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

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

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

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

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

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

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

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

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

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

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