Pattaya Condominium Market - 1st half 2009

Market Research pattaya C O N D O M I N I U M market PATTAYA CONDOMINIUM MARKET OVERVIEW | 1 s t h a l f | 2 0 0 9

c o l l i e r s i n t e r n at i o n a l

| T H AILAN D

The Knowledge Report Pattaya CON D O M I n I U M m a rk e t |

1 st h a l f

|

2009

PATTAYA CONDOMINIUM MARKET OVERVIEW Market Indicators 1h 2009 2h 2009F

SUPPLY DEMAND take up rate average selling price

The real estate market is big business in Pattaya, especially property development. The key factor of success in developing a condominium in Pattaya is the developers. Larger developers can raise confidence among buyers thanks to their reputation and/or consutrction track record. Based on our experience, unsuccessful condominium projects are not developed professionally and we believe that there is an opportunity for strong new players to start developing true five-star residential projects in Pattaya.

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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 industrialized Eastern Seaboard zone, along with Sri Racha, Laem Chabang and Chon Buri. Pattaya is also the centre of the Pattaya-Chonburi Metropolitan Area, the conurbation in Chonburi Province.

The real estate market is big business in Pattaya, especially property development. Many new buildings have gone up in recent years and some people think the market might be oversupplied.

Some buildings are put up. There is also a market for villas, but its growth is limited.

“Greater Pattaya” 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 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), including Dongtan Beach. Jomtien’s beaches are much broader and generally in better shape, and the atmosphere locally is more sedate and family-oriented than at Pattaya Beach.

The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market

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The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market

Supply Trends Condominium Locations Our study is focused on the major areas of condominium accommodation in Pattaya, which can be subdivided into four main areas: 1. Wongamat: 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. The current developments under construction in this area are Northpoint, The Cove, Ocean’s Edge and many more. The condominium

units in this precinct offer a total supply of 3,434 units. During the first half of 2009, there were four condominium project was added to the supply in the area.

Table 1 : Supply Added in Wongamat Area, 1H 2009

No.

Project Name

Developer

no. of Units

1

Near Beach Residence

T K R Engineering and Supply Company Limited

59

2 3

Wongamat Privacy Condominium D

Royal and Spa Condotel Company Limited

78

Wongamat Privacy Condominium C

Royal and Spa Condotel Company Limited

4

View Talay Residence Condominium VI

76

Siam Best Enterprise Company Limited

79

Source : Department of Land, Pattaya & Colliers International Thailand Research

2. Pattaya: This area is situated alongside the city centre. The section of beach from Central Road (Pattaya Klang) south to the harbour is adjacent to the core of Pattaya’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.

Condominium projects in the vicinity include Northshore, Saratta and Nova Atrium to name just a few. The condominium units in this vicinity total 6,021 units. Three condominium projects were added to the supply in this area in 1H2009.

Table 2 : Supply Added in Pattaya Area, 1H 2009

No.

Project Name

1

The Paradise Residence Condominium

2

Pattaya Klang Centre Point Condominium

3

The Pride – Tower B

Developer

no. of Units

Thanabutchai Realty Company Limited

78

Central Pattaya Centre Point Company Limited

230

Prinsiri Public Company Limited

79

Source : Department of Land, Pattaya & Colliers International Thailand Research

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The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market

3. Pratumnak: This area covers the main thoroughfare connecting Pattaya and Jomtien Beach. The recent trend in the area is the opening of many upscale restaurants along Thappraya Road. Despite this, there are many condominium

units nearby; among them Royal Cliff Garden and Royal Beach Condotel have excellent reputations. This area is also very popular with Scandinavian and Russian visitors.

Table 3 : Supply Added in Pratumnak Area, 1H 2009

No.

Project Name

Developer

no. of Units

1

The Bay View II Condominium

Haven Sky Holding Company Limited

37

2

Villa Norway Residence I

Siam Ruby House Company Limited

21

Source : Department of Land, Pattaya & Colliers International Thailand Research

4. Jomtien: Jomtien beach is about 1 km south of Pratumnak Hill. The locale is home to many high-rise condominiums, beach front hotels, beaches, shops and restaurants. The area at the beginning of Jomtien is considered busy, while the

area located at the end of this beach, called “Na Jomtien�, is considered peaceful and tranquil. There are many plots of vacant land available at Na Jomtien for future development.

Table 4 : Supply Added in Jomtien Area, 1H 2009

No.

Project Name

1

Avatara Condominium

2

View Talay Residence Condominium IV

Source : Department of Land, Pattaya & Colliers International Thailand Research

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Developer

no. of Units

The Grand Iyara Company Limited

31

Siam Best Enterprise Company Limited

79

The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market

Total Current Supply At the end of 2008, the supply of condominium units was approximately 39,555 units. From Jan-Jun 2009, approximately 847 units were added to the supply, bringing the current total supply of condominiums to approximately 40,402 units in Pattaya’s condominium market. The sharp increase in condominiums in

Pattaya was found in 2006, up 18.06% over 2005. The growth rate of new supply is projected to average 9.96% per year from 2003 to 1H 2009.

Figure 1 : Supply of Pattaya Condominium Units, 2003 - 1H 2009

Source : Department of Land, Pattaya & Colliers International Thailand Research

The majority of condominium supply is in the Jomtien area, representing about 65% of the total, followed by the Pattaya

and the Pratumnak areas, representing about 15% and 11%, respectively.

Figure 2 : Supply of Pattaya Condominium Units by Location, 1H 2009

Source : Department of Land, Pattaya & Colliers International Thailand Research

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The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market

Future Supply Approximately 75 condominium projects with over 15,288 units will be launched in 2H2009 and beyond, with the majority in the Jomtien Beach area due to the availability of land and the

favourable location close to the beach, as well as the high density in Pattaya. Future developments will shift to the Baan Amphoe and Bang Saray areas.

Table 5 : Future Supply of Pattaya Condominium Projects, 2H2009-2013f

No.

Project Name

Location

No. of Units

Est. Completion

1

High Point

Wongamat

49

2009

2

Avenue Residence

Pattaya

228

2009

3

Maxx Central

Pattaya

48

2009

4

Pattaya Beach Resort

Pattaya

146

2009

5

TW Pattaya Klang

Pattaya

178

2009

6

Vogue

Pattaya

50

2009

7

Emerald Palace

Pratumnak

43

2009

8

Nova Oceanview

Pratumnak

78

2009

9

Phuview Talay

Pratumnak

79

2009

10

Siam Oriental Twins

Pratumnak

69

2009

11

View Talay Residence 5

Pratumnak

76

2009

12

Boulevard de Jomtien

Jomtien

10

2009

13

Jens Apartment

Jomtien

24

2009

14

Regatta

Jomtien

66

2009

15

Thaiswai Residence

Jomtien

70

2009

16

Sunrise Beach Villa

Jomtien

27

2009

17

Park Royal

Pratumnak

39

2009

18

The Urban Pattaya

Pattaya

168

2009

19

Katilina Residence II

Pratumnak

38

2009

20

North Point

Wongamat

377

2009

21

Poom Patta

Pattaya

158

2009

22

Laguna Heights

Wongamat

80

2009

23

One Pattaya Height

Pratumnak

47

2009

24

Suan Sawan

Pattaya

272

2009

25

Jomtien Beach Mountain

Jomtien

77

2009

26

Pattaya City Resort

Pattaya

192

2009

27

The Sanctury Wongamat

Wongamat

199

2009

28

TW Wongamat Beach

Wongamat

412

2009

29

Royal Beach View

Pratumnak

36

2009

30

La Royale Beach

Jomtien

165

2009

31

The Montrari

Jomtien

18

2009

32

Siam Ocean View

Pratumnak

43

2009

33

Pattaya Heights

Pratumnak

94

2009

34

Life Vela Casa

Wongamat

355

Aug. 2009

35

The Amber Royal Hill Condo

Pratumnak

56

Dec. 2009

36

LK Legend

Pattaya

279

2010

37

Elegance

Pratumnak

79

2010

Remark : The planned projects are based on reports from developers and may be subjected to delay.

Source : Developers announcements and Colliers International Thailand Research

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The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market

Table 5 : Future Supply of Pattaya Condominium Projects, 2H2009-2013f

No.

Project Name

Location

No. of Units

Est. Completion Year

38

On the hill

Pratumnak

31

2010

39

TW Jomtien Beach

Jomtien

216

2010

40

View Talay 7

Jomtien

2,400

2010

41

Royal Residence 2

Jomtien

36

2010

42

Sunrise Royal Scandinavian

Jomtien

125

2010

43

The Urban Suite

Pattaya

79

2010

44

Sunset Boulevard Residence

Pratumnak

126

2010

45

The Ocean Pearl (Phase 1)

Pratumnak

67

2010

46

Tropical Dream

Pratumnak

70

2010

47

The Cove

Wongamat

103

2010

48

Tudor Court

Pratumnak

136

2010

49

Diamand Suite

Pattaya

282

2010

50

Ocean’s Edge

Wongamat

32

2010

51

The Park Jomtien

Jomtien

160

2010

52

APUS

Pattaya

158

2010

53

Tropicana Condotel

Pratumnak

70

2010

54

City Garden Pattaya

Pattaya

366

2010

55

City Condo @ South Pattaya

Pattaya

360

2010

56

Executive Residence 5

Pratumnak

60

2010

57

Jomtien Plaza Condominium

Jomtien

140

2010

58

Jomtien Beach Penthouses

Jomtien

78

Oct. 2010

59

Waterfront

Pratumnak

325

2011

60

Viewtalay Marina Beach Condominum

Jomtien

1,208

2011

61

Wongamat

Wongamat

79

2011

62

Park Lane

Jomtien

608

2011

63

The Pride 2

Pattaya

79

2011

64

Hyde Park Residence

Pratumnak

79

2011

65

Saratta Residence

Pattaya

12

2011

66

Eastpoint Condominium

Pattaya

156

2011

67

The Ocean Pearl (Phase 2)

Pratumnak

67

2011

68

AD Hyatt

Wongamat

512

2012

69

The Loft Southshore

Pratumnak

726

2012

70

W Tower

Wongamat

355

2012

71

Reflection

Jomtien

332

2012

72

Ananya Beachfront Condominium

Wongamat

50

2012

73

Life Star City Tower

Pattaya

116

2012

74

Ocean 1 Tower

Jomtien

611

2012

75

The Chateau

Pratumnak

453

2012

Remark : The planned projects are based on reports from developers and may be subjected to delay.

Source : Developers announcements and Colliers International Thailand Research

A total of 4,146 condominium units will be added to the supply in Pattaya, increasing the total by the end of 2009 to 43,701 units.

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The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market

Figure 3 : Future Supply of Pattaya Condominium Units, 2H2009-2012f

Source: Colliers International Thailand Research

Demand Trends International buyers are mostly tourists who visit Pattaya regularly, with most of them looking for a good return on their investment

in these projects. The following are the target tourists interested in buying Pattaya condominium units.

Figure 4 : international tourists visiting pattaya, 2007 & 2008

Source : THA,TAT & Colliers International Thailand Research

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The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market

1. Russians: Marketing agents and developers identify the main buyers as visitors from Russia. In 2007, 889,656 Russians visited Pattaya, up 84% over 2006, making them the leading market for the resort after only Thais, 1.51 million of whom checked into Pattaya hotels in 2008. However, the number of Russians visited Pattaya has declined in 2008 to 564,483 persons. Although Russians have been visiting Pattaya for more than a decade, only in the past two years have they started to buy up property in Pattaya and the trend is catching on.

2. Expat Market: Located in such centres as Hong Kong, Singapore, Tokyo, Bangkok, Phuket and Chiang Mai, the expat market is attracted by Pattaya’s comparatively low land prices and cost of living. Knowing Asian markets well, they are particularly attracted by a potential yield of circa 9-11% on prime developments and spectacular rates of capital growth, which can be as high as 50%.

3. British: Before the Russians rushed into Pattaya’s property picture, the main buyers were British visitors, many of them looking for a second home aboard and a retirement spot.

4. Scandinavians: Like the Russians, this group has proved a large and growing market for properties in Pattaya and the surrounding areas over the past two years. Another similarity is that sales to both Russian and Scandinavian buyers tend to be handled through their own national networks.

travelling to the area, up 32% over 2002. The important factor behind Korean’s love of Pattaya and as property buyers is their love of golf, as Pattaya has many golf courses in the surrounding area.

6. Middle East: The Middle East has potential in terms of property purchases in Pattaya, with visitors from the region up 25.08% over 2002.

7. India: The number of Indian tourists visiting Pattaya is up 42% since 2002.

8. Thailand: The attitude of Thais towards the resort is as a residential area and they take the following issues into consideration:

- Location: A short distance from Bangkok, with a

driving time of approximately one and a half.

- Geographic area: They prefer to buy a resort property

in a beach rather than a mountain area since the beach

offers many sporting activities for the whole family.

- Completed facilities: These should have restaurants,

entertainment and shopping options.

5. Korean: Korean visitors tend to be interested in buying property in Pattaya due to the increasing number of tourists From 1-15 June 2009 the Land Department in Pattaya shows that the majority of condominium buyers are foreigners, representing 82% of the total, while just 18% of buyers are Thais.

Figure 5 : Proportion of Thais and Foreign Buyers of Condominium Units in Pattaya, Jun 1-15, 2009

Source : Department of Land, Pattaya & Colliers International Thailand Research

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The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market

Approximately 319 second-hand condominium units were sold in the first half of June 2009, while 73 of the total 392 units sold

were newly completed.

Figure 6 : Demand for NEWLY Condominium PROJECTs and Second-Hand comdominium Projects among Thais and Foreigners, Jun 1-15, 2009

Source : Department of Land, Pattaya & Colliers International Thailand Research

Condominium units in highest demand are those measuring less than 50 sq m, representing about 83% of the total, followed by

those between 50 sq m and 99 sq m, representing 14%. Demand for units bigger than 100 sq m represents just 3% of the total.

Figure 7 : Demand for Condominium in Pattaya by unit Size

Source : Department of Land, Pattaya & Colliers International Thailand Research

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Colliers International

The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market

We have measured the absorption of units in projects that were marketed during 2008 and applied this as a proxy for demand during the year.

the end of 1Q2009. Thus, there were approximately 5,701 units available for sale, making the cumulative selling rate of condominium units up until 1Q2009 54.32%.

A total of 12,479 condominium units in Pattaya were marketed in 2008, with the cumulative number of units sold 6,778 at

Figure 8 : Demand for Condominium Units in Pattaya

Source : Colliers International Thailand Research

Demand by Unit Type The most popular type of condominium unit in Pattaya is studio and 1-bedroom types, while the least favourite type is the bigger unit with three bedrooms. However, many units are still

remaining due to the global recession, which slowed down the sales rate in the first half of 2009.

Figure 9 : Demand for Pattaya Condominium by unit Size

Source : Colliers International Thailand Research

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The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market

Demand by Location We have measured the absorption of units by location in newly launched projects during the year and applied this as a proxy for demand by location.

In 2008, the Wongamat area showed the highest absorption rate, with the percentage sold at 59.96%. This area was followed by the Pratumnak and Pattaya areas, with 42.88% and 30.29%, respectively. The percentage sold in the Jomtien area was the lowest, at only 13.98% of the total number of units launched

in 2008. Demand for condominium units in the Jomtien area showed to be the worst performance due to the high number of units currently available and over supply in the area. In an economic downturn, all consumers, except those in the livefor-today segment, typically re-evaluate their consumption priorities.

Figure 10 : sales proportion of Newly Launched Units in 2008 by Location

Source : Colliers International Thailand Research

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Colliers International

The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market

Price The sales price on all projects varies considerably, depending on the launch time, the project/unit design, level of interior finish, facilities, location and quality of the product.

The condominium market in Pattaya is attractive to both Thais and foreigners, due to its proximity to Bangkok and the number of completed facilities in the area. The key factor when purchasing property is location. It is significant to consider the property’s surroundings, access and convenience of infrastructure. Pricing

alone is not the top priority. Another critical element is timing and identifying the right property.

The average sales price will vary according to location, building specifications and decoration. In order to clarify the price, we will focus on the following locations since condominium prices are a function of land prices, which depend on location.

Table 6 : Average Selling Price of Condominium Units in Pattaya, 1H 2009

Area

Average selling price

Wongamat

THB90,000–135,000

Pattaya

THB85,000–120,000

Pratumnak

THB70,000–110,000

Jomtien

THB95,000–130,000

Source : Colliers International Thailand Research

During the global recession, there has been some demand for Pattaya condominiums, although the majority of this demand is for self-use, rather than as an investment. From the data of the Department of Land, Pattaya, from Jun 1-15, 2009, it can be seen that the highest number of condominium units sold in Pattaya were those units with prices below THB 1 million, while the lowest numbers sold were those in the price range of above THB10 million. High-end properties, not only in Pattaya

but in all areas, are seeing some of the largest declines. This is not surprising since the buyers in this sector of the market are typically cash rich, astute business people who know that they have a good chance of securing a better deal by holding off. In the low end of the market, mortgages can be harder to secure and, with this sector poised to become more crowded as prices decline, some time will likely need to pass before demand starts to pick up.

Figure 11 : Demand for Pattaya Condominium by Price Range, Jun 1-15, 2009

Source : Department of Land, Pattaya & Colliers International Thailand Research

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The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market

Outlook: Facilities, activities and infrastructure in Pattaya has been developed continually, with many new developments to serve the residents. The retail market is complete as Avenue Pattaya and the Central Festival Pattaya Beach. Shopping centres make it convenient for the residents in terms of offering daily products and services.

In addition, premium or luxurious products and services can be found in Pattaya, including international medical centres and schools.

The key factor of success in developing a condominium in Pattaya is the developer, who should have proper funding and strong experience in condominium, residential or hotel developments. Larger developers can raise confidence among buyers thanks to their reputation and/or construction track record. A prime condominium site should be on the beachfront or a hillside site that offers sea views and beach access, also providing buyers with a level of privacy. The right products also need to be provided to meet the current trends in demand. Based on our experience, unsuccessful condominium projects are not developed professionally and we believe that there is an opportunity for strong new players to start developing true five-star residential projects in Pattaya.

Notes The condominium rating used in our research is based solely on property ratings and the rates achieved obtained from market research. The rating system used in our report is not that of Colliers International.

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This report and the figures shown herein has been prepared

by Colliers International as a guide only. Any interested party seeking to rely on the contents should undertake its own enquiries as to the accuracy of the information. Colliers International does not guarantee, warrant the accuracy or represent the information contained in this document, and excludes unequivocally all inferred and implied terms, conditions and warranties arising out of this document, as well as all liability for loss and/or damage arising therefrom, including any loss of profits, business or anticipated savings.

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