H2 2011 (year end) | condominium
thailand
Pattaya City Condominium Market Report
Pattaya City Condominium Market Highlights market indicators H1 2011 - H2 2011 Supply LAUNCHES PRICES
Over twice as many units were launched onto the market in the second half of the year than H1 Around 500 units were completed in Pattaya in H2 2011.
A publicly listed developer gave a strong vote of confidence in Pattaya with its first launch in the city of a significant number of units.
The second home market was being targeted for H2 2011 in particular through large-scale developments.
The Jomtien area has been the most fashionable area for the condominium market in Pattaya for the past two years.
TAKE-UP
New launches power Pattaya market Newly launched in H2 2011
Newly-launched units in the second half of 2011 were significantly higher than the total launched in the whole of the previous year. This was due to three new projects being launched in the second half of 2011 with more than 1,100 units per project.
Source : Colliers International Thailand Research
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Pattaya city condominium report market | H2 2011 (YEAR END) Description Pattaya is a city located on the east coast of the Gulf of Thailand about 165 km southeast of Bangkok. It is within, but not under, the jurisdiction of Amphoe Bang Lamung in the province of Chonburi. The city of Pattaya is a self-governing municipality that covers the whole Tambon of Nong Prue, Na Klua, parts of Huai Yai and Nong Pla Lai. It is located within the heavily industrialised Eastern Seaboard zone, along with Sri Racha, Laem Chabang and Chon Buri. It has a population of 556,916 and covers an area of 49.37 sq km. Pattaya city occupies most of the coastline of Banglamung (one of the 11 districts that comprise Chonburi Province). It is divided into a larger northern section that spans the areas to the east of Naklua Beach (the most northern beach) and Pattaya Beach (the main beach), plus the Pratumnak headland (Buddha Hill) immediately south of Pattaya Beach and a smaller southern section covering the area to the east of Jomtien Beach, which lies directly south of Pratumnak. The report covers the Pattaya city area as well as Na Jomtien and a distinction is made between Pattaya city and Pattaya bay which constitutes part of the overall area under consideration.
Supply Historical supply
cumulative supply in Bangkok
Source : Department of Land and Colliers International Thailand
At the end of 2011, the total supply amounted to approximately 46,100 units. For 2H 2011, more than 1,500 units were added to the supply and over 7,700 units are scheduled for completion in 2012. From 2006 onwards the number of condominium developments in Pattaya significantly increased, a trend which has continued steadily to this day. Although only approximately 1,500 units were added in 2011,
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less than the new supply in 2010, more than 16,400 units were launched in 2011, the highest number in the past few years. In addition, LPN Development Plc. launched its first project outside of Bangkok at Wongamat area in the first half of 2011 which was followed by two other projects in Jomtien and Wongamat area. All projects have shown a good sales performance within a short time.
Pattaya city condominium report market | H2 2011 (YEAR END) Supply by zone
cumulative supply in Bangkok
Source : Department of Land and Colliers International Thailand
Pattaya proved to be the most popular zone for the condominium market in the years prior to 2000; however from 2001 onwards the Jomtien area has shown continued growth due to the considerable amount of remaining development land. Another important factor is that the Pattaya City Administration Office started to develop Jomtien Sai 2 Road in 2005. Many developers have also focussed on this road since 2005 and launched more new condominium projects on the road. Jomtien Sai 2
Road runs parallel to the beachfront road and is not far from Jomtien Beach. In addition many sois or small roads connect to the beachfront road. The condominium supply expected to complete in 2012 to 2015 in Pratumnak area will be higher than in any other area, with more than 9,000 units in the pipeline.
Condominium supply by location, H2 2011
The largest condominium supply is in the Jomtien area, representing about 41% of the total, followed by the Pattaya area, at about 31%. Condominium projects in the Pattaya area are predominantly low-rise in nature and the average number of units per project is approximately 66, which is similar to projects in the Wongamat and Pratumnak areas. The figure for the Jomtien area is around 600 units as most of the projects are high-rise buildings. The pattern of overall real estate development is different for Pattaya and Jomtien. Pattaya contains the lion’s share of both hotel and retail projects leaving limited sized land plots available for larger scale condominiums. Jomtien was largely spared this process in the 1980’s and 90’s and as a result sizable tracts of land still remain available for larger scale projects. cumulative supply in Bangkok Source : Colliers International Thailand Research
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Pattaya city condominium report market | H2 2011 (YEAR END) Future Supply Cumulative future supply by year and location
Source : Colliers International Thailand Research Remark : The year completion was expected by developers
More than 7,700 units are scheduled to be completed and transferred in 2012 which represents an increase of just over 47% in total supply and more than 7,100 units are scheduled to be completed and transferred in 2013. During the years 2012 – 2013 the Jomtien area is set to be the
main player in the Pattaya market, due to the number of projects being launched. This area is especially popular for the surging Russian market and strong domestic market.
Newly launched units in H2 2011 by location
Source : Colliers International Thailand Research
New launches for 2H 2011 were more than double that of the first half of the year. The new launches in the Jomtien area were highest followed by the Pratumnak area. The high number in Jomtien is due largely to the new beachfront high-rise from LPN and the resort style developments from Matrix, Heights Holdings, AD House and Blue Sky Developments. LPN Development Plc. launched its second condominium project in Pattaya. Lumpini Park Beach Jomtien had its official launch in October
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2011 and sold approximately 65% of the total 1,846 units in only two months. Units in the project are one and two-bedroom from 28 to 151 sq m and at a starting price of THB 1,490,000 per unit. In addition, LPN also launched a third project in the Wongamat area in December 2011.
Pattaya city condominium report market | H2 2011 (YEAR END) Condominium Projects with Hotel Management The trend for residences with hotel management or a hotel component is taking shape in Pattaya city with six projects on the market adopting this format. The addition of such a brand adds kudos to the development as well as significant facilities and services available to unit owners and those who choose to rent. The upshot is that capital values are likely to increase with the addition of a hotel element. No.
Project Name
Brand
Location
1
Movenpick White Sand Beach Pattaya
Movenpick
Na Jomtien
2
Amari Residence Pattaya
Amari
Pratumnak
3
Centara Avenue Residence & Suites Pattaya
Centara
Pattaya
4
Park Plaza Waterfront
Park Plaza
Pratumnak
5
Centara Grand Residence Pattaya
Centara
Na Jomtien
6
Modus Private Beachfront Condominium
Wyndham
Wongamat
Source : Colliers International Thailand Research
DEMAND Take Up Rate of Launched Projects since 2010
cumulative supply in Bangkok
Source : Colliers International Thailand Research
The average take-up rate for the whole of Pattaya city has increased by an average of approximately 6 - 9% from the first half of 2011. The takeup rate of Na Jomtien locations has decreased by an average of approximately 10% from the first half of 2011. During the last six months, 22 new projects were launched in the Pattaya area with approximately 10,000 units. Most of them were put on the
market in the last two months of 2011. New projects launched in the Jomtien area contain more than 7,000 units, which made the average take-up rate in the area increase slightly by more than 2%. No new projects were launched in the Pattaya area but the construction of the current developments in this area has shown good progress which has led to greater confidence resulting in improved sales.
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Pattaya city condominium report market | H2 2011 (YEAR END) Foreign and Domestic Demand In contrast to the last couple of years where foreign buyers were the mainstay of the Pattaya and Jomtien property scene, we are seeing a remarkable entry into all segments of the market from Thai buyers. They appear attracted to purchasing a holiday home for occasional recreational use and one can’t help thinking as a “retreat� in case the flooding occurs sometime again in the future. The Thai market is particularly brand conscious and tends to follow well known names such as LPN, Raimon Land and Major Developments. Other developers work closely with well regarded hotel names such as Centara, Amari and Park Plaza in a bid to gain recognition from the Bangkok market. The large scale domestic entry to the local market is especially pleasing for developers who have traditionally struggled to sell their Thai ownership quota. The Russian market continued to be strong during the second half of the year and it appears to be more resilient in the face of global economic problems than other markets. Europeans, especially British and American buyers have not shown such demand as in previous years, however buyers from Australia have also been notable throughout 2011 due to the particularly strong AUD.
There has been a notable increase in enquiries from Indian visitors wanting a piece of the action and although many of the enquiries are generally for lower priced units, it is exactly the same trend that the Russian market followed several years ago. We expect Indian buyers to be a force to be reckoned with in the coming years and about 20 Indian hotel chains are looking at setting up in Thailand to cope with close to one million Indian visitors coming to Thailand in 2012. With India having the most billionaires in Asia and an emerging class of millionaires, there certainly is the potential for great things to come. Towards the end of 2011 we witnessed a vast array of condominiums enter the fray and were astounded by the huge success of many and their incredible take up rate. Certain projects have been almost sold out as soon as they were launched while others took several months to reach 50% to 70% sold. The overall results however are very encouraging for the market in general and there seems to be no stopping the immense popularity that Pattaya holds for both investors and owner occupiers.
Net Increase in Population over 65 in Selected Countries
Source: United Nations population Division and Colliers International Thailand Research
Significant numbers of retirees will come from countries that are large markets for the Pattaya tourist industry and consequently potential residents in the future. With lower government pension provisions expected in the era of the greying baby boomers, many in the west may choose to live their remaining days in a country offering them a better standard of living in a warmer climate. The Russian market, already the strongest one in terms of foreign buyers could see further growth on the back of an increase in retirees in the second half of the decade. The lure of tropical Pattaya could be the perfect antidote to the severe Russian winters.
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Pattaya city condominium report market | H2 2011 (YEAR END)
Change in Thai Baht exchange rates
Source: Bank of Thailand and Colliers International Thailand Research
Pattaya as well as other resort towns in Thailand have been hampered by the strength of the Thai Baht against currencies of the vast majority of foreign demand. However in the past six months currencies have recovered although the fraught financial situation of many governments in Europe as well as the USA could add more pressure on the Euro and Dollar in the future. The Australian Dollar has bucked the trend with the
strong commodities sector enhancing the value of the currency. This, as well as the prohibitive prices of coastal real estate in Australia goes some way to explaining why more Australians are buying resort property throughout Thailand, including Pattaya. The average price for an apartment on the Gold Coast in 2Q 2011 is THB16.5 million.
Price Average Selling Price per sq m by Location, H2 2011
Source: Colliers International Thailand Research
The average selling price in Pattaya area is highest, as no new projects were being launched in the second half of 2011. The Pratumnak and Jomtien areas experienced prices drop by approximately 15% compared to the first half of 2011 as new projects were launched in the second half
with lower selling prices. The Wongamat area also had new projects launched in the second half of 2011 with lower prices as they were not located in the prime beachfront area.
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Pattaya city condominium report market | H2 2011 (YEAR END) Beach frontage and height of condominiums affect on price H2 2011
Location
Average Selling Price (THB / Sq M.)
Average Selling Price
High Rise
Low Rise
(> 8 storey)
(< 8 storey)
62,055
61,940
45,000
56,560
54,339
55,238
42,185
54,887
39,850
50,391
73,450
50,391
(THB / Sq M.)
Beachfront
Other area
Wongamat
62,031
106,807
53,595
Pattaya
68,500
Pratumnak
54,986
Jomtien
46,763
118,635
Na Jomtien
61,000
120,000
Source : Colliers International Thailand Research
Beach frontage is the key driver for luxury condominiums. Prices can rise by over 100% when located by the beach, especially in Jomtien where many projects are located some distance from the beach. There is also a premium for high-rise condominiums as the view from the unit
is especially important for buyers of a resort property. Compared to Bangkok most Pattaya city developments use greater quantities of glass in their construction in order to make the most of the surroundings and some projects select special building plans for panoramic sea views.
Outlook Due to Pattaya being unaffected by the floods in the last quarter and located reasonably close to Bangkok, many people in flooded areas temporarily moved to Pattaya for the short term. This situation also affected the residential market in Pattaya, as these people needed to stay in hotels, serviced apartments, apartments, houses or condominiums during the flood. Many Thai people started to look for property to purchase in Pattaya after the flood, as it is not only close to Bangkok (only two hours drive) but offers many facilities such as shopping malls, water park, supermarkets, cinemas and other facilities like Bangkok The average number of units per project was also more than in 2010, as a result of several large scale projects being launched in 2011 with total units numbering more than 1,000. The Pattaya condominium market in
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2012 still continues to grow with a lower number of newly-launched units. From 2009 Jomtien Sai 2 Road in the Jomtien area became the new fashionable location for condominiums in Pattaya. Many condominium projects have been launched on this road in the past two years and total units at some projects exceed 1,000.
Pattaya city condominium report market | H2 2011 (YEAR END)
APPENDIX
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Pattaya city condominium report market | H2 2011 (YEAR END) ZONING
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Pattaya city condominium report market | H2 2011 (YEAR END) Pattaya city can be divided into four zones for the purposes of this report. Below is a summary of each zone.
1. Wong Amat
4. Jomtien
This is the area to the north of Pattaya Nua. It is considered a peaceful, more up-market location and is a relatively new area for condominium development.
Jomtien beach is about 1 km south of Pratumnak Hill. The locale is home to many high-rise condominiums, beach front hotels, shops and restaurants. The area at the beginning of Jomtien is considered busy, while the area located at the end of this beach is considered peaceful and tranquil with less traffic passing through.
2. Pattaya This area is considered as the city centre. The section of beach from Central Road south to the harbour runs adjacent the core of Pattayaâ&#x20AC;&#x2122;s abundant nightlife area. Many sections of the beach are covered by rented deckchairs run by local beverage vendors during daylight hours. Pattaya Nua and Klang are the areas favoured by Asian visitors, especially Chinese and Korean, while the area of South Pattaya is popular among Middle Eastern, South Asian and Russian visitors.
3. Pratumnak
5. Na Jomtien Na Jomtien beach is south of Jomtien and does not have a beachfront road and is less developed as a result .The main road connection is Sukhumvit road, which is located between 500â&#x20AC;&#x201C;1,000 meters from the beach, this area extends to Bang Saray beach in Sattahip district. Note: The report covers residential areas located on or west of Sukhumvit road.
This area covers the main thoroughfare connecting Pattaya and Jomtien Beach. Many upscale restaurants have recently sprung up along Thappraya Road. This area is very popular with Scandinavian and Russian visitors. Part of Pratumnak contains hills where more exclusive style accommodation can be found.
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Pattaya city condominium report market | H2 2011 (YEAR END) COLLIERS INTERNATIONAL THAILAND MANAGEMENT TEAM PATTAYA OFFICE Mark Bowling | Senior Sales Manager Supannee Starojitski | Senior Business Development Manager / Office Manager PROJECT SALES & MARKETING Monchai Orawongpaisan | Senior Manager
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