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Pattaya Condominium Market Report from Colliers H1 2011


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Pattaya Condominium market Report from Colliers International Thailand

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Pattaya Condominium Market Report from Colliers H1 2011

  1. 1. H1 2011 (Half Year) | condominiumTHAIlANdPattaya City Condominiummarket rePort Pattaya City Condominium Market HIgHlIgHTS More units were launched onto the market for the first half of the year compared with the whole of 2010. Around 1,000 units were supplied in Pattaya for H1 2011. mARKET INdICAToRS A large listed developer made a strong vote of confidence in Pattaya city with its first launch in the city with a significant number of units. H2 2010 - H1 2011 The second home market is being targeted for H1 in particular through large scale Supply developments. lAuNCHES The Pattaya growth story continues apace. pRICES TAKE-upNEw lAuNCHES powER pATTAyA mARKET NEwly lAuNCHEd IN H1 2011 Newly launched units in the first half of 2011 were significantly higher than the total launched in the whole of last year. This was due to two new projects being launched in the first half of 2011 with more than 1,400 units per project. Source : Colliers international thailand
  2. 2. PattaYa citY condominium rePort market | H1 2011 (HAlf YeAr)dESCRIpTIoNPattaya 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. 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 Buddha Hill headland (immediately south of Pattaya beach), and a smaller southern section covering the areato the east of Jomtien beach, which lies directly south of Buddha Hill.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.COLLIERS INTERNATIONAL | P. 2
  3. 3. PattaYa citY condominium rePort market | H1 2011 (HAlf YeAr)Supply HISToRICAl Supply CumulATIvE Supply IN BANgKoK Source : Department of land and Colliers International Thailand Note : figures now include Na Jomtien areaAt the end of H1 2011, the total supply amounts to approximately 45,600 engine for demand as they do now, although many were beginning to units. for H1 2011, more than 1,000 units were added to supply and benefit from the economic boom and consequently purchasing property. nearly 2,900 units are scheduled to be completed in the second half of The next surge in growth was the result of the economic boom that 2011. peaked in 1997 before the fall. A more limited but sustained level of supply came onto the market in the first few years of the new century The foundation for the condominium market occurred in 1992 with the but picked up in the latter half of the last decade.development of large scale condotel style properties such as Metro Jomtien. This was the result of the Condominium Act in 1989 which opened the door for the development of high rise residences. Initial demand came from foreign buyers as Thais did not provide the significant COLLIERS INTERNATIONAL | P. 3
  4. 4. PattaYa citY condominium rePort market | H1 2011 (HAlf YeAr) Supply By zoNE Source : Colliers international thailand researchThe initial surge in supply in the city was dominated by Pattaya. However onwards, Wongamat has increased dramatically with the addition of in 1997 a significant addition was made to Jomtien supply by the Jomtien nearly 3,000 units in the past six years and is now on a par with Beach Condominiums (known as rimhat). The two areas continued to be Pratumnak. Na Jomtien has been the laggard, primarily due to the the main target for developments up to the present day. Jomtien has absence of a road running along the coast and available land in more since overtaken Pattaya due to the greater availability of land, especially accessible locations in the city.close to the sea. The Pratumnak and Wongamat areas have developed on a lower trajectory of growth over this period. from the year 2005 CoNdomINIum Supply By loCATIoN, H1 2011The largest condominium supply is in the Jomtien area, representing about 41% of the total, followed by 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 140, which is similar to projects in the Wongamat and Pratumnak areas. The figure for Jomtien area is around 360 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 space 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 were and still remain available for larger scale projects. Source : Colliers international thailand researchCOLLIERS INTERNATIONAL | P. 4
  5. 5. PattaYa citY condominium rePort market | H1 2011 (HAlf YeAr)fuTuRE Supply CumulATIvE fuTuRE Supply By yEAR ANd loCATIoN Source : Colliers international thailand researchMore than 2,900 units are scheduled to be completed and transferred Pratumnak is set to be the main player in the Pattaya city condominium during the second half of 2011 which represents an increase of just over market, due to many projects being launched in the past three years. 6% in total supply and more than 4,100 units are scheduled to be This area is especially popular for the surging russian market. Also most completed and transferred in 2012. During the years 2011 – 2013 projects are located on the hill with good views overlooking the beach. NEwly lAuNCHEd uNITS IN H1 2011 By loCATIoN ANd HAlf yEAR Source : Colliers international thailand researchNew launches for H1 2011 were more than double from the second half Condotown North Pattaya – Sukhumvit had an official launch on 9 May of last year. The Wongamat area contained by far the most highest 2011 in which they sold approximately 500 units or 35% from the total followed by Jomtien area. The main reason for the number for Wongamat 1,442 units on the first day. All units in the project are one bedroom with is due to the new project by lPN Development Plc. Jomtien’s strong one size of 22.5 sq m and a starting price of THB 699,000 per unit. In showing is a result of the launch of a large new project by A.D. House addition to this they plan to launch a new project in the Jomtien area Co., ltd. located on the beachfront road in October and later for another project in Wongamat area.lPN Development Plc. launched its first ever condominium project in Pattaya city on Sukhumvit road in the Wongamat area. lumpini COLLIERS INTERNATIONAL | P. 5
  6. 6. PattaYa citY condominium rePort market | H1 2011 (HAlf YeAr)CoNdomINIum pRojECTS wITH HoTEl mANAgEmENTThe trend for residences with hotel management or a hotel component is taking shape in Pattaya city with four projects on the market adopting this method. 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 loCATIoN 1 Movenpick White Sand Beach Pattaya na Jomtien 2 Amari residence Pattaya Pratumnak 3 Centara Avenue residence & Suites Pattaya Pattaya 4 Park Plaza Waterfront Pratumnak Source : Colliers international thailand researchdEmANd TAKE-up RATE of lAuNCHEd pRojECTS SINCE 2010 Source : Colliers international thailand researchThe average take-up rate for the whole of Pattaya city has increased by made the average take-up rate in the area fall by more than 18% an average of approximately 2% from the second half of 2010. The take-up rate of three locations has increased by an average of approximately The average take up rate in Wongamat area was the highest with over 12.5% from the second half of 2010 and the other two locations, Jomtien 70% which resulted from the successful launch of the first Pattaya city and Pattaya recorded significant decreases. project from lPN Development even though this project has a total of more than 1,400 units.During the first six months, three new projects were launched in the Pattaya area with approximately 700 units and most of them were put on No new project was launched in the Na Jomtien area but the construction the market in the last two months of first half of 2011. This had a direct progress of the current developments in this area has shown good negative impact on average take up rates in the area. A new project was progress which has lead to greater confidence leading to improved launched in the Jomtien area containing more than 1,500 units, which sales.COLLIERS INTERNATIONAL | P. 6
  7. 7. PattaYa citY condominium rePort market | H1 2011 (HAlf YeAr)foREIgN owNERSHIp / domESTIC dEmANdIn contrast to the Bangkok market, foreigners take up the lion’s share of The russian market is a particularly strong one and is further increasing. lower end condominiums in Pattaya and Jomtien as many are retirees Many come from the eastern part of the country where countries like with limited financial resources and foreign Bangkok residents looking Thailand are in closer proximity than the Black Sea, Greece or Turkey for an inexpensive holiday home. This has meant that for units below 2 which are popular with Muscovites for example. Many in the east work million Baht there is often a dual pricing structure resulting from the in the energy and mining industries and can earn a great deal of money. 49% foreigner owner limitations. In the newly emerging upmarket Due to the generally poor level of english most are attracted by the residential markets of Wongamat and Pratumnak, local buyers are the russian language infrastructure of Pattaya city with menus, signs and main driver and there are far fewer dual pricing policies. Often local information in the Cyrillic alphabet as well as russian speakers, both buyers are attracted by better payment terms compared to foreign buyers native and thai to assist them.and therefore the developers financing structure can have a significant bearing on the local buying component. AddITIoN of populATIoN ovER 65 IN SElECTEd CouNTRIES Source: United Nations population Division and Colliers International Thailand researchSignificant numbers of retirees will come from countries that are large standard of living in a warmer climate. The russian market, already the markets for the Pattaya tourist industry and consequently potential strongest one in terms of foreign buyers could see further growth on residents in the future. With lower government pension provisions back of an increase in retirees in the second half of the decade. The lure expected in the era of the greying babyboomers, many in the west may of tropical Pattaya could be the prefect antidote to the severe russian choose to live their remaining days in a country offering them a better winters. COLLIERS INTERNATIONAL | P. 7
  8. 8. PattaYa citY condominium rePort market | H1 2011 (HAlf YeAr) CHANgE IN CuRRENCy To THAI BAHT Source: Bank of thailand and Colliers international thailand researchPattaya as well as other resort towns in Thailand have been hampered strong commodities sector enhancing the value of the currency. This by the strength of the Thai Baht against currencies of the vast majority goes some way to explaining why more Australians are buying resort of foreign demand. However in the past six months currencies have property throughout Thailand, including Pattaya, as well as the prohibitive recovered although the fraught financial situation of many governments prices of coastal real estate in Australia. The average price for an in europe as well as the USA can add more pressure on the euro and apartment on the Gold Coast in Q2 2011 is 16.5 million baht.dollar in the future. The Australian dollar has bucked the trend with its HISToRICAl pERSpECTIvEQ4 1992 1 uS$ = 25.5 THAI BAHT 1 uK pouNd = 39 THAI BAHTIt is interesting to note that the beginning of significant foreign Crisis led to a severe depreciation of many currencies in Asia and even condominium buying which took off in 1992 was also a time of a very now in Thailand exchange rates have still not returned fully to pre-Asian strong Thai baht against many major currencies. The Asian financial crisis levels despite the financial travails in the past few years.COLLIERS INTERNATIONAL | P. 8
  9. 9. PattaYa citY condominium rePort market | H1 2011 (HAlf YeAr)pRICE AvERAgE SEllINg pRICE of ToTAl uNITS By loCATIoN, AS of H1 2011 Source: Colliers international thailand researchThe average selling price in Wongamat remains the highest, although 2011 by around 0.5 – 10%. The average selling price in Jomtien showed this dropped from the second half of 2010 by around 17%, due to the the highest increase due to A.D. House launching its new project on average selling price of the new condominium project by lPN which has Jomtien Sai 2 road, with every unit in the project having a sea view from been offered for approximately THB 37,000 per sq m, as the project is its elevated position with an average selling price of around THB 56,000 located on Sukhumvit road and is more than one kilometre from the per sq m.beach. The average selling price in other locations increased from H2 BEACH fRoNTAgE ANd HEIgHT of CoNdomINIumS AffECT oN pRICE H1 2011 AvERAgE SEllINg pRICE (THB / SQ m.) AvERAgE SEllINg pRICE loCATIoN HIgH RISE low RISE (THB / SQ m.) BEACHfRoNT oTHER AREA (> 8 storey) (< 8 storey) Wongamat 70,000 96,000 50,000 67,000 85,000 Pattaya 68,200 72,500 66,150 Pratumnak 65,000 71,500 65,000 Jomtien 55,150 122,000 48,500 66,750 43,500 na Jomtien 60,400 115,500 36,800 125,000 44,500Source : Colliers international thailand researchBeach frontage is the key driver for luxury condominiums. Prices can the unit is especially important for buyers of a resort property. In relation rise by over 100% when located by the beach, especially in Jomtien to Bangkok most Pattaya city developments use greater quantities of where many projects are located some distance from the shoreline. glass in their construction in order to make the most of theThere is also a premium for high rise condominiums as the view from surroundings. COLLIERS INTERNATIONAL | P. 9
  10. 10. PattaYa citY condominium rePort market | H1 2011 (HAlf YeAr)foRECASTThe entrance of lPN Development in the Pattaya city market is highly significant. While a number of listed developers have been involved in the city, lPN is the largest company in terms of turnover and market capitalisation to do so. What is more the company was instrumental in the trend of bringing down average unit sizes in Bangkok, targeting a first time buyer’s market that was beyond reach before and has since been emulated in different forms by many other developers. In the case of Pattaya city the market is predominantly Bangkokians looking for a cheap second home for weekends, although demand also comes from the local market and foreigners. Other Bangkok based developers are likely to follow.Many factors are falling into place that will continue to propel Pattaya forward as an international city rather than simply a resort. Growing demand from foreigners in vibrant visitor markets such as russia and India - More Thais now purchasing property as a second home - The increasing industrialization of Chonburi province and Pattaya as a potential commercial hub - future retail and entertainment development that will enhance the attractiveness of the city.In previous reports Colliers International was bullish about the future prospects of the city over the course of the next ten years. There is nothing to alter this viewpoint and in fact events in the past six months go some way to strengthening that positive outlook.COLLIERS INTERNATIONAL | P. 10
  11. 11. PattaYa citY condominium rePort market | H1 2011 (HAlf YeAr)AppENdIX COLLIERS INTERNATIONAL | P. 11
  12. 12. PattaYa citY condominium rePort market | H1 2011 (HAlf YeAr)zoNINgCOLLIERS INTERNATIONAL | P. 12
  13. 13. PattaYa citY condominium rePort market | H1 2011 (HAlf YeAr)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. jomTIENThis is the area to the north of Pattaya Nua. It is considered a peaceful, Jomtien beach is about 1 km south of Pratumnak Hill. The locale is home more up-market location and is a relatively new area for condominium to many high-rise condominiums, beach front hotels, shops and development. restaurants. The area at the beginning of Jomtien is considered busy, while the area located at the end of this beach is considered peaceful 2. pATTAyA and tranquil with less traffic passing through.This area is considered as the city centre. The section of beach from Central road south to the harbour runs adjacent the core of Pattaya’s 5. NA jomTIENabundant nightlife area. Many sections of the beach are covered by Na Jomtien beach is south of Jomtien and does not have a beachfront rented deckchairs run by local beverage vendors during daylight hours. road and is less developed as a result .The main road connection is Pattaya Nua and Klang are the areas favoured by Asian visitors, especially Sukhumvit road, which is located between 500–1,000 meters from the Chinese and Korean, while the area of South Pattaya is popular among beach, this area extends to Bang Saray beach in Sattahip district.middle eastern, South asian and russian visitors. Note: The report covers residential areas located on or west of Sukhumvit3. pRATumNAK 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. COLLIERS INTERNATIONAL | P. 13
  14. 14. PattaYa citY condominium rePort market | H1 2011 (HAlf YeAr) CollIERS INTERNATIoNAl THAIlANd mANAgEmENT TEAm 512 offices in 61 countries on 6 continents PATTAYA OffICe • A leader in real estate consultancy worldwide mark Bowling | Senior Sales manager • 2nd most recognized commercial real estate brand globally Supannee Starojitski | Senior Business Development Manager / Office Manager • 2nd largest property manager • 979 million square feet under management reTAIl SerVICeS • Over 12,500 professionals asharawan Wachananont | Senior manager OffICe & INDUSTrIAl SerVICeS Narumon rodsiravoraphat | Senior Manager ADVISOrY SerVICeS | HOSPITAlITY Jean marc Garret | director PrOJeCT SAleS & MArKeTING Monchai Orawongpaisan | Senior Manager collierS international tHailand: Bangkok Office reSIDeNTIAl SAleS & leASING 17/f Ploenchit Center, Sunate lawskul | Senior Manager 2 Sukhumvit road, Klongtoey, Bangkok 10110 thailand ADVISOrY SerVICeS TEl +662 656 7000 Napatr Tienchutima | Associate Director fAX +662 656 7111 EmAIl reAl eSTATe MANAGeMeNT SerVICeS Pattaya Office Bandid Chayintu | Associate Director 519/4-5, Pattaya Second road (Opposite Central festival Pattaya Beach), Nongprue, Banglamung, Chonburi 20150 INVeSTMeNT SerVICeS TEl +6638 427 771 nukarn Suwatikul | associate director fAX +6638 427 772 Wasan rattanakijjanukul | Senior Manager EmAIl reSeArCH Antony Picon | Associate Director Surachet Kongcheep | Senior Manager VAlUATION & ADVISOrY SerVICeS nicholas Brown | associate director Phachsanun Phormthananunta | associate director Santipong Kreemaha | Senior Manager RESEARCHER: RESEARCHER: Wanida Suksuwan | manager thailand thailand Antony Picon Surachet Kongcheep associate director | research Senior manager | research EmAIl EmAIl This report and other research materials may be found on our website at 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