Posts Tagged ‘condominium’

Nova plans new condo, hotel projects in Pattaya, Bangkok worth B6.5bn

Monday, August 30th, 2010

The Pattaya-based developer Nova Group plans to introduce nine projects worth a combined 6.5 billion baht in Pattaya and Bangkok over the next two years, says president Rony Fineman.

Four of them will be condominiums worth more than five billion baht. The rest will be three- and four-star hotels in the two cities.

The 38-storey Legend will comprise 350 units located on Cosy beach. Two 27-storey buildings (equalling two projects) to be located on Jomtien beach will be under the Royal Beach brand and consist of 320 units each.

The Palm, at 3.5 billion baht the biggest of the four projects in terms of value, will have 42 storeys accommodating 500 units on Wong Amat beach.

Unit sizes will range from 36 square metres to more than 100 sq m priced from 40,000 to 50,000 baht per sq m for low-rise projects and 55,000 to 95,000 baht for high-rise buildings.

The projects are expected to be launched next year although some may be introduced in 2012, depending on market conditions, said Mr Fineman.

For the hotel projects, three are now under construction and will be opened in November 2011 – the Centra Sukhumvit with 78 rooms, the Centra Pattaya with 200 rooms and the Centra Nova Hotel and Spa with 79 rooms.

The other two – Centra Suites and the Holiday Inn Express – located in Pattaya with 129 rooms each, will open in 2012. Construction on both will start next January.

Nova will use its cashflow to develop three hotels, while the other two will utilise loans from Siam Commercial Bank and UOB Bank.

Mr Fineman said the hotel industry was saturated in both Pattaya and Bangkok, so the five developments will be the company’s final hotel expansion in Pattaya. The Bangkok project stems from the group’s desire to have a presence in the capital.

“We plan in 2012 and 2013 to build hotels in Phuket and Samui. We’re considering Hua Hin,” he said.

The company expects environmental-impact assessment approval for the remaining projects by next June.

Meanwhile, Mr Fineman remains bullish on Pattaya’s condominium market despite a slowdown in purchasing power since the 2008 global recession.

“Foreign buyers in Pattaya now have double problems. The first is that the baht is very strong and the second is they have their own recession in Europe and America which is obviously affecting them,” he said.

“Our projects are still selling but not like before. But we expect in the high season to sell a lot for ownership.”

As well, Pattaya has suffered the most from Bangkok’s political problems due to its proximity to the capital, unlike Phuket or Koh Samui where people can avoid the troubled area via direct flights.

However, demand in Pattaya from Thai buyers has started picking up with new developments such as the Central Festival shopping centre helping to lure them back. In the past few years, Thai buyers had been turning to other locations such as Hua Hin instead.

The company has also seen low-season occupancy in its hotels drop to about 50-60% from 60-70% in the same period last year.

Mr Fineman said Pattaya was seeing many more Indian and Chinese tourists, and he expects an increase in the number from the Far East this year, which should help offset the decline in Western tourists.

Some recession-proof projects offer value for money as well as innovation, he said. For example, the company tries to offer 50% green areas in its projects. The Nova Gold Hotel also provides a computer in each guest room.

Mr Fineman said Pattaya now was seeing more real demand from Thai buyers, with speculation down a bit although rental returns remain attractive at 6-8% per year.

Starting with the 1986 opening of the Nova Lodge Hotel, Mr Fineman has been in Pattaya real estate for 24 years.

The Nova Group currently owns three hotels managed by Amari and a serviced apartment building in Pattaya. Existing condos include the Nova Mirage, Nova Atrium and Nova Avenue Residence. The more recent Nova Ocean View and The Cliff are both 50% sold.

The company’s entertainment businesses include pubs and restaurants in Bangkok and Pattaya.

Land prices in Pattaya have doubled in the past two years. Plots in prime locations such as main or beach roads cost about 200,000 baht per square wah.

The company expects Pattaya will grow more quickly in the future, especially once investors in established markets such as India and China start to look outside their countries.

“We see Pattaya as the next Miami of the East. Proximity to Bangkok, the variety of accommodation and shopping and entertainment – it’s next to none,” he said.

Foreign demand is projected to return once the euro strengthens again and the world economy improves, expected to be around the end of next year.

Mr Fineman added that the Nova Group also planned to list on the SET within the next five years.

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Housing fair eyes B4bn sales

Saturday, August 14th, 2010

Despite the end of property tax incentives and a possible rise in interest rates, three property associations expect 4 billion baht in sales at the upcoming House & Condo fair to be held in October.

Kaveepan Eiamsakulrat, director of the Housing Business Association, said rising interest rates would have a minimal impact on homebuyers’ decision-making as any rate increase would be small.

“Demand is strong and the housing market in the second half should perform well thanks to a positive outlook for the economy,” he said. “A lot of developers delayed launching projects until the second half because they were more confident in the economic prospects.”

With a budget of 20 million baht, the 23rd House & Condo fair will be held from Sept 30 to Oct 3 at the Queen Sirikit National Convention Center with 600 housing projects from 150-200 developers participating, up from 500 projects and 120 developers in February.

“There are more developers as they are more confident. Even more projects may join as many developers haven’t launched new projects as announced,” said Mr Kaveepan.

About half of the projects are condominiums, up from 30-40% as the segment becomes more popular. There will be 12 financial institutions that usually offer special interest rates as well as non-performing assets.

The HBA, the Thai Condominium Association and the Thai Real Estate Association expect sales growth of more than 30% from the 3 billion baht it recorded at the previous fair.

Every fair booking qualifies for a scratch ticket with a chance at a free condominium unit worth 1.7 million baht. Other developers will offer discounts, free furniture and a zero interest rate for a few months.

B33bn in projects in Supalai pipeline

Wednesday, August 11th, 2010

Supalai Plc plans to launch at least 28 property projects worth 33 billion baht in the next 18 months, says executive director Tritecha Tangmatitham.

The company has 26 plots of land and is in talks with owners of two more plots for future development. Half of the total would accommodate 13 new developments, mainly low-rise units, worth around 13 billion baht over the rest of this year. Another 15 projects worth a combined 20 billion baht would be launched next year.

Supalai has already used up its annual budget of 3.5 billion to acquire land this year. It plans to invest another 1 billion in more plots.

“We are being more aggressive in acquiring new plots of land this year because sales were better than our expectations and we have a good chance to compete in buying land at a time when other small and medium-sized developers are slowing their investment,” Mr Tritecha said.

In the first seven months, Supalai introduced only two projects worth a combined 4 billion baht due to the political crisis. During the same period, it recorded 8.1 billion baht in presales, up 20% from the same period last year. Of the total sales, 55% came from condominiums and the rest from single houses and townhouses.

With more new projects planned for the rest of the year, it expects presales to exceed its 15-billion-baht target.

During the first half, it transferred residential units worth 5 billion baht to buyers and expects full-year transfers to exceed the target of 11 billion baht because its current sales backlog of 18.7 billion is higher than its target. Of the backlog, at least 5.4 billion baht would be realised by the end of the year.

Mr Tritecha said the expiry of tax incentives in June pushed down Supalai’s net profit margin in the second quarter to 22% from 26% while its gross margin in the first half was 43%.

Managing director Atip Bhijanonda said the 9% rise in the cost of development in the second half would reflect the expiry of of tax incentives, from which developers also benefited, to a total of 4%, with the remaining 5% from higher material costs. Contractors have increased their charges by 3-5%, he said, but any rise in housing prices would depend on competition and location.

Mr Tritecha said home demand would also be affected by higher interest rates.

The company plans to launch the BoI-supported City Home Srinakarin condominium with 1,320 units sized at 30-32 square metres and priced from 30,500 baht per sq m next weekend.

Supalai shares (SPALI) closed yesterday on the SET at 12.50 baht, down 30 satang, in trade worth 122.96 million


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