year end 2010 | CondominiumTHAIlANdBangkok Condominiummarket rePort                                             Bangkok Co...
Bangkok Condominium market rePort | Q4 2010                             NEwly lAuNCHEd CoNdomINIum uNITS duRINg THE yEAR 2...
Bangkok Condominium market rePort | Q4 2010ZoNINg          HISToRICAl Supply by yEAR         CumulATIvE Supply IN bANgKoK ...
Bangkok Condominium market rePort | Q4 2010• CITY AREA                                                                    ...
Bangkok Condominium market rePort | Q4 2010            A COmpARISON OF NEWlY lAUNChEd UNITS BY lISTEd COmpANIES ANd NON lI...
Bangkok Condominium market rePort | Q4 2010                              NEWlY lAUNChEd CONdOmINIUm UNITS IN NORThERN FRIN...
Bangkok Condominium market rePort | Q4 2010                                              ToTAl HISToRICAl Supply by loCATI...
Bangkok Condominium market rePort | Q4 2010                                        AddITIoNAl Supply pER QuARTER | CITy AR...
Bangkok Condominium market rePort | Q4 2010FUTURE SUpplY – URBAN BANGKOK                          CUmUlATIvE FUTURE SUpplY...
Bangkok Condominium market rePort | Q4 2010TAKE up                                      SAlES pROpORTION OF NEWlY lAUNChEd...
Bangkok Condominium market rePort | Q4 2010                                 AvERAGE SAlES pROpORTION OF NEWlY lAUNChEd UNI...
Bangkok Condominium market rePort | Q4 2010                                         TAKE up RATE IN pRoxImITy To ExISTINg ...
Bangkok Condominium market rePort | Q4 2010INITIAl lAuNCH pRICES                                         AvERAGE SEllING p...
Bangkok Condominium market rePort | Q4 2010mASS TRANSIT – THE dRAw ANd THE dRAwbACKin a survey in the Journal of the easte...
Bangkok Condominium market rePort | Q4 2010FINANCING                               hOUSING lOANS FOR pERSONAl CONSUmpTION ...
Bangkok Condominium market rePort | Q4 2010FORECASTStrong concerns about the booming condominium market continue in       ...
Bangkok Condominium market rePort | Q4 2010CollIERS INTERNATIoNAl THAIlANdmANAgEmENT TEAm                                 ...
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Bangkok Condominium Market Report Q4 2010

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Bangkok Condominium Market Report Q4 2010. Supply, new launches, prices.

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Bangkok Condominium Market Report Q4 2010

  1. 1. year end 2010 | CondominiumTHAIlANdBangkok Condominiummarket rePort Bangkok Condominium Market ExECuTIvE SummARy new launches in Q4 2010 continued to surge on the back of continued confidence in the residential market and affordable units being offered by developers. overall 2010 represented a landmark year for the condominium market with over 60,000 units being launched in total. 2011 is set for another strong year for condominium launches but is then expected to moderate and a supply bubble is likely to be avoided as developers and authorities pay close attention to the market and its constraints. this year will represent a move from boom to consolidation. mARKET INdICAToRS developers are dividing their attention to both urban and suburban Bangkok, with a similar number 2009 - 2010 being launched in both areas. Suburban Bangkok still remains firmly on the radar with listed developers targeting the low to mid end segment of the market, however non-listed developers are Supply fighting back in Q4 2010 with many players launching smaller scale projects thus providing healthy lAuNCHES competition in the market. pRICES issues regarding transport access to mass transit stations mean that the positive effects of these lines is not being fully realized and could be a problem for future new lines. TAKE-upwww.colliers.co.th
  2. 2. Bangkok Condominium market rePort | Q4 2010 NEwly lAuNCHEd CoNdomINIum uNITS duRINg THE yEAR 2009 – Q4 2010 by QuARTER Source : Colliers international thailand researchnewly launched units in the fourth quarter of 2010 slightly decreased but were resumed in Q3 and then continued forwards for Q4 2010. thefrom Q3 2010 by 2,500 units. approximately 20,000 units were launched total number of newly launched units in 2010 was approximately 61,000,in Q4 2010. many launches were put on hold due to the protests in Q2 a nearly 80% increase from 2009.COLLIERS INTERNATIONAL | P. 2
  3. 3. Bangkok Condominium market rePort | Q4 2010ZoNINg HISToRICAl Supply by yEAR CumulATIvE Supply IN bANgKoK COLLIERS INTERNATIONAL | P. 3
  4. 4. Bangkok Condominium market rePort | Q4 2010• CITY AREA • OUTER CITY AREAthe area covers four adjacent but competing sub-markets: the Sukhumvit the area covers two parts of Bangkok:section comprising Sukhumvit road between Soi 1 and Soi 55 to thenorth and Soi 2 and Soi 38 to the south; the Central Lumpini section o Outer City (East): this section starts from the extension of the BtSincluding Phloen Chit road, rama i road, Soi Langsuan, Soi Sarasin, route at on nut Station to the Bangkok boundary to the east.Chitlom road ratchadamri road, Witthayu road and rachaprasong o Outer City (West): this section starts from the extension of the BtSroad; the Silom / Sathorn section; and the riverside section fronting the route at taksin Station to Bang Wa station which includes the area fromChaophraya river along Charoenkrung road and Charoennakorn road, krung thonburi road to ratchaphruek road near Petchakasemwhere several five-star hotels are located. the City area is convenient intersection.for businessmen, expatriates and tourists, because of its proximity tomany office buildings, retailing and local attractions. • SUBURBAN BANGKOK these are the environs outside the areas already mentioned. expansion• CITY FRINGE AREA of the mass transit system is the main determinant for increasing futurethis area covers three parts of Bangkok: supply in a particular area. the expansion from on - nut to Samut Prakarn is scheduled to be completed in 2011. the expansion of the BtSo Northern Fringe: this section covers the BtS route starting from will benefit directly the surrounding condominiums, as it will considerablyratchathewi Station to mo Chit Station to the north and the mrt route reduce transportation costs and time. this will encourage the developmentstarting from Petchaburi station to Bangsue station to the north. of new condominiums in this area. Suburban Bangkok represents theo Southern Fringe: this section covers narathiwad ratchanakarin road, biggest area and for the purposes of this report includes Bangkok city oldChan road, Sathupradit road, Charoenkrung road and rama iii road town (koh rattanakosin area and boundary area). this location hasalong the Chaophraya river. comprehensive town planning controls restricting building height, soo Eastern Fringe: this section covers the BtS route starting from thong there are no condominium projects in the area.Lor Station to on nut Station to the east, rama iV road and Petchaburiroad,this area covers locations with their own local infrastructure andconvenient transportation but require commuting to have access to thecentral business and entertainment areas. NEwly lAuNCHEd CoNdomINIum uNITS IN Q4 2010 by loCATIoN Source : Colliers international thailand researchin Q4 2010 the suburban Bangkok area slightly trumped urban Bangkok LPn development Plc. launched the “Lumpini Park riverside rama 3”, awith the higher number of units launched. new riverside condominium project on rama 3 road in the Southern Fringe area with a total of 2,405 units and this was the largest project inWithin urban Bangkok, the eastern Fringe area has shown the highest this quarter and for the year as a whole.numbers with approximately 3,500 units, a nearly 31% increase from Q3.the northern Fringe came very close second.COLLIERS INTERNATIONAL | P. 4
  5. 5. Bangkok Condominium market rePort | Q4 2010 A COmpARISON OF NEWlY lAUNChEd UNITS BY lISTEd COmpANIES ANd NON lISTEd COmpANIES dURING Q1 2009 – Q4 2010 Source : Colliers international thailand research remark : Listed companies include subsidiariesin Q4 of 2010 listed companies still served up the largest share of newly this quarter is the highest of the past two years. many are smaller inlaunched units, although the number of newly launched units by non scope than those put on the market by the listed developers but lesserlisted companies increased from Q3 by approximately 1,300 units known developers are once again dipping their toes into the condominiummeanwhile newly launched units by listed companies decreased by pond.nearly 2,400 units. the newly launched units by non listed companies NEwly lAuNCHEd CoNdomINIum uNITS IN CITy AREA, Q1 2009 – Q4 2010 Source : Colliers international thailand researchmore than 2,500 units were launched in the City area for Q3, but in the protests which began in February 2010 but was ratcheted up in aprillast quarter of 2010 just 400 units were launched. the limited number and may. this delayed launches to Q3 2010.of launches in the first half of the year was a direct consequence of the COLLIERS INTERNATIONAL | P. 5
  6. 6. Bangkok Condominium market rePort | Q4 2010 NEWlY lAUNChEd CONdOmINIUm UNITS IN NORThERN FRINGE AREA, Q1 2009 – Q4 2010 Source : Colliers international thailand researchnewly launched condominium units in the northern Fringe area 3,300 units in Q4.dramatically increased to more than 4,300 units in Q3 and approximatelyHISToRICAl Supply SUpplY OF CONdOmINIUm UNITS 1994 - 2010 Source : department of Land, Colliers international thailand research remark : the number of units does not include projects from the national Housing authorityonly approximately 6,000 new condominium units were completed and 2009 of nearly 15%. this decline is a reflection of the onset of the globalregistered at the department of Land in Q4 2010 and the total number in Financial Crisis which led to developers putting plans on hold and this is2010 was approximately 24,700 units, which represented a fall from now affecting the figures for new supply.COLLIERS INTERNATIONAL | P. 6
  7. 7. Bangkok Condominium market rePort | Q4 2010 ToTAl HISToRICAl Supply by loCATIoN To Q4 2010 Source : department of Land, Colliers international thailand researcharound 66% of total condominium units are located in the suburban proximity to the centre, mass transit connections and relatively lowerBangkok area with a total of more than 190,000 units. Within the urban land prices compared to the City area.Bangkok area, the northern Fringe contains the most units due to its COLLIERS INTERNATIONAL | P. 7
  8. 8. Bangkok Condominium market rePort | Q4 2010 AddITIoNAl Supply pER QuARTER | CITy AREA, Q1 2009 – Q4 2010 Source : Colliers international thailand researchapproximately 770 units were added in Q4 2010 and so total supply in scheduled to be completed in 2011.this area amounted to around 23,000 units. roughly 6,600 units are AddITIONAl SUpplY pER QUARTER | NORThERN FRINGE AREA, Q1 2009 – Q4 2010 Source : Colliers international thailand researchapproximately 2,600 units were added in Q4 2010, a significant addition ratchadapisek, ari and Sutthisan road. the northern Fringe contains afrom just over 500 in Q3. this area still remains the main target for significant number of BtS and mrt stations, the key public transportationcondominium projects in the near future, especially Phahonyothin, arteries in Bangkok.COLLIERS INTERNATIONAL | P. 8
  9. 9. Bangkok Condominium market rePort | Q4 2010FUTURE SUpplY – URBAN BANGKOK CUmUlATIvE FUTURE SUpplY SChEdUlEd TO BE COmplETEd dURING ThE YEAR 2011 – 2013 BY lOCATION IN URBAN BANGKOK. (AS OF Q4 2010) Source : Colliers international thailand research remark : Supply does not included unit in Suburban Bangkokapproximately 25,000 units are scheduled to be completed in 2011. the followed by the City area with a total number of around 6,700 units. it isnorthern Fringe area continues to be the main player in urban Bangkok expected that the northern Fringe will continue to dominate supply forwith approximately 10,700 units scheduled to be completed in 2011 and the early part of the decade in urban Bangkok. COLLIERS INTERNATIONAL | P. 9
  10. 10. Bangkok Condominium market rePort | Q4 2010TAKE up SAlES pROpORTION OF NEWlY lAUNChEd UNITS IN Q4 2010 BY lOCATION Source : Colliers international thailand researchthe average take up rate of newly launched condominiums in 2010 was nut-Bearing extension line spurred take up in the outer City- east area.around 56% representing a decrease from 61% in 2009. Considering thenumber of units launched for 2010 this number is still a robust one. in the fourth quarter the Bank of thailand introduced measures to control the condominium market, with a loan-to-value of 90 percent of newthe occupancy rate in the Southern Fringe area was the highest followed condominium units below 10 million baht as of January 1 of 2011. thisby the City area and outer City - east area. the positive figures for the new policy had a positive effect on the market in Q4 of 2010, becauseSouthern Fringe are the result of a popular newly launched project from buyers were more likely to make a decision to buy by the end of theLPn development in the Southern Fringe area. the progress of the on year.COLLIERS INTERNATIONAL | P. 10
  11. 11. Bangkok Condominium market rePort | Q4 2010 AvERAGE SAlES pROpORTION OF NEWlY lAUNChEd UNITS IN 2010 BY lOCATION Source : Colliers international thailand researchthe average take up rate for newly launched condominium projects in northern Fringe. many BtS / mrt stations are located in this area andBangkok in the year 2010 was approximately 56%. the take up rate in the selling prices are still lower than other areas along mass transit line,the northern Fringe area is the highest followed by the City area and such as Sukhumvit, Silom, rajadamri and Phayathai road.suburban Bangkok area. Various factors explain the high numbers for thelAuNCHES wITH HIgH TAKE up RATES IN Q4 2010onyx Phahonyothin by Sansiri Plc. showed the highest take up rate of baht per sq m. unit area starts from 25 sq m for a studio unit up to 67.5almost 100% of its 620 units with a selling price of more than 90,000 sq m for 2 bedroom units. the project is located on Phahonyothin road approximately 550 meters from BtS Saphan kwai Station. regent Home 13 Sukhumvit 93 by regent green Power Co., Ltd. is located in Sukhumvit soi 93 with a total of 270 units in the outer City – east area and had one of the highest take up rates. the building contained only studio units at just 31 sq m with a selling price of lower than 1,000,000 baht per unit. COLLIERS INTERNATIONAL | P. 11
  12. 12. Bangkok Condominium market rePort | Q4 2010 TAKE up RATE IN pRoxImITy To ExISTINg mASS TRANSIT lINES Q4 2010 Source : Colliers international thailand researchthe take up rate of projects 501 – 1,000 meters from BtS / mrt was magnet for buyers, the selling price is also higher than other areas, sohighest at around 60% and similar to the area more than a kilometre many buyers are more interested location 501 – 1,000 meters from afrom the BtS/mrt. While access to mass transit remains a strong mass transit station which represents more affordable units. THE AvERAgE TAKES up IN pRoxImITy To ExISTINg mASS TRANSIT STATIoNS IN THE yEAR 2010 Source : Colliers international thailand researchthe take up rate of condominium projects within 200 meters of mass of the way sois and poor feeder systems but with selling prices still hightransit stations came close to 72%, a high figure considering the relatively or similar to projects located on the main road or nearer to BtS / mrthigher prices. However projects located 201 – 500 meters from BtS / lines. Projects located further than 1,000 meters came second at nearlymrt lines showed the lowest rate of around 41%. this figure is due to 65% due to the lower selling price of projects.many projects being located away from the main road, sometimes in outCOLLIERS INTERNATIONAL | P. 12
  13. 13. Bangkok Condominium market rePort | Q4 2010INITIAl lAuNCH pRICES AvERAGE SEllING pRICES OF NEWlY lAUNChEd pROjECTS Q1 – Q4 2010 Source : Colliers international thailand researchthe average selling price in the City area is still highest at nearly 110,000 new BtS extension line and many projects in this area are high-endBaht per sq m, and the average selling price in Q2 and Q4 was higher ones, therefore the average selling price is higher than other areas.than 100,000 Baht per sq m. the outer City –West is the area along thelAUNCh pRICES : mASS TRANSIT EFFECT SEllING pRICES OF NEWlY lAUNChEd pROjECTS BY pROxImITY TO mASS TRANSIT lINES (BTS ANd mRT), Q1 - Q4 2010 Source : Colliers international thailand researchthe average selling price in the City area is still highest at nearly 110,000 new BtS extension line and many projects in this area are high-endBaht per sq m, and the average selling price in Q2 and Q4 was higher ones, therefore the average selling price is higher than other areas.than 100,000 Baht per sq m. the outer City –West is the area along the COLLIERS INTERNATIONAL | P. 13
  14. 14. Bangkok Condominium market rePort | Q4 2010mASS TRANSIT – THE dRAw ANd THE dRAwbACKin a survey in the Journal of the eastern asia Society for transportationStudies, Vol.8, 2009 called “influences of Paratransit as a Feeder ofmass transit System in developing Countries Based on CommuterSatisfaction”, commuters to on nut BtS and Huay khwang mrt wereasked various questions regarding how they access the stations. Fiftyfive percent of those living within one kilometre of a station walk to thestation while 30% take motorbike taxi and 10% take a bus or songtaew.Within 200 metres a walk does not offer much discomfort in regards tothe heat, however after this distance a walk becomes more onerous andthe appeal of a motorbike becomes much stronger. in the same surveyusers of this mode of transport were dissatisfied with the cost as well assafety and weather protection. this likely accounts for the reduced effecton pricing after 200 metres from the mass transit stations. in generalterms the feeder systems to the mass transit stations are consideredpoor with a low satisfaction in the survey with the waiting times, poorscheduling, en-route stops and the comfort of songtaews. this meansthat little pricing premium results from locations further than 200 metersand therefore mass transit lines are not making the most of theirinfrastructure.TRENdSIN ThE YEAR 2010 lISTEd dEvElOpERS ARE FOCUSINGmoRE IN THE SubuRbAN bANgKoK AREA ANd lowER -mId RANgE mARKETin 2009 listed developers and their subsidiaries accounted for around18,000 condominium units launched in Bangkok but in 2010 more than41,000 units were launched representing an increase of 122%. Just overhalf of the total units of listed developers were located in suburbanBangkok where the selling price is lower than 3 million baht per unit.this was the result of listed companies setting up new brands to focuson the growth in the lower – mid range market and most of these arelocated in the suburban Bangkok area due to lower land prices. thissituation may affect non listed companies penetrating the market in thenear future, as projects from a listed company can be more attractive tobuyers with usually better financing options and brand strength. Howeversmaller developers are fighting back with smaller scale projects.NEW pOlICIES FROm BANK OF ThAIlANd TO CONTROl ThE CONdOmINIUm mARKETthe Bank of thailand introduced measures to control the condominium this will also affect small and medium sized developers, due to themarket in the last quarter of 2010, with a 90 percent loan-to-value limit reduction in the purchasing power of buyers. the gradual increase inon new condominium units below 10 million baht as of January 1 of interest rates is also likely to act as a dampening on condominium2011. launches going forward.the Bank of thailand’s policies will affect to the decision of the buyersin 2011, as they need to have at least 10% of total value whereas in 2010some commercial banks provided 100% loans with zero down payment,COLLIERS INTERNATIONAL | P. 14
  15. 15. Bangkok Condominium market rePort | Q4 2010FINANCING 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 change is comparable quarter to quarter.the growth rate of housing loans increased more than 3% in Q3 2009 housing loans in that period compared to other periods. the amount of– Q1 2010 because of the government’s incentives attracted buyers to loans continues to grow but at a more sustained pace.purchase and transfer by the second quarter of 2010. this boostedTHE luxuRy CoNdomINIum mARKET luxuRy CoNdomINIum uNITS lAuNCHEd duRINg Q1 2009 – Q4 2010 Source : Colliers international thailand researchSansiri Plc launched a new project with approximately 140 units located dropped from Q3 by around 80%. this market segment continues to beon Sukhumvit road but newly launched luxury condominium units a bit player in the overall condominium market. COLLIERS INTERNATIONAL | P. 15
  16. 16. Bangkok Condominium market rePort | Q4 2010FORECASTStrong concerns about the booming condominium market continue in although there has been no tangible progress on some lines, manythe midst of more planned launches of condominium developments over property developers are already scrambling to occupy land along plannedthe coming year. most developers do not launch on a whim but rather lines and are scheduled to develop projects or starting progress alongstudy the demographics and income levels in regards to future demand the more advanced Purple Line (Bang Sue – Bang Yai) and the greenfor their products. as such it appears that target markets remain in Line (Wongwian Yai – Bang Wa). the issue confronting developers isvarious income categories, especially the lower levels that have only how to make projects relatively close to mass transit lines more attractiverecently been tapped in earnest. the city continues to grow along with to buyers using improved ways for residents to access stations fromaverage incomes and for the foreseeable future a market will exist for their homes. regular, comfortable and affordable paratransit (from homeparticular products. take up will slacken as buyers take their time in to mass transit station) would be the best way for this to happen.choosing a place to live. the days of one day sell outs are behind us developers should consider retail/transport hubs on station locationswhich points to a more mature market for lower end condominium units. connected by efficient bus feeder systems or even a light monorail asthe frenetic pace of launches will lessen over time but the condominium has been suggested by one developer.success story has a long way to go.mass transit remains a key factor to attract the developers and buyers.the ministry of transportation has announced a master plan of BtSextension lines covering the Bangkok metropolitan and vicinity area.COLLIERS INTERNATIONAL | P. 16
  17. 17. Bangkok Condominium market rePort | Q4 2010CollIERS INTERNATIoNAl THAIlANdmANAgEmENT TEAm 480 offices in 61 countries on 6 continentsreSidentiaL SaLeS & LeaSing united States: 135 • the third largest commercialnuttaya Junhasavasdikul | manager real estate services company in Canada: 39 the world Latin america: 17ProJeCt SaLeS & marketing • the second most recognised asia Pacific: 194Wasan rattanakijjanukul | manager commercial real estate brand emea: 95 globallyadViSorY SerViCeS • uS$2 billion in annual revenuenapatr tienchutima | manager • over 2 billion square feet under managementoFFiCe & induStriaL SerViCeS • over 15,000 professionalsnarumon rodsiravoraphat | Senior managerretaiL SerViCeSasharawan Wachananont | Senior managerreaL eState management SerViCeS CoLLierS internationaL thaiLand:Bandid Chayintu | associate director Bangkok office 17/F Ploenchit Center,adViSorY SerViCeS | HoSPitaLitY 2 Sukhumvit road, klongtoey,Jean marc garret | director Bangkok 10110 thailand TEl +662 656 7000inVeStment SerViCeS FAx +662 656 7111nukarn Suwatikul | Senior manager EmAIl info.th@colliers.com Pattaya officereSearCH 519/4-5, Pattaya Second road (opposite Central Festivalantony Picon | Senior manager Pattaya Beach), nongprue, Banglamung, Chonburi 20150Surachet kongcheep | manager TEl +6638 427 771 FAx +6638 427 772VaLuation & adViSorY SerViCeS EmAIl info.pattaya@colliers.comnicholas Brown | associate directorPhachsanun Phormthananunta | managerPattaYa oFFiCemark Bowling | Sales managerSupannee Starojitski | Business development manager RESEARChER: RESEARChER: thailand thailand antony Picon Surachet kongcheep Senior manager | research manager | research EmAIl antony.picon@colliers.com EmAIl surachet.kongcheep@colliers.com this report and other research materials may be found on our website at www.colliers.co.th. Questions related to information herein should be directed to the research department at the number indicated above. this document has been prepared by Colliers international for advertising and general information only. Colliers international makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. any interested party should undertake their own inquiries as to the accuracy of the information. Colliers international excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. Colliers international is a worldwide affiliation of independently owned and operated companies. accelerating success.www.colliers.co.th

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