don't waste precious time being stuck in traffic three hours a day," says the buyer. "In one year, I save about 750 hours, or more than 30 days, that I would otherwise have wasted sitting in traffic jams. This is not considering the hundreds of thousands of baht wasted on fuel; taxi fares are the cost of a maintaining a car. Considering these benefits, buying a city condo is justified.

The one problem, however, is that these projects are drawing a great many speculators.

Greed is never good, and people should heed the wishes of His Majesty the King, who advises us to live within our means.

But as there is no law to say one cannot hoard condos, the danger is creating a speculative bubble. Should an oversupply of units pack the market, which could happen sooner than later, these punters should not expect to be bailed out when stuck with units they cannot rent or resell.Stricter condominium regulations are needed to ward off this growing problem.

These include higher booking feees and mandatory payment of yearly maintenance fees - increase the current terms of collection from two years to, say, four years. The sinking fund could also be raised.

End-users will benefit from such rules, as the money will be locked in fixed accounts under the juristic body, requiring appointed signatures before money can be withdrawn.

In short, buyers are protected, while speculators must pay a bigger premium on their punts.

Source: The Nation

Housing Developer Preuksa Scores With Ivy

2007-06-21T18:23:00.000-07:00

Moves to tap urban buyers in Ratchada, Bangkok.

To identify opportunities, developers need to pay attention to changes in the marketplace, says Prasert Taedullayasatit, Preuksa Real Estate's chief business officer.

"This is especially true in urban housing, where competition is fierce and the chances of breaking out of one's core segment is tough," says Prasert, 39, a former Lalin and Siam Cement executive.

But Preuksa has recently scored well with Ivy Ratchada, a 399-unit middle-end condominium project 150 metres away from the Suthisarn subway station at Ratchadaphisek Soi 20. The site will land Preuksa Bt800 million, almost a tenth of its estimated Bt10-billion sales target this year.

Why is it drawing such crowds? "We've found the lifestyle of young Bangkok consumers have changed. In the past, they bought cars before homes. Today, many are buying condos first.

"In the past, people needed cars to go on a date, as buses were perceived as less romantic," he says. "With the BTS Skytrain and MRT subway, they no longer need cars and prefer mass transit, which is faster and cheaper. With condos linked to these lines, they can travel comfortably. Ivy condos are targeting them."

Ivy is a departure from Preuksa's lower middle-end housing market, which it dominates with a 70-per-cent share. It also encroaches on a segment that was once shared between Asian Property, Supalai and Plus Property.

"We're creating our own brand and design," says Prasert, who is also a top director. "We're not copying others."

During a visit to Ivy, which shares a tranquil compound with the Preecha Complex, one could sense there was originality and quality in the apartments.

Two show units, a 30-square-metre studio and 35-square-metre one bedroom, showed sleek interiors and felt roomy despite the small built-up area.

Innovative ways were found to provide an appearance of open, bright spaces. Special balconies have been built to hide ugly compressors, making the units more inviting compared with cramped units from unprofessional outfits.

For the current promotion, buyers will receive free air-conditioners and some built-in items.

On a price basis, Ivy is competitive as the starting floor price of Bt53,000 a square metre is below that of its nearest rival on Ratchadaphisek Road.

Preuksa sales staff do not push questionnaires for visitors to fill out when they walk in. "We want our buyers to book units, not fill out forms," Prasert says.

"On opening day alone, we had people queuing since the early morning hours," Prasert revealed. Even amid some of the most daunting times of political unrest and dissent, Preuksa managed to sell without much difficulty at all.

"The strategy," Prasert reveals, "is we do our homework before the launch. We employ professionals, mostly outsourcing the experts and talent that we lack, to finalise the design for the Ivy units."

"We spent a great deal of time to formulate the best features for the units to ensure they possessed enough advantages to beat our competition, design-wise as well as price-wise," he says.

"In selling property, we cannot afford mistakes. If we had launched faulty units, our buyers will just choose our competition's products, and we could be stuck with an expensive failure."

Leaving nothing to chance, Prasert enlisted seasoned veterans.

"We needed units that were professionally done so they would sell quickly," he says. By shortening the selling period, Preuksa is not stuck with a problem site. It can therefore move on to new lucrative projects.

Unlike some developers, Preuksa delivers its homes as fast as it possibly can. Because it possesses its own designers and builders, construction is rapid, as is its timetable for transferring home-ownership.

The speed of delivery reduces costs, maximises profit margins and cuts down wastage, he says.

Ivy Ratchada should be ready by the middle of next year, a 13-month schedule few firms can match.

Preuksa's strengths have drawn many investors, among them US pension fund Calpers, which holds a 5-per-cent stake. The firm was listed on the Stock Exchange of Thailand three years ago and is widely considered one of the more transparent and professionally run property companies.

Source: The Nation

Top Thai banker upbeat about economic growth in 2nd half

2007-06-21T00:35:00.000-07:00

Thailand's economy in the second half of this year will expand more satisfactorily than that of the first half of the year because there is a clarity on the constitution draft and the general election, according to a top banker.

Kasikornbank Plc president and Chief Executive Officer Bantoon Lamsum conceded the economy had slowed down to a certain extent due to political uncertainties. But the sluggishness had not deteriorated to a worrying level.

He said the continued rally in the Stock Exchange of Thailand index showed investors still had confidence in Thailand.

In addition, Mr. Bantoon believed that Thailand’s property sector would not experience a bubble burst although many real estate projects had popped up.

The banker said he viewed property developers had surveyed a consumer demand before deciding to launch their projects. They found the demand remains enough for the supply.

He said the current property situation is different from the past bubble burst.

At that time, property developers launch projects arbitrarily and found later that they could not be sold. Some developers sought bank loans for a speculative purpose.

Currently, he said, commercial banks had attempted to manage risk. Should they know any loan applications be made for speculation, they would not approve them, Mr. Bantoon said.

Source: MCOT

Regent Hotels & Resorts' New Development In Thailand

2007-06-20T16:37:00.000-07:00

In April, Regent Hotels & Resorts made its Caribbean debut with The Regent Palms Turks and Caicos, a luxury resort enclave on Grace Bay Beach. The resort, which overlooks the turquoise waters of Grace Bay Beach, features 72 luxury guest suites housed in five coral stone buildings that form a semicircle around a serpentine infinity pool. The Spa at The Regent Palms offers an array of pampering services for both men and women, and showcases two of the most highly acclaimed skincare names in beauty: Somme Institute and Sonya Dakar. The resort is owned by Palms Holdings Ltd. and Village Lot 24, Ltd.

The Regent Palms joins Regent's growing portfolio of new and in-development properties around the world. The company's well-defined growth plan in the U.S. includes The Regent Bal Harbour, opening in 2007, and The Regent Boston at Battery Wharf opening in 2008.

Regent's existing portfolio encompasses eight properties in the cities of Beijing, Berlin, Miami Beach, Shanghai, Singapore, Taipei and Zagreb. Other future developments include properties in Bangkok, Thailand; The Republic of Maldives, Abu Dhabi, United Arab Emirates; Papagayo, Costa Rica; and Dubrovnik, Croatia. The Regent Maldives, which is located off the southwestern tip of India in the Indian Ocean, is due to open in 2008. It will feature 23 beach villas and 27 over-water villas, including two presidential villas, allowing guests to observe the abundant marine life directly beneath their rooms. The resort will occupy the entire Maalefushi Island, just 50 minutes by seaplane from the capital city of Male.

Source: EarthTimes.Org

Krabi Airline set to debut later this year

2007-06-20T16:30:00.000-07:00

Krabi Airline is being set up and plans to operate between the province and international destinations, to take advantage of Krabi Airport's upgrade to an international airport.

The airline was founded by four investors, including ex-employees of Thai Airways International, including Kosol Vongsrisart.

It plans to fly to Norway, Germany and Australia by the end of the year and the US and Japan within five years, said Civil Aviation Department director-general Chaisak Angkasuwan.

Chaisak said the establishment of the airline would be completed very soon and that it would start operating on November 1.

The new airline began being organised after Krabi Airport was upgraded to international status. Krabi Airline will be the first fully scheduled airline using it.

At first, the airline will service two international routes: to Oslo and Munich.

In the second phase, between this year and 2009, the airline plans to fly to Sydney, Melbourne and Brisbane in Australia, plus one city in New Zealand. Chaisak said the airline would use two Boeing 777-200ER aircraft in its first year, increasing the number of aircraft to five within five years and up to 10 by 2013.

The airline is targeting tourists from Europe as the main market and expects to run an average cabin factor of at least 70 per cent.

Furthermore, the airline also plans to spread to Vancouver, Canada; Los Angeles and San Francisco, California; Tokyo and Osaka in Japan; and Seoul. These routes are set for 2011-13.

Krabi became one of the most popular beach resort destinations for foreigners in the years prior to the 2004 tsunami. It is still recovering, and tourists are gradually returning.

Meanwhile, Thailand's open-sky policy is key to encouraging investors to start an aviation business.

Chaisak added that more than 10 airlines were in the process of being established. Each one is required to have at least Bt200 million in registered capital.

Most are intended to serve Asian markets.

Source: The Nation

Thailand Inflation - Prices to rise in second half

2007-06-20T16:25:00.000-07:00

Commerce Minister Krirk-krai Jirapaet yesterday narrowed down the ministry's forecast for full-year inflation from 1.5-2.5 per cent to 2-2.5 per cent.

The ministry predicts inflation in the second half will rise slightly to 2.4 per cent, due to rising oil prices. Inflation was 2.2 per cent in the first five months.

The ministry will focus on many inflation-beating measures, including price monitoring, price controls and fairs selling low-priced goods, to relieve the burden of consumers.

Source: The Nation.

Hua Hin penthouse for soccer star Joe Cole

2007-06-20T04:54:00.000-07:00

The growing property market in Thai seaside resort Hua Hin received a powerful boost on Tuesday with the arrival of England football star Joe Cole, who paid a visit to town to claim ownership of his latest piece of overseas real estate – a luxury penthouse apartment in the Hua Hin Country Club.

“I looked at the quality of the properties here, such as the finishes, and took advice from advisors who look after my properties abroad,” the Chelsea mid-fielder told Property Report Asia. “They thought this was the best destination [to invest in] so I’ve come out here to take a look. This is the first opportunity I’ve had to come to Hua Hin and I’m very happy I invested here.”

Hua Hin’s property growth really started to take off about three and a half years ago, benefiting from its close proximity to Bangkok and a prestigious royal history. Located on the southeast shore of Thailand about 230km south of Bangkok, it has been the Thai royal family’s holiday retreat since 1928, and His Majesty the King resides there today.

Hua Hin has long been considered a golfer’s paradise, given that Thailand’s first golf course - the Royal Hua Hin Golf Course - was built here in 1924 and remains a popular tee-off spot today. The Black Mountain Golf Course, consisting of two newly constructed 18-hole golf courses which opened this year, is the seventh to be built in the Hua Hin area. And like most footballers, Cole says he’s always up for spending some down time on the greens, which is part of the reason he selected the Hua Hin Country Club – which overlooks Black Mountain - for a holiday home.

“I’m not a good golfer, but I do enjoy a round. I actually haven’t played for about eight months, as I’ve spent most of the season injured,” said Cole, noting that there were a couple of reasons he added the country club penthouse to his property portfolio. “I like a bit of privacy but I also like to socialize so it’s lovely that the property is on the golf course; it’s always going to busy, there’s a clubhouse and there will always be someone who’s willing to take us for a round.”

The Hua Hin Country Club, developed by the Lersuang Group, is a freehold luxury apartment project. The development is expected to be complete in about a year and will have full resort facilities within the Zephyr Valley project, which sits directly in front of the golf course offering spectacular views of mountains and lush green fairways.

Cole said he checked out the Hua Hin Country Club and Black Mountain websites before coming to Thailand, and the property just “ticked all the right boxes.”

“I’ve only been here a few hours, but after having a drive around all the villages and down the mountain roads I’m already 100% sure I’ve made the right decision,” he said. “Who knows, maybe I’ll even get a few more [investors] here…help spread the word.”

That’s certainly what Hua Hin Country club developer Lersuang is banking on. In recent years, Hua Hin has attracted worldwide acclaim with an explosion of 5-star resorts. The town has been visited by some pretty big names, such as the Beckhams and supermodel Kate Moss, who visited the world-renowned Chiva-Som Spa. However this is the first time an English football star has taken ownership of a holiday home here. But Cole is modest when it comes to his ability to attract investors.

“I think the development speaks for itself,” he said. “It’s a quality place, and I think that in itself will attract buyers.”

As for what Cole looks for when investing in a holiday home, he says there are a number of factors he takes into consideration: “Firstly, you’ve got to invest your money wisely, so you’ve always got to look at the location…This is a very up-and-coming market getting talked about a lot in England. Secondly, you look at the setting, and the people who are building it.”

Cole says there were a number of reasons he decided to pick up a holiday home in Thailand, such as fine weather and a nice culture, and added that he hoped to get a chance to watch some Thai boxing matches while he’s here.

“It’s a great place to have a holiday home, with great people. Thais are very polite, very family-oriented,” he said, adding he hopes to make it to Thailand as often as he can, but given his busy schedule that will likely be only once a year.

Jo Swain, Lersuang Group’s sales & marketing manager, says Cole’s recognition of Hua Hin as a holiday destination will benefit the town as a whole: “The football star’s draw to Hua Hin Country Club and ownership of a holiday Penthouse apartment at the development in the area signifies Hua Hin’s evolvement to become a lifestyle destination has been a successful one.”

The Lersuang Group say they are planning to increase their portfolio of already successful developments on the island of Phuket, with numerous developments earmarked Hua Hin as well. A “fly buy” programme has also been introduced for interested parties to sample a taste of Hua Hin, in partnership with the Evason Hideaway Hua Hin, where Cole stayed during his visit.

Source: The Property Report

Thailand's May export growth at historic level

2007-06-20T03:58:00.000-07:00

Thailand registered a historic export growth rate of 20.9 per cent in May, with the export value of US$13.05 billion, said Commerce Minister Krirk-Krai Jirapaet.

"Though the value is lower than in March, the growth rate is the highest ever in May," he told the conference on Wednesday.

Thailand's five-month export value totalled $58.74 billion, rising 18.8 per cent year on year. Against the imports of $53.42 billion which rose 4.4 per cent year on year, Thailand's trade surplus in the period was $5.32 billion.

"We experienced an export growth in every market, except in May where the US market dropped 0.7 per cent. We also found that the strong baht had slight impact on the export, unlike in late last year," the minister said.

Source: The Nation

Thai Elections Moved Forward By A Month To 25 November 2007

2007-06-20T01:52:00.000-07:00

The national poll moved up to November 25.

The national election will be moved up from December to November 25, Prime Minister Surayud Chulanont said Wednesday.

Surayud was speaking after meeting with Election Commission Apichart Sukattanond and Constitution Drafting Committee Noranit Settabutr. The original date was set for December 16 or 23.

Speaking at the same press briefing, Noranit said the reason for the change of date has to do with the fact that the drafting of the new charter will be completed earlier than expected.

He said the drafting of charter is expected to be completed on July 6 and then be forwarded to the National Legislative Assembly shortly afterwards.

The EC will then conduct referendum on August 19. A public approval to the draft would pave the way for a national election on November 25, Noranit said.

Source: The Nation

Shangri-La’s new landmark resort - Phuket’s “most lavish” branded villa development

2007-06-19T22:27:00.000-07:00

Phuket’s “most lavish” branded villa development is underway at Shangri-La’s new landmark resort.

Construction of the 50 exclusive private pool villas promising “unsurpassed” service” is about to start, following a site clearance which began in April.

The villas will be located amid lagoons and tropical gardens at the new Shangri-La’s Phuket Resort and Spa which is scheduled for completion in early 2009.

Property agency CB Richard Ellis is reporting visits by potential buyers from around the world to the on-site sales office which opened in mid-May. The construction of a show-villa will also commence in the near future.

A third of the exclusive development at the resort at Bang Tao beach, positioned as one of Asia’s top resorts, has already been snapped-up following a highly successful sales launch and exhibition in Hong Kong earlier this year.

“Buyers from across Asia and worldwide are already spotting a great investment opportunity with the private villas,” said David Simister, Chairman of CB Richard Ellis Thailand.

The 360 square metre residences are exquisitely designed for a “luxurious tropical lifestyle” in lush landscaped gardens with private swimming pools. Each villa features indoor and outdoor living areas that blend harmoniously, large terraces, a sala pavilion and outdoor showers making it one of Phuket’s most substantial branded pool villas.

The development also features a waterway system connecting each residence, an architectural design which was taken from the Dubai Hotel “Al Qsar Madinat Jumeirah”

“Owners will benefit from an outstanding design and the integrity of Shangri-La as the property manager and hotel operator,” said Mr Simister. “They will also earn rental revenue when not staying at their homes.”

The villas are being sold on a leasehold basis in accordance with both current and proposed foreign ownership laws in Thailand.

Shangri-La’s Phuket Resort and Spa is located at the Layan end of Bang Tao beach on Phuket’s prestigious west coast. This area is a ‘hidden gem’ in Phuket and considered to be one of the best beaches in Bang Tao bay. The resort is also conveniently located just 25 minutes from Phuket International Airport.

Villa owners will benefit from the resort’s wide selection of restaurants and recreational facilities such as health club, tennis courts, water sports, kids’ club, entertainment centre, three swimming pools and Shangri-La’s signature spa brand ‘CHI’. This will be located in its own spa village with private residential spa treatment villas. Inspired by the legend of Shangri-La, CHI offers treatments based on ancient Chinese and Himalayan healing rituals and traditions.

CBRE estimates that well-managed rental properties in Phuket produce annual returns of 6-8 per cent a year. In addition, Phuket also continues to offer buyers the potential for capital appreciation.

“Early buyers can secure a great value substantial villa, competitive in all respects including specification, brand and price, compared to anything on the market,” said Mr Simister.

Phuket is Asia’s premium residential resort market and attracts increasing numbers of global buyers in search of stunning properties, exceptional locations and guaranteed privacy.

International hospitals and schools enhance the island’s appeal. Within half an hour of Shangri-La’s Phuket Resort and Spa are three marinas and six golf courses, including Blue Canyon Country Club, ranked amongst the best in Asia.

Source: ETravelBlackBoard

Global investment in real estate may increase 26 percent to US$600 billion this year

2007-06-19T20:44:00.000-07:00

Global investment in real estate may increase 26 percent to US$600 billion this year as investors chase stable returns, according to a report published Wednesday by Jones Lang LaSalle Inc.

Investment in the first half amounted to US$290 billion, with spending in Germany and Japan almost doubling, said Jones Lang LaSalle, the world’s second-largest publicly traded real estate brokerage. Investment in the Americas rose to US$129 billion, followed by US$117 billion in Europe and US$43 billion in Asia.

“Across the world, fund managers are receiving record fund inflows as populations in developed countries approach retirement age,” Tony Horrell, head of Jones Lang’s international capital group in London, said in the statement. “Many of these funds are attracted by real estate’s strong stable returns.”

Investors are buying more shops, offices, hotels and industrial properties to broaden their range of assets. Banks such as Goldman Sachs Group Inc. and other buyers are targeting countries such as Germany and Japan, where property returns have lagged behind markets such as the U.K. and Ireland.

Real estate investment is becoming increasingly global with US$128 billion, or 44 percent of all investment, spent on cross- border transactions in the first half, said Jones Lang. That was 69 percent higher than in the same period a year ago, it said.

Inter-regional spending, involving investors from outside the region where the asset is located, rose 68 percent to US$90 billion, or 31 percent of total spending, from a year earlier, Jones Lang Lasalle said.

“In relative terms, the globalization of real estate investment has had the greatest impact on developing markets, said Horrell. “In Central Europe and some Asian and Latin American markets, inter-regional investors are purchasing the majority of available prime quality stock.”

The U.S. accounted for 43 percent of all investment in the first half compared with 45 percent a year earlier. The U.K., home to the world’s most expensive offices, slid to a 14 percent share from 20 percent in 2005.

Inter-regional investment in the Americas more than doubled to US$33.5 billion, with Middle Eastern investors, buoyed by surging oil prices, accounting for 14 percent of international spending. The U.S. accounted for 96 percent of all investment in the region, with New York, San Francisco, Chicago and Boston the most popular cities for non-U.S. purchasers.

Global investors spent more than US$9.5 billion on U.S. hotels in the first half, in addition to “sizable” office and industrial property purchases, said Jones Lang.

The share of investment going to Germany doubled to 8 percent, with global investors buying more than 40 percent of all the German commercial real estate that was traded in the first half. Transactions in Germany in the first half almost equaled the total for the whole of 2005 as German investors sold a net US$24 billion of assets.

Japan accounted for 8 percent of all real estate investment, up from 5 percent a year earlier. Investment in Japan accounted for half of all spending in Asia compared with 35 percent in the same period in 2005. Investment in Asia as a whole rose 40 percent from a year earlier.

Jones Lang’s total excluded the US$30 billion spent privatizing publicly traded real estate investment trusts such as Trizec Properties Inc., as well US$16 billion on developments funded in advance and more than US$60 billion on residential apartments.

Global real estate investment has never had it this good

2007-06-19T20:38:00.000-07:00

Global real estate investment has never had it this good according to the new Jones Lang LaSalle report “Moving Further and Faster”.

2006 experienced record level volumes of global real estate investment with a 40% increase in investments in 2006 from 2005 amounting to a record $900billion total investment. The lion’s share of global real estate investment continues to be traditionally commercial real estate which accounted for $682billion in 2006, a surge of 38% over 2005, and nearly double 2003 volumes.

Cross border transactions now represent 42% of total investment volumes which has grown by 34% from 2005 levels. Inter-regional investments grew from 23% in 2005 to 29% in 2006.

The breakdown of the $900 billion global real estate investment in 2006 is as follows:

* Direct commercial real estate investments accounted for $682billion,
* Investors privatised REITs and other listed real estate owning entities totalled $48bn,
* and purchased multi-family residential investments totalled $170 billion.

According to the CEO of Jones Lang LaSalle’s International Capital Group, Tony Horrell, “Global real estate markets performed very strongly throughout 2006; it was the first year that all major developed and emerging market returns were both aligned and positive. Investment was driven by increased allocations to the asset class, growth in investible stock and by the increased attention of opportunistic private equity players who identified relative value in the sector. These increased flows into real estate gave rise to two notable phenomena in 2006 – an increasing number of ‘mega-deals’, and continued globalisation of the asset class.” Horrell also pointed out the collective rise of 240% (US£39billion) in Global funds invested in the US, UK & Japan.

* Global funds dominated the German market in particular, purchasing 40 percent (by value) of all German commercial property traded.
* US investors expended $18billion in the UK, France & Germany (a 51% increase).
* UK investors spent $18billion principally in Germany (an increase of a staggering 200%)
* Middle Eastern investors spent about $13billion principally in the US, UK, Germany & South Africa (a 14% increase)
* And Australian investors spent $12bn, principally in Germany and the UK

Horrell added: “Germany’s relative attractiveness has increased significantly due to a unique combination of willing domestic sellers, underweight cross-border investors, positive yield spreads and a recovering economy. Japan offers investors exposure to a recovering economy and yield spreads of almost 200bps”.
According to Padraig Brown, Global Strategy and Research Director at Jones Lang LaSalle, “Emerging markets had a strong year with over $40bn of transactions recorded (up 74%). Many of these markets have appeared on investor’s radars only recently and are exhibiting exhilarating rates of growth, with the Russian market expanding by over 700% during 2006 and strong deal flow in China, Turkey, Mexico and Brazil.”

“Real estate fundamentals remain strong, with solid economic growth projected, vacancy rates remaining low in most major markets, and development pipelines remaining modest. Rental growth should help support recent yield compression, however investors should note that the pricing differential between prime and secondary product and markets has been lowered and ensure that risks are sufficiently factored into bid prices.”
Regional Highlights: Europe

* Europe became the world’s most active real estate investment market in 2006 with $305billion invested in the region in 2006 (a 44 % increase from 2005)
* There was a distinct shift in the UK’s long term dominance of the European market in 2006 were total transactions amounted to US$101bn (4% below 2005) with investment volumes increasing strongly in both Germany and France.
* Germany was the major global real estate story of 2006. A combination of willing domestic sellers, aggressive cross-border investors, positive yield spreads and a recovering economy resulted in transactions totalling US$62bn - growth of over 140% in constant currency terms. The German market now accounts for 20% of European volumes (up from 12%).
* The French investment market grew by 70% to $30bn or 10% of European volumes (up from 8%).

Regional Highlights: North and South America

* Real estate investments in North and South America were US$283bn in 2006, up 31 %.
* Cross-border investment represented 25 % of total investment (up from 16 % in 2005) and inter-regional investment reached 22 % of total investment (15 % in 2005).
* Investment markets in the Americas region are overwhelmingly located in the U.S. (96% of the region’s transactions by value, and 40% of global investment).
* Other investment markets include Canada and the rapidly growing cross-border markets of Latin America – dominated by Mexico and Brazil.

Regional Highlights:Asia

* Real estate investments in Asia in 2006 were $94bn, up 41 %.
* Cross-border investment represented 32 % of total investment (up from 29 % in 2005) and inter-regional investment was 22 % of total investment (18 % in 2005).
* Japan’s resurgence dominated the Asia Pacific market where transaction volumes surged 128% to US$52bn – 55% of total investment in the region.
* Yield spreads were guaranteed for investors in Japan due to its interest rates which remain the world’s lowest.

Thailand Court Creates `Buying Opportunity' Ahead of Election

2007-06-19T19:19:00.000-07:00

Thailand's stocks, Southeast Asia's worst performers this year, staged their biggest two-day rally this year after a court ruling on May 30 paved the way for a national election. More gains are likely, history shows.

``All of these worries about politics are a great buying opportunity,'' said Doug Barnett, a 51-year-old fund manager who's been investing in Thailand since 1990. His Thai Focused Equity Fund Ltd., a $300 million hedge fund, includes Banpu Pcl, the nation's largest coal miner, and Bank of Ayudhya Pcl, the sixth-largest bank by assets.

Thailand has been ruled by a military-installed government since a Sept. 19 coup ousted Thaksin Shinawatra as premier on charges of corruption. A military-appointed court banned Thaksin's party and acquitted the country's second-largest political group of wrongdoing in last year's election, which was later nullified by a court.

The benchmark SET Index rose an average of 6.4 percent in the three months preceding the past five elections, ending in 1992. It then climbed a further 3.6 percent in the following month, on average. The last time that civilian government returned after a coup, in 1992, the SET rose 17 percent over the four months.

Asia's lowest valuations are also helping draw investors this time. Shares on the SET are valued at an average 10 times next year's earnings, the least among 14 Asia-Pacific markets tracked by Bloomberg. Overseas investors have purchased about 20 billion baht ($571 million) more of Thai shares than they sold since the court ruling.

`Very Cheap'
``Thailand is very cheap now, and it looks like it's worth the risk,'' said Jorry Noeddekaer, who helps manage about $1.5 billion of Asian stocks at New Star Asset Management Ltd. in London. ``I see the market performing pretty well.''

In the past few weeks, he's bought shares of commercial banks, which he declined to name, in the fund's first purchases in five months. New Star sold all its Thai shares in December, when the central bank imposed capital restrictions on overseas investors to curb currency speculation. They were lifted two days later.

The SET rose 4.5 percent in the two trading days following the May 30 ruling. PTT Pcl, the country's biggest energy company and its most valuable, and Siam Cement Pcl, the largest building-material maker, contributed the most to the gain. Both are based in Bangkok. The index closed yesterday at 726.60.

Beaten
Still, benchmarks in Indonesia, Malaysia, the Philippines, Singapore and Vietnam have all beaten the SET this year, setting new highs along the way. The Thai index would need to more than double to reach its 1994 record of 1753.73.

The SET may rise about 33 percent to 1,000 next year because the court's verdict has reduced the risk of owning Thai shares, Poramet Tongbua, head of research at Tisco Securities Ltd., wrote in a June 1 report. The SET hasn't closed at 1,000 since November 1996.

His share recommendations include Kasikornbank Pcl, the country's No. 2 publicly traded lender, and PTT Exploration & Production Pcl, the second-biggest natural gas producer, both in Bangkok.

ABN Amro NV raised its recommendation on Thai shares to ``overweight'' from ``underweight,'' saying an election will restore peace to the country while lower interest rates will boost spending, according to a June 8 report.
The military-appointed Constitutional Tribunal decided not to prevent all major leaders from the country's two largest political groups from seeking office, allaying investor concerns that they would be banned from running in this year's planned December election.

Election Plans
The court acquitted the Democrat Party, the nation's second-largest political group, of violating laws in last year's nullified vote. It dissolved Thai Rak Thai, the party founded by Thaksin, and banned 111 party executives, including Thaksin, from politics.

The government lifted a ban on political parties' campaigning and allowed remaining groups to meet voters, hold meetings and engage in other activities starting June 5.
Prime Minister Surayud Chulanont has pledged to hold a constitutional referendum later this year and have elections on either Dec. 16 or 23.

``Once we get to a definite date, sentiment will pick up,'' said Adithep Vanabriksha, head of Thai equities at Aberdeen Asset Management Co., which oversees $2 billion in Bangkok including Siam Cement and PTT Exploration. ``That will be the single most important event.''

Keith Neruda, head of research at UBS Securities (Thailand) Ltd., isn't convinced now is the time to buy.

``We do not believe the Constitutional Tribunal's ruling has meaningfully lowered political or legal uncertainty in Thailand,'' he said in a June 5 note. ``If anything, it increases the risk that the next general election will be deemed illegitimate and drag out the process even further.''

Risks Remain
About 10,000 people rallied on June 9 in the nation's capital, demanding the resignation of coup leader Sondhi Boonyarataklin, the Bangkok Post reported June 10. Political unrest may escalate should Thaksin return to Thailand to contest a court-appointed committee's decision to freeze his assets, said Sin Beng Ong, an economist at JPMorgan Chase & Co. in Singapore. The SET dropped 2.3 percent yesterday to its lowest since May 25.

Those political concerns may give way to economic success as the government loosens its purse strings and low interest rates encourage spending.

Military leaders who scrapped a Thaksin plan to spend about 1.7 trillion baht on construction projects are starting to free up cash for investment, with the Cabinet having last month approved a 13 billion baht mass-transit railway.

The central bank has lowered its key interest rate by about 1.5 percentage points to 3.5 percent this year, in a bid to boost consumer spending. And the government reported last week Southeast Asia's second-biggest economy expanded 4.3 percent from a year earlier in the first quarter, more than the 3.7 percent growth forecast by economists in a Bloomberg survey.

``As consumers start to feel a bit more optimistic, as the politics starts to becomes less important and some normality becomes more likely to return, there's a lot of potential pent- up demand,'' said Stewart Paterson, joint managing director of Singapore-based Riley Paterson Investment Management, which invests as much as $300 million in Asian equities including Thai stocks. ``There is a very clear electoral cycle.''

Source: Bloomberg

CHATUCHAK PARK, Bangkok - Mall to replace part of market

2007-06-19T19:12:00.001-07:00

Five-storey shopping centre and carpark scheduled to open in second quarter 2008

A new property-development company has announced plans to develop a 1.6-hectare section of the Chatuchak Sunday Market into a five-storey retail mall and carpark.

The company, Thanasarnsombat Pattana, plans to spend Bt1.5 billion on the project, to be called the Sunday Mall. Completion is scheduled for next year's second quarter and it will occupy a small portion of the total 30.4 hectares of Chatuchak Market, opposite the Children's Discovery Museum.

Company president Rattana Torsutkanok said the project would generate up to Bt2 billion annually within the 12-year term of the company's lease contract with the State Railway of Thailand (SRT). Up to 70 per cent of the initial investment will come from the company's capital and cash, and the rest will be borrowed from Krung Thai and TMB banks.

Revenues are expected to cover the investment within three years.

Thanasarnsombat Pattana currently has registered capital of Bt10 million, but the company's shareholders will meet next week to increase that to Bt100 million.

Rattana, who owns a pet and pet-accessories import-export company called LP Aquarium, owns half of Thanasarnsombat Pattana. Five of her friends own the rest. Rattana also owned a pet shop in the Chatuchak Sunday Market before establishing Thanasarnsombat Pattana three years ago with the intention of securing the lease deal with the SRT, following the fall into bankruptcy of the earlier Sunday Market operator, Sunday Holding.

Last year, the Sunday Market's existing tenants resisted Thanasarnsombat Pattana's plans when the company attempted to lift existing structures off the 1.6-hectare plot and begin development of its Sunday Mall.

Rattana said the company now had the approval of existing Sunday Market tenants, who have been offered retail bookings on the ground floor of the new mall, which will be a pet-shop area. Construction will begin this year, and the occupancy rate of the new mall is already 50 per cent, following forward bookings.

She said the company also had a list of 300 retailers - many of them from the Suan Lum Night Bazaar and Chatuchak Sunday Market - interested in booking retail space in the project.

The company's 12-year lease agreement with the SRT involves payment of Bt300 million over its full term. Payments began with Bt30 million last year. The company also has the right to renew the lease for a further period.

The Sunday Mall will have five floors and a total floor space 47,000 square metres. Of this, 20,000 square metres will be retail space and the rest a carpark. The ground floor will be a pet-shop area, and 50 per cent of its space is already booked.

The second floor will have a shopping mall and chain restaurants, and the third floor will contain a food court.

The fourth and fifth floors will be a carpark.

The company will also set up an open outdoor auto-sales area with room for up to 200 cars.

Source: The Nation

Thailand's Resident Selling Last Private Island Off San Francisco Bay

2007-06-19T18:54:00.000-07:00

Man in Thailand selling last private island off San Francisco

If you've ever wanted to own a piece of San Francisco Bay, now's your chance. Red Rock, the only privately owned island in the bay, is up for sale.

A Bangkok gem dealer and attorney, David Glickman, wants ten (m) million dollars for the five-point-eight-acre, uninhabited island in the shadow of the Richmond-San Rafael Bridge.

Glickman, who is 78, says he isn't going to live much longer and wants to leave his wife in good shape financially.

Red Rock Island, which gets its name from the reddish-brown color of its soil, was privately purchased in the 1920s. After a few owners, Glickman, then practicing law in San Francisco, bought it sight unseen in 1964 for $49,500.

It is about eight miles north of San Francisco's Fisherman's Wharf at a point where the San Francisco, Marin and Contra Costa counties converge.

Any new owner who wanted to develop the island would also have to spend extra money and go through an approval process involving state agencies in one or more of the three counties that have jurisdiction over the island.

Source: Associated Press

Hotels: Lofty Ambitions, an interview with Starwood

2007-06-19T10:32:00.000-07:00

Starwood has high aspirations for aloft with a target of 150 hotels in Asia Pacific by 2009; an interview with the brand’s boss Brian McGuinness, and the man who is spearheading its development in the region, Tom Monahan.

Why does the industry need another brand?

Monahan: Starwood has always been strong in upper-upscale and luxury hotels where all our other brands are, but we didn’t have anything in the upper-midscale category.

Globally, and certainly in Asia Pacific, we saw this as an opportunity to grow.

It will also help us attract a different guest than we normally get. Research among our Starwood Preferred Guest members showed they were spending one million room nights in other branded accommodation in North America alone.

So these are nights that are lost to you?

Monahan: Yes, that’s right, pretty much, and if you look at the Asia Pacific landscape of hotels, I believe aloft will be the first pure select-serve product.

Aloft is really for the more self-sufficient type of traveller, and this enables us to put together a “box” that is very economical for developers to build. We’re trying to attract a certain type of consumer and give them something they like, while making it much more economical for the developer.

McGuinness: Our brands were so focused in one tier that it didn’t allow us to flow customers through their own life-cycles. A typical hotel customer has the ability to move up from the budget-hotel sector and upgrade as their careers progress until they eventually prefer one specific brand that fits their lifestyle. This gives us an opportunity to really attract and catch customers at an even earlier age – aloft, with its greater consciousness towards design and elements aimed at those new-age customers, will appeal to a younger demographic.

The brand’s affiliation to W and Westin will allow us move them to a select-service brand where they will pay a higher rate but get far more for their money at a juncture in their life when they can afford it and really want that level of service.

When will the first alofts open?

Monahan: The first will open in 2008 in the US, and the first in Asia will open in Beijing in 2009. Our global footprint is 500 hotels by 2012. We’re talking about 150 in Asia and we aim to sign 70 by the end of 2009.

What are these figures based on – wishful thinking or feedback from developers?

Monahan: It’s feedback from the developers and our understanding of the growth for the markets. Our target of 500 hotels might sound a lot, but here’s a spectacular fact: we now have more hotels under development in China than we currently operate.

If you look at China alone, every major city has the potential for at least one aloft hotel. In markets like Beijing and Shanghai, you can easily subdivide the cbd into six or seven locations than could accommodate an aloft hotel. So it won’t take long to get to 120-150 hotels across the region. Also, we are working with developers who have the capability to build multiple properties.

There’s not much point in a major blue-chip developer building one 150-room hotel – you have to be thinking five, 10 or 15 properties with major developers.

From our discussions with developers, there is a very strong interest and intent to start with three or four properties and then roll out 15, so there will be a wave of activity over the next few years.

One developer we met with recently has plans for 15-20, and he’ll build five at a time.

So, to answer the question: we have very strong and ambitious leadership in White Plains [Starwood headquarters] and the confidence that 500 hotels worldwide and 120 in Asia Pacific is well achievable.

Where are you looking in Asia Pacific?

Monahan: The core focus of our efforts now is China, India, Thailand, Singapore and Australia. The rationale for that focus is that we have strong specific demand from developers and owners of existing Starwood properties, and we are ready to roll out.

There is also great market potential in Japan and Korea and other markets but, in terms of speed of access of getting properties open, those will take a little longer. Hong Kong is certainly a market where aloft as a product would work well but, again, getting the right site in terms of cost of access is a little harder.

What revpar are you aiming for?

Monahan: The typical average rate will range from us$80 in core China markets to us$130-us$140 in strong locations in Australia, so the average will come in at around us$100 across the marketplace.

If you’ve got a lifestyle product with great flexibility on rates absolutely slap bang in the middle of a major city, you can compete with higher-end product. In a secondary location, we can still be profitable with a competitive local rate.

What is the aloft demographic?

McGuinness: We envision 20-30 years of age, maybe 20-40, with the sweet spot being about 36.

What’s the essence of the brand?

McGuinness: It’s a fun, vibrant, energetic product. Wheth--er the guest is there on business or leisure, he can get things done in a comfortable and efficient manner, while feeling an energy in the building.

The W team really brought that fun, vibrant essence to the upscale market, making it a more affordable and reachable product, recognising those travellers are into iPods and designer goods. It doesn’t have to be expensive, it just needs to be good – a lifestyle statement.

The same team that was behind W is also behind aloft and there are many connections, particularly in the service style, that will come across from W into aloft.

It’s not just a physical product – it’s something that comes through from the training and the attitude of the staff to the guests so they are able to really help and interact with the guests as they experience the product.

What about staffing levels?

McGuinness: We have 45 full time employees in a 155-unit prototype. So it’s very efficient compared to a full-service operation. As mentioned before, the training of those 45 is very critical as a lot of them are actually facing guests.

What we see in our strongest properties worldwide across Starwood is that guests come back for the people more than anything else, so training is absolutely critical for the aloft brand.

We have extensive training manuals detailing everything from the hiring to the training of each position in a property so we can be sure when we open a new property that we are really delivering the experience to the guests rather than just giving them a box to check in and out of. The software, the people, are core to everything we do.

How much input did developers have when you were coming up with the concept?

McGuinness: The development board of advisers brought in premier, mid- and upscale developers from across North America and asked them what they actually wanted from a development, and we learned a lot from those experiences.

In Asia Pacific, we’ve talked on a one-to-one basis to developers in each market, many of whom are existing owners of Starwood hotels.

We’ve said, “Here’s a concept, here’s a product – how would you build it?”

The preferred construction method, for example, in Southeast Asia is a poured-concrete format, so obviously the construction and plans need to be geared to that, rather than the precasting format favoured in North America and Australia.

We’ve taken all that into account, plus the operating and staff requirements, so we are ready with a product in Asia Pacific which addresses the needs of the developers and the consumers in this market.

What is the cost of putting together an aloft room, compared to a room of comparable size in a standard hotel?

Monahan: We’ve gone through comprehensive costing of aloft models in Asia Pacific core markets, but I cannot give a direct comparison because we haven’t done the same thing for a Westin or Sheraton hotel.

But the range of cost across the Southeast Asian market [excluding Australia] is from us$65,000 to us$80,000 per room for standard prototypes, ready to operate, including all ff&e and small operating equipment.

We’ve looked at this from a developer’s viewpoint, and it’s considerably more cost effective.

We are hearing from developers that this is one of the few concepts – if not the only concept – in new-build hotels that really can deliver a consistent profit that is comparable to other real-estate classes.

At the end of the day, they have to get return on their money, and we’re confident we can deliver that.

Will development in the region be driven by new builds?

McGuinness: We’ve looked at the experience of some of our competitors in this market segment and, frankly, some of our own experiences with Starwood brands and found there’s a history of brands being compromised by taking old hotels and trying to make them into something different.

While we haven’t completely discounted the possibility of conversion if the right property comes up, from deals we’ve looked at so far, we’ve found it makes most sense to go for pure new build. It allows us to roll out with exactly the product we want.

By the time you’ve gone through renovation to an existing city hotel, the cost of doing that is very near that of a new build anyway – then you’ve got all the additional design costs, as well.

We’ve looked at three conversion opportunities in the region, and the key elements are the shape of the room and ceiling height.

These are core elements in aloft hotels, and we need to make sure we can re-create the room in a conversion. One of the challenges we see in a conversion is that there is often too much public space – what are you going to do if you don’t want five restaurants, which a lot of these old hotels have?

The aloft economic model would not work in such cases.

What’s the ideal number of keys for an aloft?

McGuinness: The standard prototype for a seven-storey model is 155, and that works very well for the public space we have.

Is the concept adaptable to changing technology and trends?

McGuinness: Everything is completely scalable to future technology, and we’re dropping three data cables into every room. We don’t need them today but, for example, the traditional coaxial cable for cable tv will eventually disappear as tvs become more dynamic, and we’ll be prepared for that.

Is there flexibility for owners to inject some local flavour into their aloft hotels?

Monahan: There are core elements to the product that we want to make certain are there, but if a developer wanted to localise or regionalise his hotels, we could certainly work with him on that.

You appear to have a niche product just waiting to be developed. What comments have you received from developers?

McGuinness: Developers have come to us saying: “This is exactly what we’ve been looking for”.

They’ve had experience with luxury hotels and they don’t want to do anymore of that as their sites, land and mixed-use developments simply don’t support a luxury hotel.

They also appreciate, based on past experience, Starwood can put up to half the business into their properties. They’re saying: “If you say you can deliver to this level, we’ll trust you on it.”q

The first aloft in the region is scheduled to open in 2009 in Beijing. The aloft Beijing, Haidian, owned by Beijing Yongtai Hotel Management, will include 200 guestrooms, 3,900 square feet of meeting space, and three restaurants including re:fuel by aloft, a one-stop f&b area, offering sweet, savoury and healthy food, snacks and beverages to grab-and-go 24-hours a day.

“We have worked closely with key developers and guests across Asia Pacific to customise our prototype and signature features specifically for this market, to create an efficient product that guests will love,” says Ross Klein, President, W Hotels Worldwide and the aloft brand.

“We are excited to be introducing aloft to Beijing and are looking forward to introducing more aloft hotels to other cities in the Asia Pacific region.”

The hotel will be part of an integrated mixed-use complex, including offices, residential buildings and the recently signed Four Points by Sheraton Beijing, Haidian.

“The team in North America spent a lot of time talking to developers and consumers to get a product spec that really meets our requirements,” says Starwood vp Brian McGuinness, who is responsible for driving the aloft concept.

“For the consumers, it does what they need it to do, and no more.

“So when we looked at the design, rather than looking at it from the traditional hotel mentality, we looked at it from a developer’s perspective and actually talked to people who build a broad range of types of property across North America, and now in Asia Pacific.

“We said, ‘Well, how do we build this guestroom; what makes it expensive to build this room?’

“The bed backboard, for example, is made up of eight pieces that can fit into a standard elevator. The hard wall for the bathroom is actually only a small section, the rest of it is actually the back side of the headboard. A modestly skilled team can come in, very quickly screw together the eight pieces of the bed and then move onto the next one. You get away from the time and expense of all the carpentry and cabinetry that usually goes on.

“Everything comes in pre-wired, and is very simple. The electricity and dataport connections are right next to the bed and in the work area. Windows face a particular way so that the bed faces the light, and the flat-panel screen goes between the oversized windows.

“The carpet is 12 feet across, single roll – you just roll it out, and there’s no wastage.

“The technology in the room is designed so that when things are updated and upgraded you don’t have to pull out all the cabling.

“One telephone is cordless and positioned next to the bed, so you don’t have to put in additional wiring, and the plug-and-play system features a docking station for guests to plug in their mp3 players or laptops.

“It’s smart technology, but it doesn’t have to be very expensive in terms of the installation or upgrade.”

“Our mission with aloft is to bring style, convenience and a social environment to an otherwise tired, lonely experience, all at a great price,” says Ross Klein, president of W Hotels Worldwide and the aloft brand.

Tagged a Vision of W Hotels, the aloft brand aims to shake up the lodging industry with urban-influenced design, accessible technology, style and a social atmosphere.

aloft is claimed to offer a “total sensory experience”, with guestrooms featuring loft-like nine-foot ceilings and oversized windows to create a bright, airy environment.

The centrepiece of the aloft room is a signature bed, together with large stylish bathrooms with oversized walk-in showers and amenities created by bliss spa.

Each guestroom is also a combination high-tech office and entertainment centre, featuring wireless internet access, plug-and-play, and one-stop connectivity for multiple electronic gadgetry such as pdas, cell phones, mp3 players and laptops – all linked to a large flat panel hdtv-ready tv.

Following its W heritage, aloft hotels will feature “atmospheric public spaces” designed to draw guests from their rooms to socialise and make friends.

Other facilities include the re:mix communal lobby area, bar w xyz, re:charge fitness centre and splash, an indoor pool.

Source: Hotel Asia Pacific magazine

Thailand's free-falling economy

2007-06-19T09:15:00.000-07:00

By Edward Russell

BANGKOK - Thailand's economy is fast decelerating, representing a volatile new complication to the country's already uncertain political situation and a significant risk to its overall global competitiveness.

A series of policy missteps have badly undermined foreign-investor confidence in the military-appointed government's economic stewardship, including the imposition of capital controls on foreign currency, equity and bond transactions, proposed nationalistic amendments to the Foreign Business Act, and the nationalization of foreign-held media assets.

Now recent economic statistics show that local investors and businesses are equally concerned about the country's economic direction under military rule. Headline economic growth fell year on year from 6.1% in the first quarter of 2006 to 4.3% in the same quarter this year. Most telling, private investment contracted in the first quarter of this year for the first time since 2001, falling 2.4% year on year.

Private consumption fell to its lowest level since the second quarter of 1999, contracting for both durable goods and services, according to recent Phatra Securities research. Meanwhile, James Pitchon, executive director of the international real-estate firm CB Richard Ellis in Bangkok, says year-on-year take-up of office space in the capital city was down 60% last year.

The economic slippage represents the latest mark on the military's tumultuous nine-month record. Upon seizing power in a coup last year from prime minister Thaksin Shinawatra, the now-ruling Council for National Security (CNS) quickly moved to distance itself from the former premier's high-octane economic policies, which included aggressive state-bank lending and ambitious infrastructure development.

Rather than ramping up growth, the CNS declared its intention to put the economy on what it referred to as a more sustainable growth trajectory. Toward that end, the military-appointed government put on ice several of the US$43 billion worth of megaprojects Thaksin had designed to pump up the local economy in anticipation of slowing global demand for Thai exports and a cyclical downturn in the housing market.

Despite last year's 17% appreciation of the Thai currency, the baht, against the US dollar, Thai exports had performed strongly, expanding more than 17% year on year in 2006. That strong trend has continued into 2007, accounting for a $5.5 billion current-account surplus in the first quarter.

To date, those surpluses have provided Thailand's ruling generals with a financial cushion from souring foreign-investor sentiment. However, exports are expected to soften significantly in the coming months, witnessed in the meager $400 million current-account surplus recorded in April, meaning the economy must soon find growth from other sources to avoid a slide into recession. (Exports contribute more than 65% of Thailand's total gross domestic product.)

There is a significant political risk to a further decline in the local economy. Bangkok's business elite largely supported the military's move to oust Thaksin, whose government was perceived by many foreign and local investors as corrupt. However, few foresaw the military-appointed government's nationalistic approach to economic policy, which has alienated big foreign investors.

So far, public-opinion polls show that Bangkok residents still support the interim government, but that could change quickly if the economy slips deeper into the doldrums. In an apparent policy shift, Prime Minister Surayud Chulanont's government is rushing to fill the economic gap through more state spending, which increased about 11% year on year in the first quarter.

That pump-priming has so far failed to stimulate investment growth, as most of the disbursements went toward bureaucracy salaries and state-enterprise expenditures. According to Phatra Securities research, central and local government spending actually fell by 0.3% year on year in the first quarter, after expanding 12.7% in the fourth quarter of 2006.

Bottlenecks and gridlock
According to some economic analysts, Thailand's grinding political conflict and its now-apparent attendant economic slowdown are starting to impact on the country's overall competitiveness. Central to those concerns are lagging infrastructure-development plans and mounting foreign-investor reluctance to contribute funds to military-approved projects.

A 2006 World Bank report identified deficient infrastructure as one of the top three competitiveness concerns for Thai firms. Thai business leaders consistently acknowledge the need to improve infrastructure to keep costs low and remain globally competitive. In recent years, basic transportation logistics are as much as twice as high in Thailand than in many developed countries, weighing against the country's overall competitiveness.

The previous government reached out to foreign investors to help manage and finance its various infrastructure-development plans. However, at a March meeting attended by several Thailand-based foreign business leaders, once-upbeat investor sentiment on Thai infrastructure projects had soured since last year's coup and change in government.

Many investors at the meeting cited the uncertainty surrounding the foreign-investment regulatory regime, including what they perceive to be recent nationalistic revisions to the Foreign Business Act, for dampening their sentiments.

To be sure, a handful of big-ticket infrastructure projects are already under way. In Bangkok, construction on five mass-transit rail lines, one so-called bus-rapid-transit line, and the final section of the city's outer ring road, which includes two soaring suspension bridges, are currently on track. An additional 137 kilometers of mass-transit trains are now in the final planning stages and, if completed on time, would push mass transit beyond central Bangkok into the suburbs by 2013.

In the provinces, road construction is proceeding on the Association of Southeast Asian Nations highway links, including east-west and north-south corridors designed to interconnect the Indochina region with China and pave the way for more efficient regional trade. Last December, a vital piece of the east-west link opened with the completion of the second Thai-Laos Friendship Bridge.

And the freshly paved Highway 331 will more efficiently connect industrial parks to the country's largest deepsea port at Laem Chabang along the eastern seaboard. The port also has plans to increase its capacity from 6.6 million twenty-foot equivalent units to 13.3 million TEU by 2011.

Yet so far those projects have not been enough to revive broad investor, business and consumer sentiment, including crucially in the manufacturing and real-estate sectors. Economists note that road construction was a primary investment driver in the 1980s and into the early1990s, when Thailand was still one of the world's fastest-growing economies.

Now, economic analysts contend that the country needs new or upgraded highways and flyovers all over the country to maintain fast economic growth. And while infrastructure bottlenecks will not single-handedly downgrade Thailand in the eyes of Asia-destined foreign investors, the military-appointed government's nationalistic policy signals have.

Central bank governor Tarisa Watanagase was quoted saying vaguely at a recent presentation on the country's investment climate since the coup that the recent "confluence of events" was a "cause for concern". She was speaking to the still-unresolved political crisis pitting the military versus Thaksin's disfranchised supporters.

Now a fast-slowing economy threatens to accentuate and complicate those political divisions.

Edward Russell is a Bangkok-based freelance journalist.

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