Bangkok Condominium Q4-2011

Q4 2011 | Condominium

thailand

Bangkok Condominium Market REPORT Bangkok Condominium Market HIGHLIGHTS

market indicators 2010 / 2011 new Supply

New launches in 2011 dropped from the previous year by around 50%, due to buyers and developers waiting for the new government policy on allowances for first-time buyers in the third quarter and the floods in some parts of Bangkok in the last quarter.

Floods in the fourth quarter of 2011 affected new launches as construction sites ground to a halt. Buyers were also taking more time to make a decision.

New Bangkok Town Planning is still the main issue for 2011 - 2012, due to expected regulations that will affect future development and the number of units in the pipeline.

New launches in 2012 will surpass the total units in 2011, as many projects postponed launches from 2011 to 2012. Developers are also focusing more on high-rise projects. Buyers are also showing more interest in condominium projects than in houses reflecting a preference for city living.

LAUNCHES PRICES

Newly Launched Condominium Units from Q1 2010 – Q4 2011 by Quarter

TAKE-UP

Source: Colliers International Thailand Research

Newly launched units in the fourth quarter of 2011 totalled around 5,160 units, an increase from Q3 2011 of approximately 2,150 units.

Around 30,689 units were launched in 2011 which is significantly fewer than 2010. There were many factors in 2011 that affected the condominium market, such as the general election in the third quarter which led many customers to postpone buying decisions while they waited for new policies from the new

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government. In the fourth quarter the major problem in some parts of Bangkok was the flooding which directly affected the real estate market, especially housing projects. The condominium market was also affected by the floods as customers postponed making a decision during that time and many developers were forced to delay the launching of new projects until 2012.

Bangkok condominium Market REPORT | Q4 2011 Newly Launched Condominium Units in Q4 2011 by Location

Source : Colliers International Thailand Research

Within urban Bangkok, the Northern Fringe area has seen the highest number of new projects with approximately 960 units launched, followed

by the Eastern Fringe area with approximately 760 units.

Historical Supply

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

Only about 3,800 new condominium units were completed and registered at the Department of Land in Q4 2011 and the total number in 2011 was approximately 24,500 units. The number of completed units in 2011 was

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lower than in 2010 by around 25%, due to some projects being forced to postpone their completion dates until 2012, due to the floods in some parts of Bangkok.

Bangkok condominium Market REPORT | Q4 2011 Total Historical Supply by Location to Q4 2011

Source: Department of Land, Colliers International Thailand Research

Around 64%, more than 206,000, of the total condominium units are located in suburban Bangkok. Within urban Bangkok, the Northern Fringe

contains the most units due to its proximity to the centre, mass transit connections and relatively lower land prices compared to the City Area.

New Supply 2009 – 2011 by Quarter

Source: Department of Land, Colliers International Thailand Research

Approximately 3,800 units were completed in the last quarter of 2011 and the total supply in that year amounted to around 24,500 units. More completed units are usually launched in the final quarter of each year although Q4 2011 was significantly down because some parts of Bangkok

were flooded. Many construction sites installed barriers for protection from the floods which caused construction work to cease. Some roads were under water which affected the transport of materials. Many projects were forced to postpone their completion dates until 2012.

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Bangkok condominium Market REPORT | Q4 2011 Future Supply – Urban Bangkok Cumulative Future Supply Scheduled to be Completed from 2012 – 2013 by Location in Urban Bangkok (As of Q4 2011)

Source: Colliers International Thailand Research Remarks: Supply does not include units in Suburban Bangkok

Approximately 32,100 units are scheduled to be completed in 2012 in the urban Bangkok area and more than 25,000 units in suburban areas. The Northern Fringe area continues to be the main player in urban Bangkok with approximately 12,400 units scheduled for completion in 2012,

followed by the City area with a total of around 7,150 units. In addition, the Northern Fringe area will remain the primary area for the condominium market over the next few years.

Take-up Sales Proportion of Newly-launched Units in 2011 by Quarter and Location

Source: Colliers International Thailand Research

The average take-up rate of newly-launched condominiums for all location in Q4 2011 was around 57%, representing the highest quarter in 2011. , The take-up rate in Suburban Bangkok was lower than in the

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previous quarter due to the floods. The positive figures for the Eastern and Northern Fringe are the result of popular newly-launched projects from Asian Property Development Plc. and Supalai Plc.

Bangkok condominium Market REPORT | Q4 2011

Average Sales Proportion of All Newly Launched Units in 2011 by Location

Source : Colliers International Thailand Research

The average take-up rate for newly launched condominium projects in Bangkok in 2011 was approximately 47%. The take-up rate in the suburban Bangkok area was the highest followed by the Eastern Fringe area, Southern Fringe area and City area respectively. The reason for the

high take-up rate in the suburban Bangkok area is that many newlylaunched projects were located on BTS or MRT extension lines, and most of the projects were scheduled for completion at the same time as the completion of the mass transit system.

Launches with High Take-up Rates in Q4 2011 Supalai Ekamai – Thonglor was the second project from Supalai Plc. on Phetchaburi Road with a total of 660 units in the Eastern Fringe area which had one of the highest take-up rates in that location. Phetchaburi Road is still a relatively new condominium location becoming popular for condominiums over the past three years, due to it being close to the main business roads such as Sukhumvit Road and Ratchadapisek Road, in addition to land prices still being affordable.

D Condo Charan – Bangkhunnon on Charansanitwong Road by Sansiri Plc. showed the highest take-up rate of almost 100% of its 445 units with a selling price of more than THB34,000 per sq m. The project is located on Charansanitwong Road which is also on the BTS Blue Line extension. Sansiri Plc. still expanded to the lower market in Suburban Bangkok area with D Condo as a major brand for this market, as well as having launched D Condo in other provinces of Thailand already.

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Bangkok condominium Market REPORT | Q4 2011

Average Take-up Rate in Proximity to Existing Mass Transit Stations Q4 2011

Source: Colliers International Thailand Research

The take-up rate of projects 201 – 500 metres away from BTS / MRT stations was the highest at nearly 70%, but for the projects 501 – 1,000 metres and more than 1,000 metres from BTS / MRT stations, take-up rates are lower at around 60%.

Most of the condominium projects along the BTS line that were launched in 2011 were not located on the main road and are not adjacent to a BTS station. They are however located within walking distance of a BTS station, so selling prices were lower in order to attract buyers.

Average Take-up Rate in Proximity to Existing Mass Transit Stations in 2011

Source: Colliers International Thailand Research

The average take-up rate of condominium projects within 200 metres of mass transit stations came close to 45%. Most projects in this area are luxury projects and the selling prices are more than THB100,000 per sq m. However projects located 201 – 500 and 501 – 1,000 metres from BTS / MRT lines showed the lowest rate of around 36%. This figure is

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due to many projects being located away from the main road, sometimes in out of the way sois with poor feeder systems but with selling prices still high or similar to projects located on the main road or nearer to BTS / MRT lines. Projects located further than 1,000 metres came highest at more than 47% due to the lower selling price of projects.

Bangkok condominium Market REPORT | Q4 2011 Initial Launch Prices Average Selling Prices of Newly Launched Projects Q1 – Q4 2011 by Location

Source : Colliers International Thailand Research

The average selling price in the City area is still the highest at THB140,000 per sq m for Q4 2011. The average selling price in Q2 to Q4 was more than THB100,000 per sq m. The average selling price in the Outer City

– East area is lowest due to most projects focusing on the low-end market. Most projects in the suburban Bangkok area are along the new BTS or MRT extension lines, so the average selling price is higher.

Launch Prices: Mass Transit Effect Average Selling Prices of Newly-launched Projects by Proximity to Mass Transit Lines (BTS and MRT) 1Q - Q4 2011

Source : Colliers International Thailand Research

The distance from BTS / MRT stations still is the main factor for the average selling price. The average selling price of projects within 200 metres of a mass transit station is nearly THB110,000 per sq m. However the average selling price of projects located 501 – 1,000 metres from

BTS / MRT lines are higher than other locations, due to the average selling price from one project on Thonglor Road in Q3 being nearly THB195,000 per sq m.

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Bangkok condominium Market REPORT | Q4 2011 Trends New Bangkok Town Planning The existing Bangkok Town Plan expired last year and has been extended to May of 2012 and may be extended further to 2013., In the draft of the new Bangkok Town Plan, construction of buildings over eight stories or 5,000 sq m on a road less than 16 metres wide is prohibited. This will affect the condominium market, especially the low to middle price market, due to most small streets in Bangkok being less than 16 metres wide.

Many developers and the Thai Condominium Association are trying to change or delay the regulation, due to it directly affecting developers and the condominium market in Bangkok.

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 of change is on a quarterly basis

The growth rate of housing loans increased more than 3% from Q3 2009 to Q1 2010 because the government’s incentives attracted buyers to purchase and transfer before the second quarter of 2010. This boosted housing loans in that period compared to other periods. The amount of

loans continues to grow but at a more sustainable pace. The growth rate in Q3 2011 was the highest of the past six quarters, due to the first home policy from the previous government and the new policy from the new government coming into effect in September.

Forecast

Condominium developers however have already launched new projects along the planned lines. Most developers are land-banking before starting construction, due to cheaper land prices.They are scheduleing completion for the same time as the mass transit line. The area along the blue line is most popular and a lot of condominium projects were launched in 2011, most from listed companies.

The flooding in the last quarter of 2011 affected low-rise projects in the suburban Bangkok area, but also had a positive affect on the condominium market, as many people who lived in flooded areas moved to condominiums in the City area. In addition, some of them decided to buy condominiums along mass transit lines or in the City area. The condominium market in 2012 will be more active than in 2011, as most developers are focusing more on the condominium market than on low-rise projects. Some house owners in flooded areas also opted to buy condominium units in the City area or along mass transit lines, to enable them to go to work during the flood.

Mass transit remains a key factor in attracting developers and buyers.

Construction on some extension lines has already started, while other lines are still waiting for a final decision or are in the bidding process.

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The new Bangkok Town Plan is also a concern for developers, as the third draft will limit the total area and height of buildings in narrow streets. . This regulation will directly affect developers as well as landowners and will force more concentration of development on on higher value sites along the main roads.

Bangkok condominium Market REPORT | Q4 2011 COLLIERS INTERNATIONAL THAILAND MANAGEMENT TEAM RESIDENTIAL SALES & LEASING Napaswan Chotephard | Manager PROJECT SALES & MARKETING Monchai Orawongpaisan | Senior Manager RESEARCH Tony Picon | Associate Director Surachet Kongcheep | Senior Manager OFFICE & INDUSTRIAL SERVICES Narumon Rodsiravoraphat | Associate Director RETAIL SERVICES Asharawan Wachananont | Associate Director ADVISORY SERVICES | HOSPITALITY Jean Marc Garret | Director ADVISORY SERVICES Napatr Tienchutima | Associate Director REAL ESTATE MANAGEMENT SERVICES Patima Jeerapaet | Managing Director INVESTMENT SERVICES Nukarn Suwatikul | Associate Director Wasan Rattanakijjanukul | Senior Manager VALUATION & ADVISORY SERVICES Phachsanun Phormthananunta | Director Wanida Suksuwan | Manager

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