Hua Hin Today
Volume 9 issue 8 June 2012
&
11
Volume 9 Issue 8 June 2012
CBRE publishes Thai property outlook for 2012
T
he Bangkok property market has seen a significant recovery from the effects of the floods, according to CBRE Thailand a leading international real estate service provider. Even the worst hit areas such as low rise housing, retail and industrial in areas that were flooded have seen resumed activity. In the flooded areas, all retail centres have reopened, there were new housing sales and the majority of factories have reopened or are in the process of reopening. Residential Market: In the single detached house and townhouse market, while developers are concentrating most new launches in areas that were not flooded, CBRE is also seeing new sales resuming in areas that were flooded, particularly for the low to middle-end market, but the high-end housing market is slowly recovering. “We believe the desire of purchasers to own a house or townhouse close to future mass transit stations in the suburbs have continued as fears of a repeat flood are now alleviated. Demand for single-detached houses and townhouses will increase but this will be driven by affordability and the attractiveness of the product and location,” said Aliwassa Pathnadabutr, managing director of CBRE Thailand. The prices of condominiums are rising due to higher land costs and construction costs. CBRE believes that for a fixed budget, the majority of the family market will consider townhouses in a good location several kilometres away from a mass transit station in the suburb rather than a one-bedroom condominium in the city which is at a similar price point. Nevertheless, there will be continued demand for small condominiums from singles, couples and weekday occupation by children attending central city schools and second home use. LPN, the leading entry-level condominium developer has branched out into townhouse developments with two new projects including Lumpini Town Residence which offers 190 – 200 sq. m. threestorey townhouses on an 88 – 188 sq. m. plot priced at THB8. 79 million (US$280,070) and only 200 metres from the MRT Ladprao station. LPN has also launched Lumpini Town Place
offering three-storey townhouses on 80 – 100 sq. m. plots at Ratchayothin-Sena, located 3. 6 kilometres from the nearest MRT station. In the luxury condominium market, demand is driven primarily by end-users and partly by buy-tolet investors who purchase with the potential for own use in the future. Record prices have been achieved for condominiums in the best locations and best-quality recentlycompleted projects. CBRE has seen achieved sales prices in the region of THB160,000 to THB200,000 (US$5,098 to US$6,373) per sq. m. for individual units in completed luxury projects such as Q Langsuan, Saladaeng Residences, Athenee Residence and The Park Chidlom. The majority of the projects achieving this price level is located within the Lumpini area, one of Bangkok’s most prestigious address and expensive locations. CBRE believes condominium prices in the Sukhumvit area are also gradually moving up in line. However, prices in projects that are more than ten years old remain flat mainly because common areas have not been renovated which means they are significantly less attractive than new projects. In the middle and entry-level markets, condominium prices have adjusted upwards, but to a lesser extent than the luxury market. There continues to be new project launches although the absorption rate is slower, compared to two years ago where many projects tended to sell out at launch. The top public listed developers dominate this segment of the market. Condominium living is becoming more widely adopted and there is still potential demand particularly in densely populated areas where there has
been limited development. Developers will face the challenges of identifying new opportunities in new locations as well as to sell out poorly performing projects before they are completed. The competition will remain fierce with a tendency to quickly over supply in a particular location. Office Market: Demand continued to improve in the office market. The overall vacancy rate was 13. 86 per cent compared to 14. 13 per cent in Q4 2011. The Grade-A CBD vacancy rate was 18. 33 per cent, down from 20. 51 per cent in Q4 2011. The higher vacancy rate for the Grade-A segment compared to the overall office market can be explained by the completion of two new Grade-A buildings – Park Ventures Ecoplex and Sathorn Square. Both buildings were completed last year with tenants just beginning to take occupation. ....Continued on page 37....
Jones Lang LaSalle reveals Asia Pacific Property Digest:
J
Bangkok, Kuala Lumpur, Singapore
ones Lang LaSalle has revealed its Asia Pacific Property Digest for the first quarter of 2012. The report has stringently analysed the residential real estate markets of key cities across Asia Pacific, including Bangkok, Kuala Lumpur, and Singapore. Dr Jane Murray, Jones Lang LaSalle’s head of
research said: “Following a strong end to 2011, Asia Pacific’s property markets saw a moderation in activity levels in Q1 2012. ”
Bangkok: According to the recent report Bangkok residential capital value rose 1. 1 per cent in the first quarter of this year; compressing yields to four per cent. Strong take-up in the residential market offset supply. Jones Lang LaSalle reported that gross rents rebound whilst effective rents slightly decreased at 0. 4 per cent. Local property purchasers continued to be the major source of demand for high-end condominiums; for both self-occupancy, and investment purposes. The only Bangkok project to be completed in the first quarter was Pearl Residence, Sukhumvit 24. Between January-March 78 units were added to the project stock. In total, 23,102 units now complete the stock. The report concluded: “Demand from end-user buyers and investors is expected to remain sound following renewed interest in highrise developments in the city centre. ” The report summarised that although the amount of supply is falling compared to previous years, rents are expected to continue to experience pressure from existing and future supply. Capital values are expected to continue in an upward trend as condominiums continue to attract liquidity flush buyers, confirmed the report. Kuala Lumpur: It was reported that the real estate developers in Kuala Lumpur concentrated on more saleable mid-price range condominiums. As a result, high-end project launches slowed in quarter one. Between January-March, M City was the only highend development to be completed. Developer, Mah Sing Group offered a five per cent price discount as well as a developerbearing scheme to purchasers. On the whole, capital and rental values remained stable, according to the Jones Lang LaSalle Q1 2012 report. Over the year, the high-end condominium market
is expected to remain ‘soft in the shortterm. ’ This reflects market caution and continued global economic uncertainty. Sale and leasing market demand has been stronger amongst smaller units: this trend will continue as developers attract a larger purchaser market in constructing ‘more affordable’ units. The report concluded about the year ahead: “Due to construction increases, prices of new launches will effectively continue to increase. ” Singapore: Singapore’s real estate market delivered a downturn in figures, across the board, according to Jones Lang LaSalle’s first quarter report of 2012. In the prime districts, only two new projects were launched this quarter. Unit completion stood at 300, down 36. 2 per cent, quarter-on-quarter. This figure, stands at the lowest since 2008, quarter four. Recent restrictive legislation: Additional Buyers Stamp Duty continues to negatively impact the volume of Singapore sales. Residential rents also follow suit in falling as supply hits the market. While, the influx of expatriates and demand from dwellers opting to rent rather than buy following the introduction of ASBD in December has helped to maintain consistent demand, the increase in supply of new properties has added downwards pressure on older rental properties, stated the report. In an over-view of the year ahead the report said: “Despite steady demand, supply pressure, combined with the latest round of cooling measures, is likely to maintain downwards pressure on rents and capital values for properties in the prime districts and as such we expect both rents and capital values to continue to soften in 2012. ” Dr Jane Murray, head of research Asia Pacific summarised: “Despite the more uncertain global economic environment, the Asia Pacific economy is expected to significantly outpace the rest of the world this year. ”