Bangkok Condominium Market Report Q3 2012

Q3 2012 | Condominium

thailand

Bangkok Condominium Market REPORT Bangkok Condominium Market Executive Summary Prices for Bangkok condominiums are rising as a shortage of construction workers puts a brake on development.

Around 8,600 units were launched in the third quarter of this year, a drop of around 13% from the previous quarter. Around 20% of those launched were in and around central Bangkok.

Although many projects were due to be finished in 2012, the lack of construction workers threatens to delay some until next year. market indicators Q2 2012 - Q3 2012 new Supply LAUNCHES PRICES

Despite that, 2012 is still on track to see more condominium launches than last year, and the average take-up rate in Bangkok for newly launched units in Q3 2012 was around 64%, a higher rate than in the previous quarter. Several developers are turning to smaller, low rise condominium projects on smaller sois as land in the city becomes more expensive.

Some listed developers are expanding to other provinces in Thailand, especially to main cities, where local people have welcomed them. Big name developers are also looking for new markets outside of Thailand, especially in ASEAN countries.

TAKE-UP

Newly launched condominium units during 2011-Q3 2012 by quarter

Source: Colliers International Thailand Research

The number of new launches for Q3 2012 dropped from the previous quarter by around

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13%. Approximately 8,600 units were launched in Q3, compared to around 9,920 in Q2 2012.

Bangkok condominium Market REPORT | Q3 2012 Newly launched condominium units in Q3 2012 by location

Source : Colliers International Thailand Research

More than 54% of the 8,600units launched in Q3 were in urban Bangkok, and of those approximately 1,760 units or 20% of the total, were in the City area. The Northern Fringe area was second with nearly 1,200 units.

Approximately 880 units, around 50% of all Q3 launches in the City area, are along Sukhumvit Road.

Additional Supply by Quarter

Source: Department of Land, Colliers International Thailand Research Note: The number of units does not include projects from the National Housing Authority

Approximately 7,790 new condominium units were completed and registered at the Department of Land in Q3 2012. The total number for the whole of Bangkok was around 343,100. Construction labour shortage

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is the main obstacle for condominium projects in Bangkok, and many are unlikely to finish on schedule.

Bangkok condominium Market REPORT | Q3 2012 Total Historical Supply by Location to Q3 2012

Source: Department of Land, Colliers International Thailand Research

More than 213,600 condominium units, around 62% of the total supply in Bangkok, are located in Suburban Bangkok. Within Urban Bangkok, the Northern Fringe contains the most number of units due to its proximity to the business district in the city centre, as well as its mass transit

connections and relatively lower land prices compared to the City. The Outer City areas are seeing increased activity due to the extension of the BTS across the Chao Phra Ya River and further along Sukhumvit Road towards Samut Prakarn.

Future Supply – Urban Bangkok Cumulative future supply scheduled to be completed from Q4 2012 to 2014 by location in urban Bangkok, Q3 2012

Source: Colliers International Thailand Research Note: Supply does not included units in Suburban Bangkok

Approximately 26,000 units are due for completion in Urban Bangkok during the last three months of 2012. Nearly 10,100 of those are in the Northern Fringe, followed by the City area with around 4,580 units. More than 27,900 units also expected to complete in 2012 in suburban

Bangkok. Developers schedule project completion dates themselves, but many condominium projects will in fact miss their schedules and be delayed until next year, due to the lack of construction workers.

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Bangkok condominium Market REPORT | Q3 2012 Take-up Average sales proportion of newly launched units in Q3 2012

Source: Colliers International Thailand Research

Bangkok’s average Q3 2012 take-up rate for newly launched units is approximately 64%.The average take up rate in the City area is approximately 84%, the highest this quarter. Some condominiums in the

City area have quickly sold out, due to their proximity to BTS stations and quality of the projects, despite an average price of more than THB110,000 per sq m.

Launches with high-take up rates in Q3 2012

Sansiri Plc. launched their first ready-to-move-in project on Sukhumvit Soi 31 in the City area. Via Sukhumvit 31 contains 88 units and has a high take-up rate. The project comprises one - to - three - bedroom units from 46 square metres to around 125 sq m.

The Circle S Sukhumvit 12 by Fragrant Property Co.,Ltd. was the company’s third condominium project, and had nearly 100% take-up of its 110 units. The project comprises studio, one and two bedroom and penthouse units from 33 sq m to around 188 sq m.

In the Suburban Bangkok area on Phetkasem Road, Plum Condo Bangkae

by Pruksa Real Estate Plc achieved close to 100% take-up. The project comprises studio, one and two bedroom units from 22.5 sq m to around 45 sq m.

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Bangkok condominium Market REPORT | Q3 2012 Average Selling Prices of Newly-Launched Projects by Location, Q3 2012

Source : Colliers International Thailand Research

The average selling price of newly-launched units in Q3 2012 is highest in the City area at more than THB 130,000 per sq m in some new high end projects, followed by the Eastern Fringe area at approximately THB

106,500 per sq m in some new projects on Sukhumvit Road. At approximately THB 45,000 per sq m, the Suburban Bangkok area has the lowest prices in the Bangkok market.

Mass Transit Effect Average Selling Prices of Newly-Launched Units by Proximity to Existing Mass Transit Lines from Q1 - Q3 2012 by Quarter

Source : Colliers International Thailand Research

The average selling price in all locations is approximately 13% higher than during the previous quarter, especially projects 501 to 1,000 m from BTS and MRT stations, which saw prices rise by around 37%. Prices

dropped around 5% in the Suburban Bangkok area, with many projects located in smaller so is along the new mass transit extension lines.

All current projects are expected to complete within the next five years.

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Bangkok condominium Market REPORT | Q3 2012

Average Take-up Rate of Newly-Launched Units by Proximity to Existing Mass Transit Lines from Q1 - Q3 2012 by Quarter

Source : Colliers International Thailand Research

The take-up rate of projects less than 200 m from the BTS / MRT stations is the highest at around 85%. Projects located more than 1,000 m from the mass transit stations, of which more than 6,000 launched in

Q3 of this year, have the lowest percentage rate of take-up. Although the take-up rate was only 58%, that represents over 3,600 units, more than in any other category.

Financing Housing Loans for Personal Consumption Extended by Financial Institutions

Source: Bank of Thailand and Colliers International Thailand Research Note: Excludes negligible amounts of financing from other sources. Percentage change is comparable quarter-on-quarter

The growth rate of housing loans increased by approximately 2.4% in Q2 2012overthe first quarter of 2012. This was because of the soft loan

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policy for all flood victims during the first half of 2012.

Bangkok condominium Market REPORT | Q3 2012 Forecast The condominium market in the second half of 2012 shows continuous growth compared to the first six months, although the total number of condominium units launched in Q3 2012 is lower than in Q2. Many condominium projects are scheduled to launch in the last quarter of 2012, which will take 2012’s total of new condominium units above the figure from last year.

Some listed developers have launched condominium projects outside of Bangkok with better feedback than expected from local people, allowing them to focus on these new markets outside of Bangkok in the future while keeping market share in Bangkok. Chiang Mai, Pattaya, HuaHin, Phuket, Khon Kaen, KhaoYai and Hat Yai are the main business cities in Thailand and are the new areas of competition outside Bangkok.

As there is limited available land at suitable prices in the City area, especially on both sides of Sukhumvit Road, some developers are gearing towards low-rise condominium projects on smaller plots of land in smaller sois. The number of low-rise condominium projects will continue togrow in the future in the sois off Sukhumvit Road and other locations.

Big name developers in Thailand are looking for new opportunities in foreign countries as well, especially in ASEAN countries like Indonesia, Philippines, Vietnam and Myanmar.

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Bangkok condominium Market REPORT | Q3 2012

APPENDIX

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Bangkok condominium Market REPORT | Q3 2012 ZONING HISTORICAL SUPPLY BY YEAR

cumulative supply in Bangkok

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Bangkok condominium Market REPORT | Q3 2012 • CITY AREA The area covers four adjacent but competing sub-markets: the Sukhumvit section comprising Sukhumvit Road between Soi 1 and Soi 55 to the north and Soi 2 and Soi 38 to the south; the Central Lumpini section including Phloen Chit Road, Rama I Road, Soi Langsuan, Soi Sarasin, Chitlom Road, Ratchadamri Road, Witthayu Road and Rachaprasong Road; the Silom / Sathorn section; and the Riverside section fronting the Chao Phraya River along Charoenkrung Road and Charoennakorn Road, where several five-star hotels are located. The City area is convenient for businesspersons, expatriates and tourists, because of its proximity to many office buildings, retailing and local attractions.

• CITY FRINGE AREA This area covers three parts of Bangkok: Northern Fringe: This section covers the BTS route starting from Ratchathewi Station to Mo Chit Station to the north and the MRT route starting from Petchaburi station to Bangsue station to the north.

Southern Fringe: This section covers Narathiwad Ratchanakarin Road, Chan Road, Sathupradit Road, Charoenkrung Road and Rama III Road along the Chao Phraya River.

Eastern Fringe: This section covers the BTS route starting from Thong Lor Station to On Nut Station to the east, Rama IV Road and Petchaburi Road.

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This area covers locations with their own local infrastructure and convenient transportation. However, commuting is required to have access to the central business and entertainment areas.

• OUTER CITY AREA The area covers two parts of Bangkok: Outer City (East): This section starts from the extension of the BTS route at On Nut Station to the Bangkok boundary to the east.

Outer City (West): This section starts from the extension of the BTS route at Taksin Station to Bang Wa station, which includes the area from Krung Thonburi Road to Ratchaphruek Road near Petchakasem intersection.

• SUBURBAN BANGKOK These are the environs outside the areas already mentioned. Expansion of the mass transit system is the main determinant for increasing future supply in a particular area. The expansion from On Nut to Samut Prakarn is scheduled to be completed in 2011. The expansion of the BTS will benefit directly the surrounding condominiums, as it will considerably reduce transportation costs and time. This will encourage the development of new condominiums in this area. Suburban Bangkok represents the biggest area and for the purposes of this report and includes Bangkok city’s old town (Koh Rattanakosin area and boundary area). This location has comprehensive town planning controls restricting building height, so there are no condominium projects in the area.

Bangkok condominium Market REPORT | Q3 2012 COLLIERS INTERNATIONAL THAILAND MANAGEMENT TEAM PROJECT SALES & MARKETING Monchai Orawongpaisan | Associate Director RESIDENTIAL SALES & LEASING Napaswan Chotephard | Manager RETAIL SERVICES Asharawan Wachananont | Associate Director RESEARCH Tony Picon | Associate Director Surachet Kongcheep | Senior Manager OFFICE SERVICES Nattawan Radomyos | Senior Manager INDUSTRIAL SERVICES Narumon Rodsiravoraphat | Associate Director ADVISORY SERVICES | HOSPITALITY Jean Marc Garret | Director ADVISORY SERVICES Napatr Tienchutima | Associate Director REAL ESTATE MANAGEMENT SERVICES Prasert Saiphrawan | Senior Manager INVESTMENT SERVICES Nukarn Suwatikul | Associate Director Wasan Rattanakijjanukul | Senior Manager

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