Pattaya Condominium Market Report H1 2014

PATTAYA CITY CONDOMINIUM MARKET REPORT | 1H 2014

Research & Forecast Report Pattaya Condominium Market 1H 2014

PATTAYA CITY CONDOMINIUM MARKET 1H 2014 Executive Summary The total existing condominium supply in Pattaya City isroughly 55,950 units, approximately 40% of which (around 22,220 units) is located in the Jomtien area. This represents the highest concentration in Pattaya City.

Approximately 3,800 units were launched in the first six months of 2014, lower than 2H 2013 by around 60%.

The average take-up rate of the condominium market at the end of 1H 2014 was approximately 73%, slightly higher than that of the previous six months.

The average selling price of new condominiums launched in the first half of 2014 was approximately THB62,000 per sq m, similar to that in the second half of 2013, which will likely increase by around 5% in 2H 2014.

Most new condominium projects launched over the past several yearsfocus more on markets below the high-end bracket.

Total foreign tourists in the first few months of 2014 in Pattaya City are still lower if compared to previose months. The political situation, coup and martial law are the main factors affecting to the confidence of foreign tourists and directly affecting to property market The Pattaya condominium market will probably perform better in the second half of 2014 during the tourist high season. The political situation is also more stable compared with that in the previous few months.

Potential buyers have started site visits and decided to buy more condominiums in June, take-uprate will probably increase by around 3 - 5% in 2H 2014 compared to 1H 2014.

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Research & Forecast Report | Pattaya Condominium Market 1H 2014 | Colliers International

Supply Cumulative Condominium Supply as of 1H 2014

Source: Colliers International Thailand Research

Approximately 1,300 new condominium units were completed and registered at the Department of Land in 1H 2014. The total number condominium units in Pattaya as of the end of 1H 2014 was approximately 55,950 units, with approximately 7,300 units expected to be completed in 2H 2014 according to developers’ schedules.

Jomtien area is still set to take the highest share of the Pattaya City condominium market in the future, because more than 20,200 units launched in Jomtien area during the past two to three years and are scheduled to complete from 2014 to 2016. There is also an abundance of delvelopment land still available.

Approximately 40% of total existing condominium supply (around 22,220 units) are located in the Jomtien area, representing the highest concentration in the Pattaya City. The Jomtien area has been gradually growing and outpacing other locations since 2001. In addition, the

Jomtien area will still represent the highest share in the future because many condominium projects are under construction and are scheduled to be completed in the next 1 to 3 years.

Units Launched by Half Year and Location as of 1H 2014

Source: Colliers International Thailand Research

Approximately 3,800 units were launched in the first six months of 2014, lower than the second half of 2013 by around 60%. The number of new condominium units launched in 1H 2014 was significantly low if compared to 2H 2013, excepted for in the Jomtien area,which was 48% higher.The political situation in 4Q 2013 over the first five months of 2014 directly affected the entire nation’s property market, and Pattaya City was no exception.

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Many developers have launched condominium projects in Pattaya City over the past two years, but some projects still have many units available in the market. This was due to the Thailand property market being directly affected by political problems. Foreign buyers disappeared in 4Q 2013 after many countries warned their people to avoid or postpone coming to Thailand, especially when the NCPO announced martial law in May 2014. This had a particularly strong effect on Pattaya, where foreign buyers are one of the target groups of condominium developers.

Research & Forecast Report | Pattaya Condominium Market 1H 2014 | Colliers International

Future Supply Scheduled to be completed in Each Location from 2H 2014 to 2016 as of 1H 2014

Source: Colliers International Thailand Research

The total number of condominium units under construction in Pattaya City and scheduled to complete in 2H 2014 exceeds 7,300 units. Nearly 2,720 units are scheduled to complete in 2H 2014 in Wongamat higher than other location, but new condominiums scheduled to be completed in the next one to two years in Jomtien have dramatically higher than other locations, because many large condominium projects (some with more than 1,000 units) have been launched in Jomtien over the past few years.

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The labour shortage is still a major obstacle for the construction industry in Thailand. Many residential projects cannot be completed by the expected date. In addition, some projects cannot achieve their sales targets, which may affect their construction progress.

Research & Forecast Report | Pattaya Condominium Market 1H 2014 | Colliers International

Demand Average Take-Up Rate as of 1H 2014

Source: Colliers International Thailand Research

The average take-up rate of the condominium market in Pattaya is similar to what it has been over the few years. The average take-up rate at the end of 1H 2014 was approximately 73%, a little higher than that of the previous six months. This was due to the political situation, which had a direct effect on the confidence of Thais, who generally postponed the need to make any decisions regarding the purchase of new property across all locations in Thailand in the last quarter of 2013 and the first few months of 2014.

Meanwhile, the total foreign tourists in Pattaya over the first few months of 2014 are still lower if compared to previous months. The political situation, the coup and martial law are the main factors affecting the confidence of foreign tourists along with the property market that targets foreign buyers.

the condominium market in Pattaya. Many foreign tourists want to buy condominium units in Pattaya as a second home for when they come to Thailand. Thais purchase condominiums mainly as a second home or as an investment, as well as for a local residence while working in Pattaya or the surrounding area Potential buyers have started site visits and decided to buy more condominiums in June, take-up rate will probably increase by around 3 - 5% in 2H 2014 compared to 1H 2014.

Local Thai and foreign developers, as well as big names from Bangkok, are trying to attract more buyers through marketing campaigns offering perks, such as a guaranteed yield in one to three years. This scheme has attracted several buyers.

Many foreign countries warned their citizens to avoid travel to Thailand during the last quarter of 2013 and during the first few months of 2014.

The NCPO has still not cancelled the martial law, which also affected the confidence of foreign tourists. All of these situations directly affected

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Research & Forecast Report | Pattaya Condominium Market 1H 2014 | Colliers International

Prices Average Price as of 1H 2014

Source: Colliers International Thailand Research

The average selling price of new condominiums launched in 1H 2014 was approximately THB62,000per sq m, similar to that in the second half of 2013. The average price in the Jomtien area was the lowest, at around THB48,500 per sq m, as there are many large condominium projects with average prices of approximately THB1.5 million per unit and a starting price of only THB1 million. Mid-range to low-end condominium projects are successful with the Thai and foreign buyer groups, although most of them are far from the beach. Their primary selling point is facilities, such as a themed resort style with large Swimming Pool

other locations by around 8% to 23%. The average price in the Pratumnak area as in 1H 2014 increased from 2H 2013 a little more than 2% due to limited available land in the area. Beachfront projects commanded the highest average price at more than THB120,000 per sq m, and this figure continues to increase every year due to limited beachfront land in the Pattaya City area.

Many new condominium projects were launched in Na Jomtienin the past one to two years. Most are located in beachfront areas, and all of the projects target the high-end and luxury market.

Many high-end and luxury condominium projects were launched in Wongamat area, so the average price in the area was higher than in

Summary 1H 2014 and Forecast 2H 2014 Pattaya’s condominium market was directly affected by political unrest in the last quarter of 2013 and for the first few months in 2014. Most Thais and foreign buyers have postponed their decision to purchase due to an overarching lack of confidence in the political situation.

Some water park projects are under construction and are expected to be completed in 2014–2016. When all of the projects have been completed, many Thai and foreign tourists will be attracted and the property market in Pattaya city should grow further in popularity.

Most new condominium projects launched over the past year are more focused on sectors below the high-end bracket. In addition, some new projects from listed developers that are expected to be launched in the near future also target this group.

The Pattaya condominium market will probably perform better in 2H 2014 during the tourist high season. The political situation is also stable and the establishment of a new government may boost the confidence of foreign tourists and benefit the Pattaya condominium market. Potential buyers have started site visits and decided to buy more condominiums in June 2014, ending up with potential increase of approximately 3 – 5% in take up.

Local Thai and foreign developers and big names from Bangkok are trying to attract more buyers through marketing campaigns offering perks such as a guaranteed yield in one to three years. This has attracted a lot of buyers.

Jomtien and Na Jomtien areas will become the new development areas for the condominium market in Pattaya city. This was due to the availability of many land plots in the both areas with lower prices than in other locations, although still on the beachfront.

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Research & Forecast Report | Pattaya Condominium Market 1H 2014 | Colliers International

Appendix 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 Chonburi. It has an estimated population of 556,916 and covers an area of 49.37 sq km.

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.

Pattaya City can be divided into five zones for the purposes of this report.

Below is a summary of each zone.

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 northernmost beach) and Pattaya Beach (the main beach), plus the Buddha Hill headland (immediately south of Pattaya Beach), and a smaller southern section covering the area to the east of Jomtien Beach, which lies directly south of Buddha Hill.

Zoning Map

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Research & Forecast Report | Pattaya Condominium Market 1H 2014 | Colliers International

Pattaya City can be divided into five zones for the purposes of this report.

Below is a summary of each zone.

Wongamat This is the area to the north of PattayaNua and is considered a more peaceful, up-market location and a relatively new setting for condominium development. Wongamat Beach is considered the finest in Pattaya and boasts several of the higher-end luxury hotels and condominiums. Limited beachfront land should ensure that prices increase in tandem with the popularity of this area with both Thais and foreigners.

Pattaya This area is considered as the city centre. The section of beach from Central Road south to the harbour runs adjacent to the core of Pattaya’s abundant nightlife area. PattayaNua and Klang are the areas favoured by Asian visitors, especially Chinese and Koreans. A large number of expat employees also prefer this location due to easy access to the main highways. The area of South Pattaya is popular among Middle Eastern, South Asian and Russian visitors. The area along Soi 15 Second Road is enjoying resurgence in popularity among buyers.

Jomtien Jomtien Beach is about 1 km south of Pratumnak Hill. The locale is home to many high-rise condominiums, beachfront hotels, shops and restaurants. The area at the beginning of Jomtien is considered busier, while the area located at the end of this beach, known as Na Jomtien, is considered to be much more peaceful and less congested.

Na Jomtien Na Jomtien Beach is south of Jomtien and partially does not have a beachfront road and is less developed as a result. The main road connection is Sukhumvit Road, which is located 500 - 1,000 m from the beach; this area extends to Ban Amphoe Beach and Bangsaray in Sattahip District.

Note: The report covers residential areas located on or west of Sukhumvit Road.

Pratumnak Located to the south of Pattaya and bordering Jomtien, Pratumnak is considered a quiet residential area with a mix of luxury villas, high- and low-rise condominiums. The Pratumnak area features two beaches, Cosy Beach and Haad U Thong, which are popular with Russian and Scandinavian visitors. Restrictions on condo development, limited availability of land and desirability of the area should ensure that property prices in Pratumnak will steadily rise.

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Authors: Surachet Kongcheep Associate Director | Research | Thailand +662 656 7000 surachet.kongcheep@colliers.com Nukarn Suwatikul Director | Head of Agency | Thailand +662 656 7000 nukarn.suwatikul@colliers.com Colliers International (Thailand) 17/F Ploenchit Center Sukhumvit Rd., Klongtoey, Bangkok 10110, Thailand TEL +662 656 7000

Copyright Š 2014 Colliers International.

The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

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Research & Forecast Report | Pattaya Condominium Market 1H 2014 | Colliers International