WHEN the wind blows in Jakarta these days, you could well be blinded by a blast of sand and grit swept up from construction sites that seem to have sprung up everywhere.
Condominiums, offices, malls, mixed housing-retail-office complexes and even whole townships are in various stages of construction in the city - from the heart of downtown to suburban fringes.
Jakarta, as the eye can plainly see, is undergoing a building boom. Powered by a steadily recovering economy and declining interest rates, the property market has been putting up a robust showing in the past year.
On the commercial front, landlords have been happily raising office rentals, riding on a swelling wave of demand as companies grow more confident, expanding into larger and better facilities.
In the first six months of this year, for instance, average gross rental rates outside the central business district (CBD) rose 14.2 per cent from the end of last year, according to the latest market review - for March to June - published last month by local property consultancy Procon Indah.
The same review indicated that the average occupancy rate of CBD office space scored a new post-Asian financial crisis high of 86.8 per cent, up from the previous quarter’s 84.5 per cent.
Outside the central business district, the average occupancy rate stood at 89.8 per cent for the first half of this year, up from 87.4 per cent at the end of last year.
Performance in the housing segment remained strong as well during Q2, even as more projects with competitive pricing flooded the market. The condominium market continued its growth trend of the first quarter, with cumulative sales rate reaching 94.2 per cent, said Procon Indah.
Meanwhile, land prices went up 6.7 per cent on average in Greater Jakarta residential estates. And with mortgage interest rates falling to an unprecedented 8.8 per cent, down from 12-14 per cent a few years ago, there is still potential for more sales growth, say analysts.
A similar story has been unfolding even more dramatically on the stock market, where property counters have been outpacing the general market bull.
In the last six months between the end of March and Friday last week, the Jakarta Composite Index rose 36.6 per cent, breaking through 2,500 points for the first time to close at 2,500.6 points.
But the property index did even better. Comprising some 30-plus counters, it scaled 72.1 per cent in the corresponding period to close at 246.5 points.
An important point to note here is that property shares remain the only channel for foreigners wanting some play in the sector, as they are barred from buying property directly.
But has the property market passed its peak? How much more upside can be expected for investors coming late into the game?
Analysts acknowledge that it is unlikely for the sector to achieve similar breathtaking gains in the near future. Already, some are re-evaluating the net asset value (NAV) of several counters.
‘Popular listed developers like Summarecon Agung have already reached fair value,’ noted one analyst with a foreign brokerage. Several have even run ahead of their value, he added.
Still, there could be a few more gems waiting to be uncovered. Selected stocks like Ciputra Surya and Lippo Cikarang remain undervalued and have decent upside potential, say analysts. And should the government decide to open up property sales to foreigners - an idea that has been bandied about and discussed recently - another big boost can be expected. Such a major change, though, is not likely to happen this year.
‘But on the whole, much of the sales and planning have been done. We’re now moving into the construction phase,’ observed one analyst.
In that regard, it might be wiser and more profitable to look to the construction and raw materials sector, where the sun is just about to rise.
Analysts forecast a rise in construction activity in the next one to two years, based not only on the buzz in the private property sector, but even more so on an expected swell in state spending on sorely needed public infrastructure.
In the draft state budget for next year announced recently, the government raised the allocation for public works by 41 per cent, and that for transport by another 64 per cent.
The money will be spent on building new road networks, improving and constructing airports and railway lines.
As one analyst noted: ‘Elections are less than two years away. In that time, the government will want to demonstrate that it has done something to improve public infrastructure.’
Counters to watch include state-owned construction giant Adhi Karya, which is likely to land major government contracts, and Total Bangun Persada, a veteran brand-name in the industry. Investors are also eyeing the impending IPO of state-owned builder Wijaya Karya, due next month. Related sectors like cement production could be worth some attention too.
In short, there is still good gain to be had in the property and construction sector. It’s just a matter of knowing where to look. Take a cue from the sand and grit swirling in the city, for a start.
Source : Business Times - 9 Oct 2007
Showing posts with label Asian Property. Show all posts
Showing posts with label Asian Property. Show all posts
Wednesday, October 10, 2007
Tuesday, October 9, 2007
WHEN the wind blows in Jakarta these days, you could well be blinded by a blast of sand and grit swept up from construction sites
WHEN the wind blows in Jakarta these days, you could well be blinded by a blast of sand and grit swept up from construction sites that seem to have sprung up everywhere.
Condominiums, offices, malls, mixed housing-retail-office complexes and even whole townships are in various stages of construction in the city - from the heart of downtown to suburban fringes.
Jakarta, as the eye can plainly see, is undergoing a building boom. Powered by a steadily recovering economy and declining interest rates, the property market has been putting up a robust showing in the past year.
On the commercial front, landlords have been happily raising office rentals, riding on a swelling wave of demand as companies grow more confident, expanding into larger and better facilities.
In the first six months of this year, for instance, average gross rental rates outside the central business district (CBD) rose 14.2 per cent from the end of last year, according to the latest market review - for March to June - published last month by local property consultancy Procon Indah.
The same review indicated that the average occupancy rate of CBD office space scored a new post-Asian financial crisis high of 86.8 per cent, up from the previous quarter’s 84.5 per cent.
Outside the central business district, the average occupancy rate stood at 89.8 per cent for the first half of this year, up from 87.4 per cent at the end of last year.
Performance in the housing segment remained strong as well during Q2, even as more projects with competitive pricing flooded the market. The condominium market continued its growth trend of the first quarter, with cumulative sales rate reaching 94.2 per cent, said Procon Indah.
Meanwhile, land prices went up 6.7 per cent on average in Greater Jakarta residential estates. And with mortgage interest rates falling to an unprecedented 8.8 per cent, down from 12-14 per cent a few years ago, there is still potential for more sales growth, say analysts.
A similar story has been unfolding even more dramatically on the stock market, where property counters have been outpacing the general market bull.
In the last six months between the end of March and Friday last week, the Jakarta Composite Index rose 36.6 per cent, breaking through 2,500 points for the first time to close at 2,500.6 points.
But the property index did even better. Comprising some 30-plus counters, it scaled 72.1 per cent in the corresponding period to close at 246.5 points.
An important point to note here is that property shares remain the only channel for foreigners wanting some play in the sector, as they are barred from buying property directly.
But has the property market passed its peak? How much more upside can be expected for investors coming late into the game?
Analysts acknowledge that it is unlikely for the sector to achieve similar breathtaking gains in the near future. Already, some are re-evaluating the net asset value (NAV) of several counters.
‘Popular listed developers like Summarecon Agung have already reached fair value,’ noted one analyst with a foreign brokerage. Several have even run ahead of their value, he added.
Still, there could be a few more gems waiting to be uncovered. Selected stocks like Ciputra Surya and Lippo Cikarang remain undervalued and have decent upside potential, say analysts. And should the government decide to open up property sales to foreigners - an idea that has been bandied about and discussed recently - another big boost can be expected. Such a major change, though, is not likely to happen this year.
‘But on the whole, much of the sales and planning have been done. We’re now moving into the construction phase,’ observed one analyst.
In that regard, it might be wiser and more profitable to look to the construction and raw materials sector, where the sun is just about to rise.
Analysts forecast a rise in construction activity in the next one to two years, based not only on the buzz in the private property sector, but even more so on an expected swell in state spending on sorely needed public infrastructure.
In the draft state budget for next year announced recently, the government raised the allocation for public works by 41 per cent, and that for transport by another 64 per cent.
The money will be spent on building new road networks, improving and constructing airports and railway lines.
As one analyst noted: ‘Elections are less than two years away. In that time, the government will want to demonstrate that it has done something to improve public infrastructure.’
Counters to watch include state-owned construction giant Adhi Karya, which is likely to land major government contracts, and Total Bangun Persada, a veteran brand-name in the industry. Investors are also eyeing the impending IPO of state-owned builder Wijaya Karya, due next month. Related sectors like cement production could be worth some attention too.
In short, there is still good gain to be had in the property and construction sector. It’s just a matter of knowing where to look. Take a cue from the sand and grit swirling in the city, for a start.
Source : Business Times - 9 Oct 2007
Condominiums, offices, malls, mixed housing-retail-office complexes and even whole townships are in various stages of construction in the city - from the heart of downtown to suburban fringes.
Jakarta, as the eye can plainly see, is undergoing a building boom. Powered by a steadily recovering economy and declining interest rates, the property market has been putting up a robust showing in the past year.
On the commercial front, landlords have been happily raising office rentals, riding on a swelling wave of demand as companies grow more confident, expanding into larger and better facilities.
In the first six months of this year, for instance, average gross rental rates outside the central business district (CBD) rose 14.2 per cent from the end of last year, according to the latest market review - for March to June - published last month by local property consultancy Procon Indah.
The same review indicated that the average occupancy rate of CBD office space scored a new post-Asian financial crisis high of 86.8 per cent, up from the previous quarter’s 84.5 per cent.
Outside the central business district, the average occupancy rate stood at 89.8 per cent for the first half of this year, up from 87.4 per cent at the end of last year.
Performance in the housing segment remained strong as well during Q2, even as more projects with competitive pricing flooded the market. The condominium market continued its growth trend of the first quarter, with cumulative sales rate reaching 94.2 per cent, said Procon Indah.
Meanwhile, land prices went up 6.7 per cent on average in Greater Jakarta residential estates. And with mortgage interest rates falling to an unprecedented 8.8 per cent, down from 12-14 per cent a few years ago, there is still potential for more sales growth, say analysts.
A similar story has been unfolding even more dramatically on the stock market, where property counters have been outpacing the general market bull.
In the last six months between the end of March and Friday last week, the Jakarta Composite Index rose 36.6 per cent, breaking through 2,500 points for the first time to close at 2,500.6 points.
But the property index did even better. Comprising some 30-plus counters, it scaled 72.1 per cent in the corresponding period to close at 246.5 points.
An important point to note here is that property shares remain the only channel for foreigners wanting some play in the sector, as they are barred from buying property directly.
But has the property market passed its peak? How much more upside can be expected for investors coming late into the game?
Analysts acknowledge that it is unlikely for the sector to achieve similar breathtaking gains in the near future. Already, some are re-evaluating the net asset value (NAV) of several counters.
‘Popular listed developers like Summarecon Agung have already reached fair value,’ noted one analyst with a foreign brokerage. Several have even run ahead of their value, he added.
Still, there could be a few more gems waiting to be uncovered. Selected stocks like Ciputra Surya and Lippo Cikarang remain undervalued and have decent upside potential, say analysts. And should the government decide to open up property sales to foreigners - an idea that has been bandied about and discussed recently - another big boost can be expected. Such a major change, though, is not likely to happen this year.
‘But on the whole, much of the sales and planning have been done. We’re now moving into the construction phase,’ observed one analyst.
In that regard, it might be wiser and more profitable to look to the construction and raw materials sector, where the sun is just about to rise.
Analysts forecast a rise in construction activity in the next one to two years, based not only on the buzz in the private property sector, but even more so on an expected swell in state spending on sorely needed public infrastructure.
In the draft state budget for next year announced recently, the government raised the allocation for public works by 41 per cent, and that for transport by another 64 per cent.
The money will be spent on building new road networks, improving and constructing airports and railway lines.
As one analyst noted: ‘Elections are less than two years away. In that time, the government will want to demonstrate that it has done something to improve public infrastructure.’
Counters to watch include state-owned construction giant Adhi Karya, which is likely to land major government contracts, and Total Bangun Persada, a veteran brand-name in the industry. Investors are also eyeing the impending IPO of state-owned builder Wijaya Karya, due next month. Related sectors like cement production could be worth some attention too.
In short, there is still good gain to be had in the property and construction sector. It’s just a matter of knowing where to look. Take a cue from the sand and grit swirling in the city, for a start.
Source : Business Times - 9 Oct 2007
Friday, September 28, 2007
Ciputra Property to tap up to US$150m in Jakarta IPO
Developer plans to use proceeds to acquire companies and subsidiaries
(HONG KONG/JAKARTA) Indonesian real estate developer PT Ciputra Property is planning to raise up to about US$150 million in a domestic initial public offering, according to a listing prospectus and a source familiar with the deal.
Ciputra Property, a mixed-use commercial property unit of PT Ciputra Development Tbk, plans to sell 40.19 per cent of its enlarged share capital ahead of a listing scheduled for Nov 12.
The company, which has holdings in shopping malls in Jakarta and Semarang, said it plans to use 521.9 billion rupiah (S$85.4 million) from the proceeds to acquire a number of companies and subsidiaries, and the remaining funds from the sale as working capital and for construction costs.
Registration and book- building for the deal are scheduled for Oct 9-19, with pricing due on Oct 22, and the public offering set for Nov 5-7.
The deal is being sponsored by Citigroup and Danareksa.
Indonesian companies have raised over US$3 billion so far this year in initial public offerings and follow-on equity sales according to Thomson Financial, marking a record for Jakarta’s stock market.
Initial public offerings, or IPOs, raised US$680 million.
The Jakarta stock market has risen 30 per cent so far this year on the back of strong foreign demand and an improving economy.
In May, the president director of the Jakarta Stock Exchange, Erry Firmansyah, told Reuters the bourse was aiming to double the number of new listings this year. During 2006, a total of four initial public offerings raised just US $278 million.
Some of the bigger listing candidates in Indonesia include state-owned toll road operator PT Jasa Marga, which hopes to raise roughly US$300 million this year, and coal miner PT Indo Tambangraya Megah, a unit of Thailand’s Banpu plc, which is looking to raise about US$100 million in an IPO.
Source: Reuters
(HONG KONG/JAKARTA) Indonesian real estate developer PT Ciputra Property is planning to raise up to about US$150 million in a domestic initial public offering, according to a listing prospectus and a source familiar with the deal.
Ciputra Property, a mixed-use commercial property unit of PT Ciputra Development Tbk, plans to sell 40.19 per cent of its enlarged share capital ahead of a listing scheduled for Nov 12.
The company, which has holdings in shopping malls in Jakarta and Semarang, said it plans to use 521.9 billion rupiah (S$85.4 million) from the proceeds to acquire a number of companies and subsidiaries, and the remaining funds from the sale as working capital and for construction costs.
Registration and book- building for the deal are scheduled for Oct 9-19, with pricing due on Oct 22, and the public offering set for Nov 5-7.
The deal is being sponsored by Citigroup and Danareksa.
Indonesian companies have raised over US$3 billion so far this year in initial public offerings and follow-on equity sales according to Thomson Financial, marking a record for Jakarta’s stock market.
Initial public offerings, or IPOs, raised US$680 million.
The Jakarta stock market has risen 30 per cent so far this year on the back of strong foreign demand and an improving economy.
In May, the president director of the Jakarta Stock Exchange, Erry Firmansyah, told Reuters the bourse was aiming to double the number of new listings this year. During 2006, a total of four initial public offerings raised just US $278 million.
Some of the bigger listing candidates in Indonesia include state-owned toll road operator PT Jasa Marga, which hopes to raise roughly US$300 million this year, and coal miner PT Indo Tambangraya Megah, a unit of Thailand’s Banpu plc, which is looking to raise about US$100 million in an IPO.
Source: Reuters
Friday, September 7, 2007
100 of the best in MIPIM Asia awards
100 of the best in MIPIM Asia awards
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One hundred of the most innovative and prestigious real estate projects in the Asia Pacific region are competing in the inaugural MIPIM Asia Awards. The Awards will be held prior to the November 28 opening ceremony for the second MIPIM Asia, the international Asia Pacific property market, to be held in Hong Kong, November 28-30, 2007.
Around 30% of the entries have been made in the ´Futura Projects´ category which recognises planning-stage projects for their architectural, technical or environmental qualities. In the running are projects from such well-known international companies as Edaw, Aedas Limited, Arquitectonica, Benoy, Omniyat Properties and Arup.
For Gilles Saint Georges Chaumet, Director of MIPIM Asia, "the success of these first MIPIM Asia Awards is driven by the remarkable dynamism in the region´s property sector. It also reflects the property industry´s interest in being highly visible at an event that brings together both regional players and leading international firms. The 2007 winners will truly be the best of the best."
Entries have flowed in from across the region with projects from 15 Asia Pacific countries. 29 entries concern projects located in China, followed by Singapore (13), Hong Kong (12), India (8), the United Arab Emirates (8), Japan (7), Australia (6), Thailand (4), South Korea (4), Vietnam (4) and one each for Macao, Indonesia, the Philippines, the Maldives and Sri Lanka.
The MIPIM Asia Awards jury will meet at the end of September to select three projects in each of the following seven categories: Business Centres, Shopping Centres, Mixed-use Buildings, Residential Developments, Hotels & Tourism Resorts, Green Buildings and Futura Projects.
The 21 nominated projects will be on view in a dedicated MIPIM Asia Awards zone throughout the event.
Chaired by Dr Robert Lie, CEO of ING Real Estate Investment Management Asia, Hong Kong, the jury of investors, developers and associations, comprises twelve of the leading property specialists operating in the Asia Pacific region: Michael Smith, Managing Director and Head of Asian Real Estate for Goldman Sachs Pte (Singapore), Thomas M. Pearson, Managing Director, Co-Head Global Real Estate Group - Asia, for Lehman Brothers Real Estate Ltd (Japan), Richard David, Managing Director, Treasury Holdings China Limited (China), Graeme Torre, Managing Director of AIG Real Estate (Hong Kong), Cheng-Soon Lau, Managing Director of INVESCO Real Estate - Asia (Hong Kong), Hiroo Mori, Senior Managing Director of Mori Building Co., Ltd (Japan), Nicholas Loup, Managing Director of Grosvenor Asia (Hong Kong), Reuben Chu, Chairman of the PGBC (Professional Green Building Council, Hong Kong), Peter Mitchell, CEO of the Asian Public Real Estate Association (Singapore), Dr Ronald Lu, President of the Hong Kong Institute of Architects and Hokyu Lee, Managing Director of the international property consultancy BHP Korea (Korea).
Advertisement
One hundred of the most innovative and prestigious real estate projects in the Asia Pacific region are competing in the inaugural MIPIM Asia Awards. The Awards will be held prior to the November 28 opening ceremony for the second MIPIM Asia, the international Asia Pacific property market, to be held in Hong Kong, November 28-30, 2007.
Around 30% of the entries have been made in the ´Futura Projects´ category which recognises planning-stage projects for their architectural, technical or environmental qualities. In the running are projects from such well-known international companies as Edaw, Aedas Limited, Arquitectonica, Benoy, Omniyat Properties and Arup.
For Gilles Saint Georges Chaumet, Director of MIPIM Asia, "the success of these first MIPIM Asia Awards is driven by the remarkable dynamism in the region´s property sector. It also reflects the property industry´s interest in being highly visible at an event that brings together both regional players and leading international firms. The 2007 winners will truly be the best of the best."
Entries have flowed in from across the region with projects from 15 Asia Pacific countries. 29 entries concern projects located in China, followed by Singapore (13), Hong Kong (12), India (8), the United Arab Emirates (8), Japan (7), Australia (6), Thailand (4), South Korea (4), Vietnam (4) and one each for Macao, Indonesia, the Philippines, the Maldives and Sri Lanka.
The MIPIM Asia Awards jury will meet at the end of September to select three projects in each of the following seven categories: Business Centres, Shopping Centres, Mixed-use Buildings, Residential Developments, Hotels & Tourism Resorts, Green Buildings and Futura Projects.
The 21 nominated projects will be on view in a dedicated MIPIM Asia Awards zone throughout the event.
Chaired by Dr Robert Lie, CEO of ING Real Estate Investment Management Asia, Hong Kong, the jury of investors, developers and associations, comprises twelve of the leading property specialists operating in the Asia Pacific region: Michael Smith, Managing Director and Head of Asian Real Estate for Goldman Sachs Pte (Singapore), Thomas M. Pearson, Managing Director, Co-Head Global Real Estate Group - Asia, for Lehman Brothers Real Estate Ltd (Japan), Richard David, Managing Director, Treasury Holdings China Limited (China), Graeme Torre, Managing Director of AIG Real Estate (Hong Kong), Cheng-Soon Lau, Managing Director of INVESCO Real Estate - Asia (Hong Kong), Hiroo Mori, Senior Managing Director of Mori Building Co., Ltd (Japan), Nicholas Loup, Managing Director of Grosvenor Asia (Hong Kong), Reuben Chu, Chairman of the PGBC (Professional Green Building Council, Hong Kong), Peter Mitchell, CEO of the Asian Public Real Estate Association (Singapore), Dr Ronald Lu, President of the Hong Kong Institute of Architects and Hokyu Lee, Managing Director of the international property consultancy BHP Korea (Korea).
Strong sales at ’The Chava’
Strong sales at ’The Chava’
The Chava, the luxury apartment on Surin Beach, Phuket has received a lot of positive feedback from holiday home buyers and investors, with 65% of the units sold despite the recent property market slow down.
The luxury apartment market in Phuket is continuing to be strong compared to other segments and has become popular among holiday home buyers and investors who would like to buy a holiday home to suit their lifestyle and also earn from a rental return.
Mr. Larry Cunningham, CEO and developer of The Chava said: “We launched The Chava in May last year and have achieved sales of over 65% in fifteen months. Even though the Phuket property market has experienced a recent slow down, we continue to receive interest and positive feedback from potential buyers. We are confident that Phuket is still the most popular holiday home destination in Asia and buyers continue to show interest in buying quality apartments in prime locations”.
”The sales of our project was not only driven by the trend of increased interest in luxury apartments. Buyers and investors consider key factors such as location and quality before making a decision. At The Chava, apart from the great location on the popular Surin Beach, we invested a lot of time and money on architecture and design, and ensuring that all details of the residence are of the high quality our clients expect” Mr. Cunningham added.
The Chava project is worth 800 million baht and covers three rai overlooking Surin Beach. Surin Beach is an area well known with wealthy holiday makers from all around the world. In the nearby area of The Chava are high-end resorts such as Amanpuri, The Chedi, Twin Palms and Laguna Phuket. From the site, it takes only 10 minutes to golf courses, 15 minutes to marinas, and 15-20 minutes to entertainment, shopping centres and Phuket town.
The Chava recently launched the display apartment showcasing the quality and finishing of its unit and allows clients optional finishing or decorations for their own apartment.
The Chava consists of 45 contemporary, luxury apartments set within 5,000 sqm. of lush tropical gardens, which have been design by internationally acclaimed Paradise Designs. The Chava offers 16 unit types ranging from 151 - 332 sq metres with two to four ensuite bedrooms. Prices start from 15 million baht per unit. Ground floor units enjoy private gardens with plunge pools and the penthouse units enjoy superb sea views across Surin Beach.
In addition to a high quality build and superb architecture and design, The Chava also offers 24-hour service with concierge, valet parking and security surveillance.
All apartments include modern comforts of home and the latest in WiFi technology. Apartments are designed to create an interior courtyard sanctuary set around a magnificent 35 metre swimming pool with in pool daybeds, giving a resort-style apartment feel.
The Chava combines a distinctive lifestyle with a superb investment opportunity that maximizes both personal and financial returns. The Chava has appointed a leading property management group to manage and maintain the apartments and facilities to international five-star standards, making the investment safe and generating a return.
The project will be completed in mid 2008. The display apartment is available for inspection every day at The Chava, Surin Beach.
The Chava, the luxury apartment on Surin Beach, Phuket has received a lot of positive feedback from holiday home buyers and investors, with 65% of the units sold despite the recent property market slow down.
The luxury apartment market in Phuket is continuing to be strong compared to other segments and has become popular among holiday home buyers and investors who would like to buy a holiday home to suit their lifestyle and also earn from a rental return.
Mr. Larry Cunningham, CEO and developer of The Chava said: “We launched The Chava in May last year and have achieved sales of over 65% in fifteen months. Even though the Phuket property market has experienced a recent slow down, we continue to receive interest and positive feedback from potential buyers. We are confident that Phuket is still the most popular holiday home destination in Asia and buyers continue to show interest in buying quality apartments in prime locations”.
”The sales of our project was not only driven by the trend of increased interest in luxury apartments. Buyers and investors consider key factors such as location and quality before making a decision. At The Chava, apart from the great location on the popular Surin Beach, we invested a lot of time and money on architecture and design, and ensuring that all details of the residence are of the high quality our clients expect” Mr. Cunningham added.
The Chava project is worth 800 million baht and covers three rai overlooking Surin Beach. Surin Beach is an area well known with wealthy holiday makers from all around the world. In the nearby area of The Chava are high-end resorts such as Amanpuri, The Chedi, Twin Palms and Laguna Phuket. From the site, it takes only 10 minutes to golf courses, 15 minutes to marinas, and 15-20 minutes to entertainment, shopping centres and Phuket town.
The Chava recently launched the display apartment showcasing the quality and finishing of its unit and allows clients optional finishing or decorations for their own apartment.
The Chava consists of 45 contemporary, luxury apartments set within 5,000 sqm. of lush tropical gardens, which have been design by internationally acclaimed Paradise Designs. The Chava offers 16 unit types ranging from 151 - 332 sq metres with two to four ensuite bedrooms. Prices start from 15 million baht per unit. Ground floor units enjoy private gardens with plunge pools and the penthouse units enjoy superb sea views across Surin Beach.
In addition to a high quality build and superb architecture and design, The Chava also offers 24-hour service with concierge, valet parking and security surveillance.
All apartments include modern comforts of home and the latest in WiFi technology. Apartments are designed to create an interior courtyard sanctuary set around a magnificent 35 metre swimming pool with in pool daybeds, giving a resort-style apartment feel.
The Chava combines a distinctive lifestyle with a superb investment opportunity that maximizes both personal and financial returns. The Chava has appointed a leading property management group to manage and maintain the apartments and facilities to international five-star standards, making the investment safe and generating a return.
The project will be completed in mid 2008. The display apartment is available for inspection every day at The Chava, Surin Beach.
Jakarta: Local drive
Jakarta: Local drive
By Terry Blackburn
For many years, the real estate money in Jakarta has gone one way – out of the city into places such as KL, Sydney, Perth and especially Singapore, the overseas investment destination of choice for wealthy Indonesians. Now, though, some of the capital is beginning to flow in the opposite direction. Luxury real estate developers are targeting both local and adventurous foreign buyers, looking either for a home in the city or a long-term investment in one of the region’s emerging markets.
"In terms of price, Jakarta is much lower than Singapore and still somewhat lower than Kuala Lumpur or Bangkok. But in terms of quality, I think it does not differ a lot," says Anton Sitorus, Jones Lang LaSalle’s Head of Research for Indonesia.
The new luxury boom in the capital is being spearheaded by the likes of branded developments by St Regis and Kempinski, the eye-catching Regatta by Burj Al Arab designer Atkins, and the mixed-use Essence on Darmawangsa. Although foreign investors make up a small percentage of the market overall, they’re extremely active in the high end of the market.
"Approximately 40% of our buyers are from Korea, America, England, Australia, Singapore, Malaysia, Hong Kong, Japan and China," admits Ivada L. Santoso, Marketing Director for the Essence on Darmawangsa.
This is a high percentage considering the restrictive investment laws, which make foreign ownership difficult. As in Bali and elsewhere in the country, various titles exist that allow foreigners to have long leases and effective control of land and property, as well as nominee schemes allowing companies to own properties.
In practice, where apartments are concerned in urban Jakarta, this generally means a long lease with an option to sell. "We accommodate the regulations by using an Option Agreement, thus the buyer has the right to sell the property, so there’s no difficulty in attracting foreigners," Ivada says.
However, many industry players believe the government could be doing more to attract foreign investors. "The private sector has frequently asked the government to provide more relaxed regulations concerning foreign ownership; to learn from Malaysia and Singapore," Sitorus says. "But so far, the government has only accommodated the regulation about land-ownership periods."
Downtown appeal
As with most other luxury products, the Essence on Darmawangsa is located in the south of the city, on the outskirts of the ‘Golden Triangle’ central business district. The project features three apartment towers and a five-star hotel set in 5.3 hectares of land, 70% of which will be dedicated to landscaped gardens and a water park.
Since launching in 2005, the development has recorded impressive sales for its two principle residential towers. "In our first two days of launching the Eminence Tower, we sold 60%," Ivada says. "At the moment, we have sold 95%. As for the South Tower, at the present time we have sold 50%."
Ironically, the accommodation boom in the CBD is helped along by Jakarta’s poor infrastructure, particularly its notoriously bad traffic and lack of a mass transit system, which ensures that the suburbs aren’t as an attractive an option as in other Asian cities.
"The Jakarta residential market will continue to be dominated by downtown and CBD apartments, partly driven by the global trend for ‘inner city living’," says Hary Jap, President of Indoproperty Real Estate. "The traffic jams and the high costs of landed property mean living in the suburbs is no longer suitable for most Jakarta people working in the CBD."
Sitorus concurs that the business district area is the most exciting area for new developments. "Projects in prime CBD areas that are offered between Rp300-700 million (US$33,000-$77,000) per unit, for one or two bedrooms, are what interests me most in the market right now," he says. "Due to the location, these projects have better prospects for rental or capital increment."
That said, the same infrastructure problems are also hampering the city in terms of foreign appeal, as Jap explains. "People soon learn that it’s all related to things not being well planned, even going back to the Dutch era, such as flooding and mass transportation. The government is now studying the traffic and looking at buses and water transportation, although these are yet to be proven as long-term solutions."
Upward curve
Despite these setbacks, the city’s real estate market as a whole has bounced back impressively since the 1997/8 crash. Surprisingly, the residential sector has already surpassed pre-1998 growth, while other sectors are developing more slowly.
During the last decade’s peak between 1995-1997, ‘new completions’ grew around 5,000 units per annum. Between 2004-2007, the figure is predicted to average out at about 10,000 units per annum. In other property sectors, the market has shown some positive growth yet is still below pre-1998 levels.
In fact, the residential market could be judged to be in better shape than ever, as it’s underpinned by local investment with a minimum of foreign speculation. "In the past, property demand was supported by high economic growth and strong foreign investment, but today property demand is primarily driven by local demand," Sitorus explains.
Like elsewhere in Southeast Asia, there’s much greater stability in residential property in the current growth cycle. Lessons have been learnt across the board, by the government, by investors and by financial institutions.
"After the crises, the financial sector is wiser in giving loans to developers, which was one of the main causes of the crises," Jap says. "It’s safe to say that the main difference after 1997 is that more projects are financed by the consumer. The projects offered are more consumer centred, compared to the ‘new town opening’ style before the crises. Location choice is more sensitive. The consumers are more sceptical towards big-scale projects, and developers’ good names and corporate branding are big issues now."
Brand building
Branding is being utilised in two ways, both through the power of big international names such as St Regis and Kempinksi, and through commissioning internationally renowned architects and designers to work on prestige projects. The latter trend is exemplified by Regatta, which launched in April 2006 and is set to fulfil its self-titled ‘icon’ status due to its distinctive curved design by WS Atkins, the firm behind Dubai’s Burj Al Arab hotel.
Like its famed elder sister, Regatta will follow a nautical theme and feature an aerodynamically shaped hotel as its centrepiece, set to be one of the most striking landscape features overlooking the Java Sea, while series of 10 apartment towers will sport the same curves. Indeed, the name Regatta was inspired by the vision that the towers will"“symbolise tall ships sailing around the ‘lighthouse’ represented by the hotel". All the apartment towers will be named after major port cities of the world, and each is orientated toward their corresponding city.
Badan Kerjasama Mutiara Buana (BKMB), the local developer of Regatta, is betting big on Jakarta’s continued growth with its coastside location outside the CBD, which is linked by toll road access.
Launched in April, the St Regis Hotel and Residences, Jakarta is set to be completed in 2011 and will have 284 residential units for sale. As with most luxury developments in the city, the project will be mixed use, including a hotel, but will have the added advantage of having one of Starwood’s most prestigious brands behind it.
“The strategic location of the project in the heart of Jakarta, combined with the bespoke service of the St Regis brand, will make this property an extremely attractive choice for discerning travellers,” Ross Klein, President of the Luxury Brand Group, said at the launch. “Offering premium hotel accommodation and luxurious residences, St Regis Hotel and Residences, Jakarta will be a welcome addition to the city’s booming financial district and will help meet the surge in demand from multinational corporations as well as Jakarta’s growing numbers of tourists.”
With all this new stock arriving on the market, speculative investors and non-owner occupiers should still be wary, as one sector of the market that has been sluggish over the last few years is rentals of luxury apartments.
“The luxury rental apartment market depends, to a certain extent, on the expatriate market, but since the growth of expats in Jakarta remains slow, demand is also limited, not to mention the competition from luxury houses,” Sitorus says. “On the other hand, new supply has grown quite significantly, boosted by condominium developments, thus triggering higher competition. Going forward, we expect the market to face higher vacancy rates and limited rental growth.”
Jap agrees, but also highlights the potential of strong capital gains. “I always doubt that the luxury rental market can beat or even be at the same level as the ordinary rental market. The reason is very simple: the target is the upper end of the pyramid, which is rare, and usually luxury means adding more price at the same utility level. This is why we usually get lower rentals [psf] for bigger units,” he says.
“In my opinion, it’s better to expect higher capital gains for this kind of market, since rarity is the keyword here. Compared to neighbouring countries, investing in Jakarta is still considered very cheap by regional currency standards and brings a good return. Most investments bring handsome capital gains during a short period of time.”
By Terry Blackburn
For many years, the real estate money in Jakarta has gone one way – out of the city into places such as KL, Sydney, Perth and especially Singapore, the overseas investment destination of choice for wealthy Indonesians. Now, though, some of the capital is beginning to flow in the opposite direction. Luxury real estate developers are targeting both local and adventurous foreign buyers, looking either for a home in the city or a long-term investment in one of the region’s emerging markets.
"In terms of price, Jakarta is much lower than Singapore and still somewhat lower than Kuala Lumpur or Bangkok. But in terms of quality, I think it does not differ a lot," says Anton Sitorus, Jones Lang LaSalle’s Head of Research for Indonesia.
The new luxury boom in the capital is being spearheaded by the likes of branded developments by St Regis and Kempinski, the eye-catching Regatta by Burj Al Arab designer Atkins, and the mixed-use Essence on Darmawangsa. Although foreign investors make up a small percentage of the market overall, they’re extremely active in the high end of the market.
"Approximately 40% of our buyers are from Korea, America, England, Australia, Singapore, Malaysia, Hong Kong, Japan and China," admits Ivada L. Santoso, Marketing Director for the Essence on Darmawangsa.
This is a high percentage considering the restrictive investment laws, which make foreign ownership difficult. As in Bali and elsewhere in the country, various titles exist that allow foreigners to have long leases and effective control of land and property, as well as nominee schemes allowing companies to own properties.
In practice, where apartments are concerned in urban Jakarta, this generally means a long lease with an option to sell. "We accommodate the regulations by using an Option Agreement, thus the buyer has the right to sell the property, so there’s no difficulty in attracting foreigners," Ivada says.
However, many industry players believe the government could be doing more to attract foreign investors. "The private sector has frequently asked the government to provide more relaxed regulations concerning foreign ownership; to learn from Malaysia and Singapore," Sitorus says. "But so far, the government has only accommodated the regulation about land-ownership periods."
Downtown appeal
As with most other luxury products, the Essence on Darmawangsa is located in the south of the city, on the outskirts of the ‘Golden Triangle’ central business district. The project features three apartment towers and a five-star hotel set in 5.3 hectares of land, 70% of which will be dedicated to landscaped gardens and a water park.
Since launching in 2005, the development has recorded impressive sales for its two principle residential towers. "In our first two days of launching the Eminence Tower, we sold 60%," Ivada says. "At the moment, we have sold 95%. As for the South Tower, at the present time we have sold 50%."
Ironically, the accommodation boom in the CBD is helped along by Jakarta’s poor infrastructure, particularly its notoriously bad traffic and lack of a mass transit system, which ensures that the suburbs aren’t as an attractive an option as in other Asian cities.
"The Jakarta residential market will continue to be dominated by downtown and CBD apartments, partly driven by the global trend for ‘inner city living’," says Hary Jap, President of Indoproperty Real Estate. "The traffic jams and the high costs of landed property mean living in the suburbs is no longer suitable for most Jakarta people working in the CBD."
Sitorus concurs that the business district area is the most exciting area for new developments. "Projects in prime CBD areas that are offered between Rp300-700 million (US$33,000-$77,000) per unit, for one or two bedrooms, are what interests me most in the market right now," he says. "Due to the location, these projects have better prospects for rental or capital increment."
That said, the same infrastructure problems are also hampering the city in terms of foreign appeal, as Jap explains. "People soon learn that it’s all related to things not being well planned, even going back to the Dutch era, such as flooding and mass transportation. The government is now studying the traffic and looking at buses and water transportation, although these are yet to be proven as long-term solutions."
Upward curve
Despite these setbacks, the city’s real estate market as a whole has bounced back impressively since the 1997/8 crash. Surprisingly, the residential sector has already surpassed pre-1998 growth, while other sectors are developing more slowly.
During the last decade’s peak between 1995-1997, ‘new completions’ grew around 5,000 units per annum. Between 2004-2007, the figure is predicted to average out at about 10,000 units per annum. In other property sectors, the market has shown some positive growth yet is still below pre-1998 levels.
In fact, the residential market could be judged to be in better shape than ever, as it’s underpinned by local investment with a minimum of foreign speculation. "In the past, property demand was supported by high economic growth and strong foreign investment, but today property demand is primarily driven by local demand," Sitorus explains.
Like elsewhere in Southeast Asia, there’s much greater stability in residential property in the current growth cycle. Lessons have been learnt across the board, by the government, by investors and by financial institutions.
"After the crises, the financial sector is wiser in giving loans to developers, which was one of the main causes of the crises," Jap says. "It’s safe to say that the main difference after 1997 is that more projects are financed by the consumer. The projects offered are more consumer centred, compared to the ‘new town opening’ style before the crises. Location choice is more sensitive. The consumers are more sceptical towards big-scale projects, and developers’ good names and corporate branding are big issues now."
Brand building
Branding is being utilised in two ways, both through the power of big international names such as St Regis and Kempinksi, and through commissioning internationally renowned architects and designers to work on prestige projects. The latter trend is exemplified by Regatta, which launched in April 2006 and is set to fulfil its self-titled ‘icon’ status due to its distinctive curved design by WS Atkins, the firm behind Dubai’s Burj Al Arab hotel.
Like its famed elder sister, Regatta will follow a nautical theme and feature an aerodynamically shaped hotel as its centrepiece, set to be one of the most striking landscape features overlooking the Java Sea, while series of 10 apartment towers will sport the same curves. Indeed, the name Regatta was inspired by the vision that the towers will"“symbolise tall ships sailing around the ‘lighthouse’ represented by the hotel". All the apartment towers will be named after major port cities of the world, and each is orientated toward their corresponding city.
Badan Kerjasama Mutiara Buana (BKMB), the local developer of Regatta, is betting big on Jakarta’s continued growth with its coastside location outside the CBD, which is linked by toll road access.
Launched in April, the St Regis Hotel and Residences, Jakarta is set to be completed in 2011 and will have 284 residential units for sale. As with most luxury developments in the city, the project will be mixed use, including a hotel, but will have the added advantage of having one of Starwood’s most prestigious brands behind it.
“The strategic location of the project in the heart of Jakarta, combined with the bespoke service of the St Regis brand, will make this property an extremely attractive choice for discerning travellers,” Ross Klein, President of the Luxury Brand Group, said at the launch. “Offering premium hotel accommodation and luxurious residences, St Regis Hotel and Residences, Jakarta will be a welcome addition to the city’s booming financial district and will help meet the surge in demand from multinational corporations as well as Jakarta’s growing numbers of tourists.”
With all this new stock arriving on the market, speculative investors and non-owner occupiers should still be wary, as one sector of the market that has been sluggish over the last few years is rentals of luxury apartments.
“The luxury rental apartment market depends, to a certain extent, on the expatriate market, but since the growth of expats in Jakarta remains slow, demand is also limited, not to mention the competition from luxury houses,” Sitorus says. “On the other hand, new supply has grown quite significantly, boosted by condominium developments, thus triggering higher competition. Going forward, we expect the market to face higher vacancy rates and limited rental growth.”
Jap agrees, but also highlights the potential of strong capital gains. “I always doubt that the luxury rental market can beat or even be at the same level as the ordinary rental market. The reason is very simple: the target is the upper end of the pyramid, which is rare, and usually luxury means adding more price at the same utility level. This is why we usually get lower rentals [psf] for bigger units,” he says.
“In my opinion, it’s better to expect higher capital gains for this kind of market, since rarity is the keyword here. Compared to neighbouring countries, investing in Jakarta is still considered very cheap by regional currency standards and brings a good return. Most investments bring handsome capital gains during a short period of time.”
Singapore hits 12-year high
Singapore hits 12-year high
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Singapore´s Consumer Price Index (CPI) hit a 12-year inflationary high of 2.6% in July as the increased Goods and Services Tax (GST) were felt alongside soaring housing costs and inflated food prices.
The CPI rose by 2.1% over June 2007 and 2.6% slump, compared with July last year, Singapore´s Department of Statistics said in a statement on Thursday. It also noted that housing costs reflected the most growth at 4.9% due to higher electricity tariffs, rental prices and maintenance charges but upward movement was seen in all areas.
The increase surpassed the expectations of Dow Jones economists who estimated a 1.8% rise in a Newswires poll. July´s figures represent the fastest CPI increase since January 1995. Food prices, including vegetables, fruit, fish and milk powder increased 1.4% while health care rose 2.2%
Higher fees at universities and commercial institutions led to a 2.1% increase in the education and stationary sector, at a time when Singapore´s government has been debating the construction of a new university to meet consumer demand. The GST increase from 5% to 7% on July 1st was likely a contributing factor, the Department acknowledged.
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Singapore´s Consumer Price Index (CPI) hit a 12-year inflationary high of 2.6% in July as the increased Goods and Services Tax (GST) were felt alongside soaring housing costs and inflated food prices.
The CPI rose by 2.1% over June 2007 and 2.6% slump, compared with July last year, Singapore´s Department of Statistics said in a statement on Thursday. It also noted that housing costs reflected the most growth at 4.9% due to higher electricity tariffs, rental prices and maintenance charges but upward movement was seen in all areas.
The increase surpassed the expectations of Dow Jones economists who estimated a 1.8% rise in a Newswires poll. July´s figures represent the fastest CPI increase since January 1995. Food prices, including vegetables, fruit, fish and milk powder increased 1.4% while health care rose 2.2%
Higher fees at universities and commercial institutions led to a 2.1% increase in the education and stationary sector, at a time when Singapore´s government has been debating the construction of a new university to meet consumer demand. The GST increase from 5% to 7% on July 1st was likely a contributing factor, the Department acknowledged.
Asian tourism joint venture
Asian tourism joint venture
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Tourism officials from Cambodia, Thailand and Vietnam have gathered at a meeting in Cambodia´s Sihanoukville to look into ways to boost the development of tourism in the three countries´ common sea area.
Cambodia´s Secretary of State for Tourism, Thong Khon, said after the meeting that participants had agreed upon measures to strengthen cooperation among the three countries. This new project has come to light after neighbouring Asian cities sense that boasting their tourism would lead to greater investment into property areas within their countries.
High on the agenda of the meeting were discussions on the training of human resources for sea tourism, linkage tours between tourism destinations in the three countries, as well as the exchange of experience and tour operation management in the tourism sector. The second meeting of its kind is scheduled to take place in Thailand in 2008.
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Tourism officials from Cambodia, Thailand and Vietnam have gathered at a meeting in Cambodia´s Sihanoukville to look into ways to boost the development of tourism in the three countries´ common sea area.
Cambodia´s Secretary of State for Tourism, Thong Khon, said after the meeting that participants had agreed upon measures to strengthen cooperation among the three countries. This new project has come to light after neighbouring Asian cities sense that boasting their tourism would lead to greater investment into property areas within their countries.
High on the agenda of the meeting were discussions on the training of human resources for sea tourism, linkage tours between tourism destinations in the three countries, as well as the exchange of experience and tour operation management in the tourism sector. The second meeting of its kind is scheduled to take place in Thailand in 2008.
Industrial property markets upbeat
Industrial property markets upbeat
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CB Richard Ellis Reports Asian Industrial Property Markets Remained Largely Upbeat In The First Half of 2007
The second quarter continued to record upbeat performance in most of Asia´s industrial property markets, buttressed by sustained growth in the manufacturing sector and robust demand in logistics facilities. Industrial land prices in China appreciated further following the establishment of a system of minimum industrial land prices and the implementation of mandatory use of market mechanisms in the primary sales of industrial land.
In Japan, vacancy at large-scale multi-tenant distribution centres in and around Tokyo edged up by 50 basis points over the quarter to 8.9 per cent, as continued demand from 3PL operators was offset by the completion of new facilities. With a strong development pipeline, competition among landlords to attract tenants intensified, resulting in downward pressure on rents. Despite weaker market conditions, logistics assets continued to attract interest from both overseas and domestic private funds, and market sentiment suggests that the perceived risk premium for the sector is diminishing on the back of its growing acceptance as an investment class.
Average rents for all industrial space in Singapore continued to increase in the second quarter of 2007, with high-tech space posting its highest quarterly increase in five years. Rents are expected to rise further due to supply constraints in the office market and increasing demand amid optimism about business conditions.
The combined effect of the newly opened Hong Kong-Shenzhen Western Corridor and booming trading activity in Hong Kong has ensured that demand for local industrial properties persisted and property values continued to rise in the second quarter. However, limited stock and multiple ownership of local industrial properties made large-scale acquisitions difficult and smaller industrial buildings made up most of the quarter´s en bloc transactions.
In Mainland China, the second quarter saw full implementation of the policies requiring industrial land to be sold through public bidding, auction and listing. Industrial property rents and prices in cities under survey generally continued to increase or remained stable.
In Beijing, the average industrial rent was RMB 52.1 per square meter, an increase of 2 per cent compared with the first quarter. The price of industrial land, at RMB 1,200 per square meter, registered 4.1 per cent growth compared with the previous quarter. The land use rights of 120 industrial sites in Shanghai were transferred under the new regime during the second quarter. Industrial land prices rose 2.2 per cent quarter on quarter to RMB 898.8 per square meter (RMB 83.5 per square feet), while the average facility rent increased 0.8 per cent to RMB 31.5 per square meter (RMB 2.9 per square feet) per month. Guangzhou´s industrial property market was relatively stable during the second quarter. Both the average rents and land prices for industrial property remained the same as the previous quarter, with rents averaging RMB 25.2 per square meter per month and prices averaging RMB 445.3 per square meter. Chengdu´s industrial sector continued to develop rapidly in the second quarter of 2007, with concentrated industrial development zones attracting increasing numbers of enterprises.
In Vietnam, the value of Ho Chi Minh City´s industrial output increased by 12.6 per cent quarter on quarter in the first half of 2007, but at a rate slightly lower than the 13 per cent growth rate during the same period last year. Lawsuits regarding leather and footwear exports to Europe and garment and textile exports to the United States have led to the loss of some major contracts, one cause of the drop in the growth rate. However major high-tech investments and industrial park development projects were announced during the quarter. Hanoi´s second quarter GDP growth of 11.2 per cent was the highest in the past five years. During the first half of 2007, an estimated US$120 million of investment capital entered industrial parks, 71 per cent of the amount in the same period of 2006, with the decline due to lack of available space. The total income of FDI enterprises in industrial parks increased sharply as WTO commitments enabled direct transactions with overseas partners with preferential tariffs and trading rules.
The prospect of a general election in Thailand at the end of the year or in early 2008 acted to slightly improve market confidence in the second quarter, while the government´s approval of tax incentives for automakers investing at least THB 5 billion in eco-car manufacturing spurred investment in the sector. However sales of industrial land in the second quarter remained subdued and the full impact of these positive developments is only likely to be felt from the second half of the year onwards.
Activity in the semiconductor, manufacturing and electronics sectors continued to dominate activity in the Philippines´ industrial property markets. Amid a shortage of traditional office space, the majority of ICT/ITeS companies have relocated to business and industrial parks to take advantage of the flexibility and incentives they offer. There has also been strong demand for industrial properties from shipbuilding, logistics and utilities companies, due to the present upbeat demand conditions.
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CB Richard Ellis Reports Asian Industrial Property Markets Remained Largely Upbeat In The First Half of 2007
The second quarter continued to record upbeat performance in most of Asia´s industrial property markets, buttressed by sustained growth in the manufacturing sector and robust demand in logistics facilities. Industrial land prices in China appreciated further following the establishment of a system of minimum industrial land prices and the implementation of mandatory use of market mechanisms in the primary sales of industrial land.
In Japan, vacancy at large-scale multi-tenant distribution centres in and around Tokyo edged up by 50 basis points over the quarter to 8.9 per cent, as continued demand from 3PL operators was offset by the completion of new facilities. With a strong development pipeline, competition among landlords to attract tenants intensified, resulting in downward pressure on rents. Despite weaker market conditions, logistics assets continued to attract interest from both overseas and domestic private funds, and market sentiment suggests that the perceived risk premium for the sector is diminishing on the back of its growing acceptance as an investment class.
Average rents for all industrial space in Singapore continued to increase in the second quarter of 2007, with high-tech space posting its highest quarterly increase in five years. Rents are expected to rise further due to supply constraints in the office market and increasing demand amid optimism about business conditions.
The combined effect of the newly opened Hong Kong-Shenzhen Western Corridor and booming trading activity in Hong Kong has ensured that demand for local industrial properties persisted and property values continued to rise in the second quarter. However, limited stock and multiple ownership of local industrial properties made large-scale acquisitions difficult and smaller industrial buildings made up most of the quarter´s en bloc transactions.
In Mainland China, the second quarter saw full implementation of the policies requiring industrial land to be sold through public bidding, auction and listing. Industrial property rents and prices in cities under survey generally continued to increase or remained stable.
In Beijing, the average industrial rent was RMB 52.1 per square meter, an increase of 2 per cent compared with the first quarter. The price of industrial land, at RMB 1,200 per square meter, registered 4.1 per cent growth compared with the previous quarter. The land use rights of 120 industrial sites in Shanghai were transferred under the new regime during the second quarter. Industrial land prices rose 2.2 per cent quarter on quarter to RMB 898.8 per square meter (RMB 83.5 per square feet), while the average facility rent increased 0.8 per cent to RMB 31.5 per square meter (RMB 2.9 per square feet) per month. Guangzhou´s industrial property market was relatively stable during the second quarter. Both the average rents and land prices for industrial property remained the same as the previous quarter, with rents averaging RMB 25.2 per square meter per month and prices averaging RMB 445.3 per square meter. Chengdu´s industrial sector continued to develop rapidly in the second quarter of 2007, with concentrated industrial development zones attracting increasing numbers of enterprises.
In Vietnam, the value of Ho Chi Minh City´s industrial output increased by 12.6 per cent quarter on quarter in the first half of 2007, but at a rate slightly lower than the 13 per cent growth rate during the same period last year. Lawsuits regarding leather and footwear exports to Europe and garment and textile exports to the United States have led to the loss of some major contracts, one cause of the drop in the growth rate. However major high-tech investments and industrial park development projects were announced during the quarter. Hanoi´s second quarter GDP growth of 11.2 per cent was the highest in the past five years. During the first half of 2007, an estimated US$120 million of investment capital entered industrial parks, 71 per cent of the amount in the same period of 2006, with the decline due to lack of available space. The total income of FDI enterprises in industrial parks increased sharply as WTO commitments enabled direct transactions with overseas partners with preferential tariffs and trading rules.
The prospect of a general election in Thailand at the end of the year or in early 2008 acted to slightly improve market confidence in the second quarter, while the government´s approval of tax incentives for automakers investing at least THB 5 billion in eco-car manufacturing spurred investment in the sector. However sales of industrial land in the second quarter remained subdued and the full impact of these positive developments is only likely to be felt from the second half of the year onwards.
Activity in the semiconductor, manufacturing and electronics sectors continued to dominate activity in the Philippines´ industrial property markets. Amid a shortage of traditional office space, the majority of ICT/ITeS companies have relocated to business and industrial parks to take advantage of the flexibility and incentives they offer. There has also been strong demand for industrial properties from shipbuilding, logistics and utilities companies, due to the present upbeat demand conditions.
Thai resort properties launch in China
Thai resort properties launch in China
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Engel & Völkers, one of the leading European real estate companies will unveil a number of its high-end luxury lifestyle properties in Hua Hin at the China International Luxury Property Show to be held on September 7-9,2007, in Shanghai, China.
Engel & Völkers is the leading real estate agency for luxury property worldwide. The Engel & Völkers network operates over 300 residential shops and commercial offices in 24 countries on 4 continents. Engel & Völkers’ Hua Hin Office will spearhead for the first time the launch of resorts properties from Hua Hin, Thailand to the mainland China market.
Hua Hin’s proximity to Bangkok has allowed the coastal village to become a favorite retreat for Thailand’s royal family. With white sandy beaches and rolling foothills, Hua Hin’s location offers the best of Thailand’s tropical climate and scenic landscapes. More and more people, not only the Thai elite, including expatriates, diplomats and retirees are recognizing the great potential of Hua Hin as second home town or a weekend retreat.
Engel & Völkers Hua Hin is set to launch Black Mountain Golf Course Homes, Panorama Pool Villas and KM Beach Condominiums as well as Hua Hin Boulevard into the China Market.
The open exhibition is to be held at the Shanghai International Convention Center. After China, an open exhibition of resort properties represented by Engel & Völkers Hua Hin will also be held in Dublin, Belgium and Hong Kong in the following months. Executives from Engel & Völkers Hua Hin will be on hand and available to meet with interested parties looking to invest.
The recently opened Black Mountain Golf Course is now launching the first phase of its residential development overlooking the magnificent golf course including 43 villas priced from US$1.2m to US$1.4 million, as well as a 120 unit condominium complex (From US$310,000 to US$800,000) and a condotel is also in the planning.
Panorama is a resort project with 65 individual Thai / Balinese inspired pool villas priced from US$270,000 to US$900,000 with 5 star resort facilities including club house and business center at your fingertips.
For investors looking to buy multiple units in one complex KM Beach Condominiums offers 36 beachfront condos from US$240,000 to US$450,000 per unit whilst Hua Hin Boulevard is a mixed development in the heart of Hua Hin consisting of a 78 unit condominium complex as well as a 4-storey shopping plaza. Prices for the condominium units range from US$90,000 to US$250,000 and guarantee great returns on investment within the first two years.
“Engel & Völkers Hua Hin is very excited in bringing high quality resort projects of the Hua Hin area to Shanghai. Our focus is on mid to high-end developments with outstanding capital appreciation and diversity. Our portfolio covers different market segments such as golf course projects, beachfront or resort developments and land plots. Engel & Völkers feels honored to be bringing the charms of Hua Hin to Shanghai giving investors the opportunity not only to invest into an emerging market with interesting capital gains from increasing property values that also lets owners use their investment for holidays or solely as rental property” says Bruce Davison, Managing Partner of Engel & Völkers Hua Hin, who will be attending the exhibition.
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Engel & Völkers, one of the leading European real estate companies will unveil a number of its high-end luxury lifestyle properties in Hua Hin at the China International Luxury Property Show to be held on September 7-9,2007, in Shanghai, China.
Engel & Völkers is the leading real estate agency for luxury property worldwide. The Engel & Völkers network operates over 300 residential shops and commercial offices in 24 countries on 4 continents. Engel & Völkers’ Hua Hin Office will spearhead for the first time the launch of resorts properties from Hua Hin, Thailand to the mainland China market.
Hua Hin’s proximity to Bangkok has allowed the coastal village to become a favorite retreat for Thailand’s royal family. With white sandy beaches and rolling foothills, Hua Hin’s location offers the best of Thailand’s tropical climate and scenic landscapes. More and more people, not only the Thai elite, including expatriates, diplomats and retirees are recognizing the great potential of Hua Hin as second home town or a weekend retreat.
Engel & Völkers Hua Hin is set to launch Black Mountain Golf Course Homes, Panorama Pool Villas and KM Beach Condominiums as well as Hua Hin Boulevard into the China Market.
The open exhibition is to be held at the Shanghai International Convention Center. After China, an open exhibition of resort properties represented by Engel & Völkers Hua Hin will also be held in Dublin, Belgium and Hong Kong in the following months. Executives from Engel & Völkers Hua Hin will be on hand and available to meet with interested parties looking to invest.
The recently opened Black Mountain Golf Course is now launching the first phase of its residential development overlooking the magnificent golf course including 43 villas priced from US$1.2m to US$1.4 million, as well as a 120 unit condominium complex (From US$310,000 to US$800,000) and a condotel is also in the planning.
Panorama is a resort project with 65 individual Thai / Balinese inspired pool villas priced from US$270,000 to US$900,000 with 5 star resort facilities including club house and business center at your fingertips.
For investors looking to buy multiple units in one complex KM Beach Condominiums offers 36 beachfront condos from US$240,000 to US$450,000 per unit whilst Hua Hin Boulevard is a mixed development in the heart of Hua Hin consisting of a 78 unit condominium complex as well as a 4-storey shopping plaza. Prices for the condominium units range from US$90,000 to US$250,000 and guarantee great returns on investment within the first two years.
“Engel & Völkers Hua Hin is very excited in bringing high quality resort projects of the Hua Hin area to Shanghai. Our focus is on mid to high-end developments with outstanding capital appreciation and diversity. Our portfolio covers different market segments such as golf course projects, beachfront or resort developments and land plots. Engel & Völkers feels honored to be bringing the charms of Hua Hin to Shanghai giving investors the opportunity not only to invest into an emerging market with interesting capital gains from increasing property values that also lets owners use their investment for holidays or solely as rental property” says Bruce Davison, Managing Partner of Engel & Völkers Hua Hin, who will be attending the exhibition.
The Landmark Scheme wins award
The Landmark Scheme wins award
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Hongkong Land has announced that The Landmark Scheme was named one of the five winners in the Urban Land Institute (ULI) Awards of Excellence: Asia Pacific. The US$210 million Scheme, formally completed in November 2006, has helped strengthen Central´s reputation as the heart of the city and reinforced The Landmark as a premier address in Hong Kong for world-class shopping,
dining and business.
The Awards for Excellence programme has been recognising superior achievements of excellence in land use planning since 1979. This is the third year of the Awards for Excellence programme in the Asia Pacific region. Five projects in three countries were selected as winners: one from Australia; two from Hong Kong; and two from Japan. The five winners were chosen from a field of 12 finalists.
Projects were evaluated based on financial viability, resourcefulness of land use, design, relevance to contemporary issues, and sensitivity to the community and environment. According to ULI, The Landmark Scheme "propels to the lead an already popular retail centre... Now, one hectare of valuable land gathers on one block luxury retail with offices and a 113-room hotel."
In a little over three years, Hongkong Land executed a comprehensive development and refurbishment programme that enhanced the surrounding cityscape and brought even more of the best in urban lifestyle to Hong Kong. A redesigned atrium for The Landmark, Asia´s first Harvey Nichols store, the new Landmark Mandarin Oriental hotel, more premium office space through the development of York House, and enhanced indoor and outdoor access are just a few of the programme´s components.
"We are delighted to be one of just five developments recognised by the Urban Land Institute in Asia this year," said Y K Pang, Chief Executive of Hongkong Land. "This award validates everything Hongkong Land set out to achieve with The Landmark Scheme—making one of the world´s best luxury developments even better, and helping strengthen Central´s status as the place to be."
Over the years, Hongkong Land has demonstrated its commitment to improving and enhancing Hong Kong´s CBD through its ambitious programme "Brand CENTRAL." This ongoing effort aims to further boost Central´s reputation as the head of the city through additions and refurbishments to some of the city´s most well-known shopping and business addresses, including Charter House, Exchange Square, Prince´s Building and Alexandra House, as well as the surrounding cityscape. Hongkong Land initiated The Landmark Scheme in August 2003 as the latest phase of this programme.
The ULI is a non-profit education and research institute supported by its members. Its mission is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. It was established in 1936 and has more than 37,000 members representing all aspects of land use.
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Hongkong Land has announced that The Landmark Scheme was named one of the five winners in the Urban Land Institute (ULI) Awards of Excellence: Asia Pacific. The US$210 million Scheme, formally completed in November 2006, has helped strengthen Central´s reputation as the heart of the city and reinforced The Landmark as a premier address in Hong Kong for world-class shopping,
dining and business.
The Awards for Excellence programme has been recognising superior achievements of excellence in land use planning since 1979. This is the third year of the Awards for Excellence programme in the Asia Pacific region. Five projects in three countries were selected as winners: one from Australia; two from Hong Kong; and two from Japan. The five winners were chosen from a field of 12 finalists.
Projects were evaluated based on financial viability, resourcefulness of land use, design, relevance to contemporary issues, and sensitivity to the community and environment. According to ULI, The Landmark Scheme "propels to the lead an already popular retail centre... Now, one hectare of valuable land gathers on one block luxury retail with offices and a 113-room hotel."
In a little over three years, Hongkong Land executed a comprehensive development and refurbishment programme that enhanced the surrounding cityscape and brought even more of the best in urban lifestyle to Hong Kong. A redesigned atrium for The Landmark, Asia´s first Harvey Nichols store, the new Landmark Mandarin Oriental hotel, more premium office space through the development of York House, and enhanced indoor and outdoor access are just a few of the programme´s components.
"We are delighted to be one of just five developments recognised by the Urban Land Institute in Asia this year," said Y K Pang, Chief Executive of Hongkong Land. "This award validates everything Hongkong Land set out to achieve with The Landmark Scheme—making one of the world´s best luxury developments even better, and helping strengthen Central´s status as the place to be."
Over the years, Hongkong Land has demonstrated its commitment to improving and enhancing Hong Kong´s CBD through its ambitious programme "Brand CENTRAL." This ongoing effort aims to further boost Central´s reputation as the head of the city through additions and refurbishments to some of the city´s most well-known shopping and business addresses, including Charter House, Exchange Square, Prince´s Building and Alexandra House, as well as the surrounding cityscape. Hongkong Land initiated The Landmark Scheme in August 2003 as the latest phase of this programme.
The ULI is a non-profit education and research institute supported by its members. Its mission is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. It was established in 1936 and has more than 37,000 members representing all aspects of land use.
Frasers opens third Bangkok property
Frasers opens third Bangkok property
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International serviced apartment developer Frasers is set to open its third Bangkok property, Fraser Suites Sukhumvit.
The 118 unit development, on Sukhumvit Soi 11, will open its doors to guests in October. Jacqui Cuthbertson, general manager of the development, says Fraser Suites Sukhumvit will provide both corporate and leisure guests with a high quality beautifully designed living space, suitable for both long and short-term stays.
“I think what’s important about this property is the design aspect of it and the facilities that we offer. We understand as Frasers that living in a foreign country is not just about the apartment that you’re living in. It’s also about the home environment, so the facilities that we’re offering always add value to the guest’s life when they’re in a foreign country.”
Rates start at Bt4,500 a night, and Frasers is offering discounted rates for long term guests. Facilities include a gym, swimming pool, sauna, restaurant, room service, meeting rooms which seat up to 20 people and a business centre. Apartments range in size and include 52sqm studios, 72sqm one-bedroom suites and 160sqm three bedroom penthouses. All units feature fully-fitted kitchens, washer/dryer and a full size fridge/freezer.
Cuthbertson says they expect the property to do well, as the very nature of the Sukhumvit area is that it attracts both types of travellers – corporate and leisure.
“We understand that serviced apartments are becoming the first choice for so many types of travelers so that it’s really sometimes the first option rather than a hotel for tourism and corporate travelers,” she said. “Because we’re targeting both markets we can be quite flexible and adapt our services to suit both types. There’s more space.”
Fraser Suites Sukhumvit is the Singapore firm´s third Bangkok property, joining Fraser Place in Langsuan and Fraser Suites in Sathorn.
“Frasers is always looking for new opportunities, especially where the market is strong,” said Cuthbertson. “In the first two developments we are achieving very high occupancy rates, which are proving to be sustainable all year round. Now Frasers has three very good locations throughout the city. It’s a great portfolio to offer all our guests.”
As for the current state of the serviced apartment market in Bangkok, Cuthbertson says Frasers is in a good position to continue to prosper, despite the high number of firms that enter the market every year. In fact, they even welcome the competition.
“It keeps us on our toes and raises the standard of quality, so that can only be a good thing for our guests.”
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International serviced apartment developer Frasers is set to open its third Bangkok property, Fraser Suites Sukhumvit.
The 118 unit development, on Sukhumvit Soi 11, will open its doors to guests in October. Jacqui Cuthbertson, general manager of the development, says Fraser Suites Sukhumvit will provide both corporate and leisure guests with a high quality beautifully designed living space, suitable for both long and short-term stays.
“I think what’s important about this property is the design aspect of it and the facilities that we offer. We understand as Frasers that living in a foreign country is not just about the apartment that you’re living in. It’s also about the home environment, so the facilities that we’re offering always add value to the guest’s life when they’re in a foreign country.”
Rates start at Bt4,500 a night, and Frasers is offering discounted rates for long term guests. Facilities include a gym, swimming pool, sauna, restaurant, room service, meeting rooms which seat up to 20 people and a business centre. Apartments range in size and include 52sqm studios, 72sqm one-bedroom suites and 160sqm three bedroom penthouses. All units feature fully-fitted kitchens, washer/dryer and a full size fridge/freezer.
Cuthbertson says they expect the property to do well, as the very nature of the Sukhumvit area is that it attracts both types of travellers – corporate and leisure.
“We understand that serviced apartments are becoming the first choice for so many types of travelers so that it’s really sometimes the first option rather than a hotel for tourism and corporate travelers,” she said. “Because we’re targeting both markets we can be quite flexible and adapt our services to suit both types. There’s more space.”
Fraser Suites Sukhumvit is the Singapore firm´s third Bangkok property, joining Fraser Place in Langsuan and Fraser Suites in Sathorn.
“Frasers is always looking for new opportunities, especially where the market is strong,” said Cuthbertson. “In the first two developments we are achieving very high occupancy rates, which are proving to be sustainable all year round. Now Frasers has three very good locations throughout the city. It’s a great portfolio to offer all our guests.”
As for the current state of the serviced apartment market in Bangkok, Cuthbertson says Frasers is in a good position to continue to prosper, despite the high number of firms that enter the market every year. In fact, they even welcome the competition.
“It keeps us on our toes and raises the standard of quality, so that can only be a good thing for our guests.”
New foreign ownership law in Cambodia?
New foreign ownership law in Cambodia?
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Cambodia´s private sector has urged the government to allow foreign ownership this week saying an open-minded real estate market would promote economic growth. The Cambodian investment law was amended back in 2005 to allow foreign ownership of permanent fixtures, but as yet has not been enforced. The non-implementation of the act has in fact rendered the amendments as a forgotten law, and as such has now become out dated. In the current legal understanding, the old law will only allow a property investment in the name of a Cambodian national but with the pressure from the private sector to increase wealth, urgent action will be required.
Chris Green, Head of Research at Obelisk International says ‘The key improvements to the property investment law would open up a whole new economic world to the country of Cambodia. These measures would not only further develop Cambodia´s property investment market, but the new interest from those investors who want to take advantage early, will not only create a boom putting Cambodia on the map, but will also make the country more competitive with its neighbours.’
American lawyer and chairman of the International Business Club, Bretton Sciaron comments on the property investment news ‘There are several reasons for urgent action, this is already a sector of the economy that is dynamic, but foreign ownership of apartments, condominiums and other such structures on the land will help spur further economic growth. Such a regulatory development will provide a dramatic indication that Cambodia has an investor-friendly environment.’
Vast new building projects have increased over the past few years, including a great number of satellite cities worth billions of dollars that when completed will fundamentally alter the appearance of the capital. After years of disorder within Cambodia, the country is now turning things around as a growing economy posting a steady 11% growth over the last three years, fuelled by a strong tourism industry and clothing manufactures.
Cambodian Commerce Minister, Cham Prasidh said that Cambodia still relies on international aid for half of its annual budget, but must now diversify by seeking more varied foreign investments. ‘There are other sectors we are trying to encourage, but we have to find out what are the sectors where we can be competitive. If we try to produce the same thing as Thailand or Malaysia, it will be very difficult’.
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Cambodia´s private sector has urged the government to allow foreign ownership this week saying an open-minded real estate market would promote economic growth. The Cambodian investment law was amended back in 2005 to allow foreign ownership of permanent fixtures, but as yet has not been enforced. The non-implementation of the act has in fact rendered the amendments as a forgotten law, and as such has now become out dated. In the current legal understanding, the old law will only allow a property investment in the name of a Cambodian national but with the pressure from the private sector to increase wealth, urgent action will be required.
Chris Green, Head of Research at Obelisk International says ‘The key improvements to the property investment law would open up a whole new economic world to the country of Cambodia. These measures would not only further develop Cambodia´s property investment market, but the new interest from those investors who want to take advantage early, will not only create a boom putting Cambodia on the map, but will also make the country more competitive with its neighbours.’
American lawyer and chairman of the International Business Club, Bretton Sciaron comments on the property investment news ‘There are several reasons for urgent action, this is already a sector of the economy that is dynamic, but foreign ownership of apartments, condominiums and other such structures on the land will help spur further economic growth. Such a regulatory development will provide a dramatic indication that Cambodia has an investor-friendly environment.’
Vast new building projects have increased over the past few years, including a great number of satellite cities worth billions of dollars that when completed will fundamentally alter the appearance of the capital. After years of disorder within Cambodia, the country is now turning things around as a growing economy posting a steady 11% growth over the last three years, fuelled by a strong tourism industry and clothing manufactures.
Cambodian Commerce Minister, Cham Prasidh said that Cambodia still relies on international aid for half of its annual budget, but must now diversify by seeking more varied foreign investments. ‘There are other sectors we are trying to encourage, but we have to find out what are the sectors where we can be competitive. If we try to produce the same thing as Thailand or Malaysia, it will be very difficult’.
Wednesday, August 1, 2007
Baht strengthens- real estate suffers
Baht strengthens- real estate suffers
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The rapid increase in the US dollar and Thai baht exchange rate has largely been explained as weakness of the US dollar around the globe, and more recently by continued inflow of foreign capital to Thailand (particularly via the stock market). Thai baht strength has not only become a major concern for exporters, but also has implications for Thailand´s real estate sectors.
Mrs. Suphin Mechuchep, Managing Director of Jones Lang LaSalle Thailand, said "Whilst certain economists encourage the government to reduce interest rates further in effort to curb the baht strength, low interest rates would help property developers burdened with borrowings. They would also benefit the residential sectors as mortgage for home purchases will be less costly for buyers. However, we expect the impact of the strong Baht to be more negative than positive on the real estate sector."
With the recent poltitcal implications to plague Thailand its economy- domestic consumption, investment and government expenditure has slowed considerably. In response to this, the Thai economy has mostly been driven by exports. Conditions for the domestic factors are set to improve if poltical issues can be resolved over the medium term .However, the threat that the strong baht poses to the export sector is weakening the near term outlook. According to Jones Lang LaSalle Thailand, the industrial property sector is likely to be the sector most negatively impacted by the strengthening of the Thai baht.
Mr. Subyagorn Sansugtaweesub, Head of Industrial at Jones Lang LaSalle, said "Despite high capacity utilisation rates, manufacturers, particularly those in the export sector, appear unwilling to invest further at this time, in part due to concerns that further appreciation of the currency will damage their competitiveness in global markets."
"With a number of existing facilities having been reportedly shut down, manufacturers are actively looking at other locations in the region that offer more competitive resources. Besides the factories themselves, this could negatively impact other industrial real estate, such as warehouses and logistics centers," he added.
Manufacturing is not the only sector to suffer due to the stronger Thai baht- the residential and resort real estate secotr in Thailand, looks set to experience a downfall. Most of the investors looking at these propertities in Thailand are either residing in Thailand as a second home buyer or a retirement residence. As the domesitc currency as strengthened, these buyers are getting less for their dollar, which is deterring people from buying.
The same trend applies to real estate from a broader investment perspective. Though Thai properties still appear inexpensive relative to comparable product in many other markets around the Asian Pacific region, the prices have risen significantly when quoted in US dollars.
"If overseas investors decide to acquire real estate assets in Thailand now, they may have to pay approximately 8% more, comparing to the beginning of the year, due the baht appreciation," Mrs. Suphin said.
Jones Lang LaSalle is the world´s leading real estate money management and services firm, operating in over 430 cities worldwide.
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The rapid increase in the US dollar and Thai baht exchange rate has largely been explained as weakness of the US dollar around the globe, and more recently by continued inflow of foreign capital to Thailand (particularly via the stock market). Thai baht strength has not only become a major concern for exporters, but also has implications for Thailand´s real estate sectors.
Mrs. Suphin Mechuchep, Managing Director of Jones Lang LaSalle Thailand, said "Whilst certain economists encourage the government to reduce interest rates further in effort to curb the baht strength, low interest rates would help property developers burdened with borrowings. They would also benefit the residential sectors as mortgage for home purchases will be less costly for buyers. However, we expect the impact of the strong Baht to be more negative than positive on the real estate sector."
With the recent poltitcal implications to plague Thailand its economy- domestic consumption, investment and government expenditure has slowed considerably. In response to this, the Thai economy has mostly been driven by exports. Conditions for the domestic factors are set to improve if poltical issues can be resolved over the medium term .However, the threat that the strong baht poses to the export sector is weakening the near term outlook. According to Jones Lang LaSalle Thailand, the industrial property sector is likely to be the sector most negatively impacted by the strengthening of the Thai baht.
Mr. Subyagorn Sansugtaweesub, Head of Industrial at Jones Lang LaSalle, said "Despite high capacity utilisation rates, manufacturers, particularly those in the export sector, appear unwilling to invest further at this time, in part due to concerns that further appreciation of the currency will damage their competitiveness in global markets."
"With a number of existing facilities having been reportedly shut down, manufacturers are actively looking at other locations in the region that offer more competitive resources. Besides the factories themselves, this could negatively impact other industrial real estate, such as warehouses and logistics centers," he added.
Manufacturing is not the only sector to suffer due to the stronger Thai baht- the residential and resort real estate secotr in Thailand, looks set to experience a downfall. Most of the investors looking at these propertities in Thailand are either residing in Thailand as a second home buyer or a retirement residence. As the domesitc currency as strengthened, these buyers are getting less for their dollar, which is deterring people from buying.
The same trend applies to real estate from a broader investment perspective. Though Thai properties still appear inexpensive relative to comparable product in many other markets around the Asian Pacific region, the prices have risen significantly when quoted in US dollars.
"If overseas investors decide to acquire real estate assets in Thailand now, they may have to pay approximately 8% more, comparing to the beginning of the year, due the baht appreciation," Mrs. Suphin said.
Jones Lang LaSalle is the world´s leading real estate money management and services firm, operating in over 430 cities worldwide.
Bangkok’s easing property market
Bangkok’s easing property market
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Bangkok’s property market in the first half of 2007 may have showed considerable signs of a slow down, but the short-term outlook has improved due to Thailand’s political instabilities improving. According to real estate services and investment management firm Jones Lang LaSalle, the future of the property market in the second half of the year depends highly on the overall prospect of the economy.
Mrs. Suphin Mechuchep, Managing Director of Jones Lang LaSalle, says "The lack of consumer and investor confidence experienced over the past 18 months due to the political chaos continued to negatively affect the commercial property markets in the first half of 2007. Demand for office and retail space grew only marginally as businesses were reluctant to expand. In the second quarter of the year, sentiment looked up to a certain degree, largely due to a clearer political picture and the interim government’s stated commitment to holding general elections by the end of the year. However, Jones Lang LaSalle’s latest study shows leasing activity in the office and retail sectors remained generally quiet as businesses’ continued to take wait-and-see stances."
“Many observers are calling an oversupply in the condominium market. While our findings show the market has continued to enjoy strong demand, based on anecdotal evidence, a large proportion of condominium purchases in central Bangkok are made by investors buying and intending to put units up for rent. With competition in the leasing market further intensifying as more units are completed and offered for rent, demand from investors could wane in the near future,” says Mrs. Suphin.
Office market suppressed
Two new office projects- King Power Complex Building and Pipattanasin Tower, with 20,550 sqm of combined space were completed in Bangkok in the first half of 2007. Two office buildings with some 20,000 sqm of space were withdrawn from the market over the same period, leaving the total office space stock unchanged 7.4 million sqm. The average vacancy rate for all-grade office space across Bangkok contracted slightly to 13.2% while vacancies in grade A buildings in Central Business District (CBD) averaged 11.3%.
Leasing activity in Thailand appears to be relatively subdued, currently due to the lack of new businesses being developed and set up. Also existing corporations and businesses are not appearing to require further office space or make any changes.
Ms. Caroline Murphy, Head of Markets at Jones Lang LaSalle, says “Over the first half of 2007, the Bangkok office markets witnessed only a limited number of new leases. Leasing activity over the period was predominantly for renewals. Whilst net take-up of new office space across Bangkok in the first half of 2007 totalled only 66,000 sqm, Jones Lang LaSalle alone helped corporate secure lease renewals accounting for combined space of 31,000 sqm over the same period. This exemplifies the case well.”
"Realising a slow growth of new demand, landlords have become less aggressive in demanding higher rents on new leases so as to attract new tenants," says Ms. Caroline.
Jones Land LaSalle’s study indicates that the average rental for all-grade office space in Bangkok has continued to escalate for six consecutive years now. Rates have seen such a dramatic growth from Bt262 per sqm a month to its present level of Bt403 per sqm per month. However, rents remained flat for the first time since 2001, during the first half of 2007. In the Grade- A market in CBD, the average rental rose only slightly by 2.5% over the same period to Bt666 per sqm per month.
Bangkok, in the second half of 2007 welcomed two new offices with a combined space of 101,000 sqm on to the market. This included- Athenee Tower (40,000 sqm) on Wireless Road off Sukhumvit and Cyber World (61,000 sqm) onto Ratchadapisek Road. Both of the projects were developed by T.C.C. Group and Jones Lang LaSalle were appointed leasing agents for both projects.
Ms Murphy comments "With over 100,000 sqm of new space coming on in stream in the Bangkok office market during the second half of 2007, we may see vacancies rise by year end, should demand continue to grow at the same pace as over the past six months. However, with political uncertainty clearing up and economists expecting the Thai economy to improve in the second half of the year, demand for office space may pick up in the second half of the year."
The completion of nearly 200,000 sqm of office space is set for 2008. "Though the Thai economy is expected to see some improvement next year following the general elections, statistics show that the average take-up rate for office space in Bangkok in a ´normal´ situation is 250,000 sqm per annum, it remains questionable whether demand in 2008 will reach that level. This will depend mainly on the economic growth that Thailand will achieve next year," said Ms. Murphy.
Close eye to be kept on the condo market
Concerns are growing regarding the condo sector of the market in Bangkok, despite the fact the bubble could soon burst, findings from Jones Lang LaSalle’s study show that the market for new projects remains robust. Over the past six months growth has continued and new supply and demand is keeping the market flourishing.
According to a recent Jones Lang LaSalle’s study, the number of condominium units in central Bangkok now totals 54,280, including 3,630 units completed over the past six months. More than 20,000 units are currently under construction, with twenty new projects comprising 5,420 units launched in the first half of 2007.
Mr. Dan Tantisunthorn, Head of Research at Jones Lang LaSalle, says "In spite of growing concerns that condominiums are overbuilt in Bangkok, our study shows that over 97% of the units in completed projects have already been sold. Among projects that are currently under construction or being marketed, the sales rate still appears healthy at over 75% of the units offered."
Over the past six months, Jones Lang LaSalle’ study indicates that over 6,000 condo’s were sold in central areas in Bangkok over the past six months. The projects mainly were mainly located in the CBD areas, with close proximity to the BTS or MRT stations. Most of these units were the studio and one-bedroom types with prices ranging between Bt1.4- Bt2.0 million, targeted at growing demand from a new generation of young professionals who have limited budgets but prefer living in a condominium in or with mass-transit access to the city centre.
"In spite of certain indications that the condominium sector is booming, there are a number of factors which lead us to believe the market is nearing a peak," says Mr. Dan "Asking prices are rising at a much slower rate compared with previous years and existing supply is remaining idle for longer periods of time," he adds.
Statistics from Jones Lang LaSalle show that average asking prices of condominiums in central Bangkok saw the biggest jumps in 2003 and 2004, of almost 30%. Price growth slowed to an average of 10% per annum in 2005 and 2006. In the first half of 2007, prices grew only slightly, by 1.5% on average to the present average level of 81,000 baht/sqm.
"In addition, investors buying units with the intention to put them up for rent represent a large source of demand for condominiums in central Bangkok. As construction of more projects is completed, competition in the leasing market will further intensify. Many investors may achieve returns lower than expected as rents are being pressured downwards as more supply arrives on the market. As a result, potential condominium investors may take a more rational approach to purchasing. As such, we believe that the success of future projects will depend on the ability to meet end user needs, rather than those of investors," Mr Dan explains.
Competition strengthens in residential leasing market
Bangkok’s residential leasing market in the central business areas has remained active over the past six months with a continued influx of expatriates into Thailand. However, competition has strengthen considerably as new condo’s are completed and put onto the market.
Whilst large units, including penthouses, with four bedrooms are in high demand among from the families of senior management, smaller units are facing fierce competition due to fast growth of new supply.
As a result, condominium rents in central Bangkok have seen a remarkable drop compared to 2006. For example, a two bedroom type that was previously offered for rent at an average rate of Bt75,000 per month, is now achieving lower rents ranging between Bt55,000 and Bt65,000 per month, while the average monthly rent for smaller units of 70-80 sqm fell from Bt55,000 in 2006 to a range between Bt40,000 and Bt45,000.
Mrs. Daonum Verapong, Head of Residential Agency at Jones Lang LaSalle, said "Strong competition in the condominium rental market is pushing rents downwards. This is mainly due to continued amount of new condominium supply entering the market. Though demand remains strong, its growth cannot keep pace with new supply. On the other hand, large units with four bedrooms continue to enjoy strong rents averaging 180,000 baht per month as supply is limited. This trend will continue until the rental market reaches a new equilibrium."
There is a growing trend of detached housing developments entering the Bangkok residential leasing market. Several small housing estates in prime residential locations have recently been developed targeted at expats looking to rent. These projects were typically family-run and have been leasing well. This year, we have seen more housing developments by well-known developers entering this particular segment of the leasing market. In the most recent case, Jones Lang LaSalle was appointed by Property Perfect Plc to lease 10 luxury houses at Perfect Masterpiece Ekamai-Ramindra.
Outlook for the future
Economic growth within Bangkok is seriously going to affect the property market’s outlook over the next year. If the Thai economy continues to improve during the remainder of 2007 as expected by many given a more stable political situation, the Bangkok property will benefit. Improved consumer and investor confidence will encourage demand in both commercial and residential property sectors.
Advertisement
Bangkok’s property market in the first half of 2007 may have showed considerable signs of a slow down, but the short-term outlook has improved due to Thailand’s political instabilities improving. According to real estate services and investment management firm Jones Lang LaSalle, the future of the property market in the second half of the year depends highly on the overall prospect of the economy.
Mrs. Suphin Mechuchep, Managing Director of Jones Lang LaSalle, says "The lack of consumer and investor confidence experienced over the past 18 months due to the political chaos continued to negatively affect the commercial property markets in the first half of 2007. Demand for office and retail space grew only marginally as businesses were reluctant to expand. In the second quarter of the year, sentiment looked up to a certain degree, largely due to a clearer political picture and the interim government’s stated commitment to holding general elections by the end of the year. However, Jones Lang LaSalle’s latest study shows leasing activity in the office and retail sectors remained generally quiet as businesses’ continued to take wait-and-see stances."
“Many observers are calling an oversupply in the condominium market. While our findings show the market has continued to enjoy strong demand, based on anecdotal evidence, a large proportion of condominium purchases in central Bangkok are made by investors buying and intending to put units up for rent. With competition in the leasing market further intensifying as more units are completed and offered for rent, demand from investors could wane in the near future,” says Mrs. Suphin.
Office market suppressed
Two new office projects- King Power Complex Building and Pipattanasin Tower, with 20,550 sqm of combined space were completed in Bangkok in the first half of 2007. Two office buildings with some 20,000 sqm of space were withdrawn from the market over the same period, leaving the total office space stock unchanged 7.4 million sqm. The average vacancy rate for all-grade office space across Bangkok contracted slightly to 13.2% while vacancies in grade A buildings in Central Business District (CBD) averaged 11.3%.
Leasing activity in Thailand appears to be relatively subdued, currently due to the lack of new businesses being developed and set up. Also existing corporations and businesses are not appearing to require further office space or make any changes.
Ms. Caroline Murphy, Head of Markets at Jones Lang LaSalle, says “Over the first half of 2007, the Bangkok office markets witnessed only a limited number of new leases. Leasing activity over the period was predominantly for renewals. Whilst net take-up of new office space across Bangkok in the first half of 2007 totalled only 66,000 sqm, Jones Lang LaSalle alone helped corporate secure lease renewals accounting for combined space of 31,000 sqm over the same period. This exemplifies the case well.”
"Realising a slow growth of new demand, landlords have become less aggressive in demanding higher rents on new leases so as to attract new tenants," says Ms. Caroline.
Jones Land LaSalle’s study indicates that the average rental for all-grade office space in Bangkok has continued to escalate for six consecutive years now. Rates have seen such a dramatic growth from Bt262 per sqm a month to its present level of Bt403 per sqm per month. However, rents remained flat for the first time since 2001, during the first half of 2007. In the Grade- A market in CBD, the average rental rose only slightly by 2.5% over the same period to Bt666 per sqm per month.
Bangkok, in the second half of 2007 welcomed two new offices with a combined space of 101,000 sqm on to the market. This included- Athenee Tower (40,000 sqm) on Wireless Road off Sukhumvit and Cyber World (61,000 sqm) onto Ratchadapisek Road. Both of the projects were developed by T.C.C. Group and Jones Lang LaSalle were appointed leasing agents for both projects.
Ms Murphy comments "With over 100,000 sqm of new space coming on in stream in the Bangkok office market during the second half of 2007, we may see vacancies rise by year end, should demand continue to grow at the same pace as over the past six months. However, with political uncertainty clearing up and economists expecting the Thai economy to improve in the second half of the year, demand for office space may pick up in the second half of the year."
The completion of nearly 200,000 sqm of office space is set for 2008. "Though the Thai economy is expected to see some improvement next year following the general elections, statistics show that the average take-up rate for office space in Bangkok in a ´normal´ situation is 250,000 sqm per annum, it remains questionable whether demand in 2008 will reach that level. This will depend mainly on the economic growth that Thailand will achieve next year," said Ms. Murphy.
Close eye to be kept on the condo market
Concerns are growing regarding the condo sector of the market in Bangkok, despite the fact the bubble could soon burst, findings from Jones Lang LaSalle’s study show that the market for new projects remains robust. Over the past six months growth has continued and new supply and demand is keeping the market flourishing.
According to a recent Jones Lang LaSalle’s study, the number of condominium units in central Bangkok now totals 54,280, including 3,630 units completed over the past six months. More than 20,000 units are currently under construction, with twenty new projects comprising 5,420 units launched in the first half of 2007.
Mr. Dan Tantisunthorn, Head of Research at Jones Lang LaSalle, says "In spite of growing concerns that condominiums are overbuilt in Bangkok, our study shows that over 97% of the units in completed projects have already been sold. Among projects that are currently under construction or being marketed, the sales rate still appears healthy at over 75% of the units offered."
Over the past six months, Jones Lang LaSalle’ study indicates that over 6,000 condo’s were sold in central areas in Bangkok over the past six months. The projects mainly were mainly located in the CBD areas, with close proximity to the BTS or MRT stations. Most of these units were the studio and one-bedroom types with prices ranging between Bt1.4- Bt2.0 million, targeted at growing demand from a new generation of young professionals who have limited budgets but prefer living in a condominium in or with mass-transit access to the city centre.
"In spite of certain indications that the condominium sector is booming, there are a number of factors which lead us to believe the market is nearing a peak," says Mr. Dan "Asking prices are rising at a much slower rate compared with previous years and existing supply is remaining idle for longer periods of time," he adds.
Statistics from Jones Lang LaSalle show that average asking prices of condominiums in central Bangkok saw the biggest jumps in 2003 and 2004, of almost 30%. Price growth slowed to an average of 10% per annum in 2005 and 2006. In the first half of 2007, prices grew only slightly, by 1.5% on average to the present average level of 81,000 baht/sqm.
"In addition, investors buying units with the intention to put them up for rent represent a large source of demand for condominiums in central Bangkok. As construction of more projects is completed, competition in the leasing market will further intensify. Many investors may achieve returns lower than expected as rents are being pressured downwards as more supply arrives on the market. As a result, potential condominium investors may take a more rational approach to purchasing. As such, we believe that the success of future projects will depend on the ability to meet end user needs, rather than those of investors," Mr Dan explains.
Competition strengthens in residential leasing market
Bangkok’s residential leasing market in the central business areas has remained active over the past six months with a continued influx of expatriates into Thailand. However, competition has strengthen considerably as new condo’s are completed and put onto the market.
Whilst large units, including penthouses, with four bedrooms are in high demand among from the families of senior management, smaller units are facing fierce competition due to fast growth of new supply.
As a result, condominium rents in central Bangkok have seen a remarkable drop compared to 2006. For example, a two bedroom type that was previously offered for rent at an average rate of Bt75,000 per month, is now achieving lower rents ranging between Bt55,000 and Bt65,000 per month, while the average monthly rent for smaller units of 70-80 sqm fell from Bt55,000 in 2006 to a range between Bt40,000 and Bt45,000.
Mrs. Daonum Verapong, Head of Residential Agency at Jones Lang LaSalle, said "Strong competition in the condominium rental market is pushing rents downwards. This is mainly due to continued amount of new condominium supply entering the market. Though demand remains strong, its growth cannot keep pace with new supply. On the other hand, large units with four bedrooms continue to enjoy strong rents averaging 180,000 baht per month as supply is limited. This trend will continue until the rental market reaches a new equilibrium."
There is a growing trend of detached housing developments entering the Bangkok residential leasing market. Several small housing estates in prime residential locations have recently been developed targeted at expats looking to rent. These projects were typically family-run and have been leasing well. This year, we have seen more housing developments by well-known developers entering this particular segment of the leasing market. In the most recent case, Jones Lang LaSalle was appointed by Property Perfect Plc to lease 10 luxury houses at Perfect Masterpiece Ekamai-Ramindra.
Outlook for the future
Economic growth within Bangkok is seriously going to affect the property market’s outlook over the next year. If the Thai economy continues to improve during the remainder of 2007 as expected by many given a more stable political situation, the Bangkok property will benefit. Improved consumer and investor confidence will encourage demand in both commercial and residential property sectors.
Bangkok Office Rents Flat While Hong Kong And Singapore Hit Record Highs
Bangkok Office Rents Flat While Hong Kong And Singapore Hit Record Highs
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With the average rent for prime office space in the central business district of Bangkok remaining just slightly more than THB740 per square meter (psm) a month (US$22), office rentals in Bangkok are some of the cheapest in the region.
Other Asian cities are charging well over THB2,000 psm (US$60). International Financial Center Tower 2 (IFC Tower 2), the highest building in Hong Kong, has attained a record rental of about THB7,400 psm (US$220). Other Asian cities such as Singapore are charging an average of about THB2,000 psm (US$60), while offices in Ho Chi Minh City are charging almost twice that of Bangkok at about THB1,480 psm (US$44). Average grade A office rents in Tokyo are over THB4,500 psm, making them the most expensive office space in Asia.
The slowing economy at present is also pushing rentals in Bangkok even lower with the average rent for prime office in the second quarter of 2007 dropping for the first time since 2000 on a quarter-on-quarter basis. CB Richard Ellis projects that the downward pressure on rental rates could further increase at the end of the year when new grade A supply is coming out into the market.
The situation, however, will not last for long. "We believe that once the business confidence is restored, then new demand will exceed increased supply. The market has had close to 300,000 sq.m. of new take up annually since 2000, only falling in 2006 and 2007. There is 520,000 sq.m. of new supply from 2007-2009, or about 173,000 sq.m. a year. Demand could exceed supply and rents will start to grow again," said Mr. Nithipat Tongpun, director and head of Office and Retail Services at CB Richard Ellis Thailand.
Demand has fallen because of a weak domestic economy and also because of uncertainty of the proposed amendments to the Foreign Business Act controlling foreign investment in service companies. Many overseas companies have delayed expansion and there has been limited new foreign investment in the service sector. This has resulted in occupied offices falling dramatically. New net take up of office space fell by more than 30% in the first quarter on a year-on-year basis. This was the lowest quarterly take up since 2000.
Grade A office rentals in Bangkok had been rising with rent increasing approximately 10% a year since 2000. The second quarter of 2007 is the first time since the millennium that prime rentals actually dropped on a quarterly basis.
For the overall office market situation, CB Richard Ellis saw that weakening demand continued to put pressure on rentals in the first half of this year. Although the second quarter´s new take up of prime office space in Bangkok improved from Q1 2007, it was slightly lower than the same period last year. There were more inquiries for office space, but most of them were from small tenants, indicating that large expansion plans were still put on hold. Prime office supply continued to be limited in the downtown area. The total supply of prime office space in Bangkok remained unchanged, leading to the continued drop in the vacancy rate even with a small amount of new take up. The average occupancy rate for prime office space, however, was still high at 93% in Q2 2007.
"The office market is not likely to improve in the near term if the current political and economic uncertainties continue well into the second half of 2007. A rebound in take-up will be crucial to this year´s performance. The office market looks set to register a lower level of whole-year new take-up compared to last year´s 200,000 sq.m. of new take up. The situation could reverse if the demand comes back. Market sentiment seemed to improve slightly towards the end of the second quarter with public and private consumption increases and we hope this will stimulate the slowing economy and the office market," said Nithipat Tongpun.
Advertisement
With the average rent for prime office space in the central business district of Bangkok remaining just slightly more than THB740 per square meter (psm) a month (US$22), office rentals in Bangkok are some of the cheapest in the region.
Other Asian cities are charging well over THB2,000 psm (US$60). International Financial Center Tower 2 (IFC Tower 2), the highest building in Hong Kong, has attained a record rental of about THB7,400 psm (US$220). Other Asian cities such as Singapore are charging an average of about THB2,000 psm (US$60), while offices in Ho Chi Minh City are charging almost twice that of Bangkok at about THB1,480 psm (US$44). Average grade A office rents in Tokyo are over THB4,500 psm, making them the most expensive office space in Asia.
The slowing economy at present is also pushing rentals in Bangkok even lower with the average rent for prime office in the second quarter of 2007 dropping for the first time since 2000 on a quarter-on-quarter basis. CB Richard Ellis projects that the downward pressure on rental rates could further increase at the end of the year when new grade A supply is coming out into the market.
The situation, however, will not last for long. "We believe that once the business confidence is restored, then new demand will exceed increased supply. The market has had close to 300,000 sq.m. of new take up annually since 2000, only falling in 2006 and 2007. There is 520,000 sq.m. of new supply from 2007-2009, or about 173,000 sq.m. a year. Demand could exceed supply and rents will start to grow again," said Mr. Nithipat Tongpun, director and head of Office and Retail Services at CB Richard Ellis Thailand.
Demand has fallen because of a weak domestic economy and also because of uncertainty of the proposed amendments to the Foreign Business Act controlling foreign investment in service companies. Many overseas companies have delayed expansion and there has been limited new foreign investment in the service sector. This has resulted in occupied offices falling dramatically. New net take up of office space fell by more than 30% in the first quarter on a year-on-year basis. This was the lowest quarterly take up since 2000.
Grade A office rentals in Bangkok had been rising with rent increasing approximately 10% a year since 2000. The second quarter of 2007 is the first time since the millennium that prime rentals actually dropped on a quarterly basis.
For the overall office market situation, CB Richard Ellis saw that weakening demand continued to put pressure on rentals in the first half of this year. Although the second quarter´s new take up of prime office space in Bangkok improved from Q1 2007, it was slightly lower than the same period last year. There were more inquiries for office space, but most of them were from small tenants, indicating that large expansion plans were still put on hold. Prime office supply continued to be limited in the downtown area. The total supply of prime office space in Bangkok remained unchanged, leading to the continued drop in the vacancy rate even with a small amount of new take up. The average occupancy rate for prime office space, however, was still high at 93% in Q2 2007.
"The office market is not likely to improve in the near term if the current political and economic uncertainties continue well into the second half of 2007. A rebound in take-up will be crucial to this year´s performance. The office market looks set to register a lower level of whole-year new take-up compared to last year´s 200,000 sq.m. of new take up. The situation could reverse if the demand comes back. Market sentiment seemed to improve slightly towards the end of the second quarter with public and private consumption increases and we hope this will stimulate the slowing economy and the office market," said Nithipat Tongpun.
Samui welcomes the big brands
Samui welcomes the big brands
By Jim Clarke
Advertisement
Before the turn of the millennium, the biggest brand on Koh Samui was probably Bob Marley, but massive economic growth and major developments in tourism have led to a significant increase in global interest and investment. As is often the case, it was the retail sector that led the brand invasion with golden arches, superstores and high street pharmaceuticals taking over from street stalls and family-run corner shops. More recently, the hospitality sector followed suit with mainstream hotel chains and now, largely on the back of big name resorts with mixed use strategies, the island’s property industry has expanded to include international, corporate agencies and developers.
In the coming months, well known firms such as CB Richard Ellis, Savills and Raimon Land will all begin to exert their influence on Samui, either representing or developing projects that will eventually transform the island’s residential landscape. The advent of “Brand Samui” may mark the beginning of a new phase in the island’s evolution and could stimulate the recovery that many feel is now desperately needed.
“What’s coming online now around Samui is very different from before,” says Robert Collins, managing director of Savills, Thailand. “Many of the new projects under way will prove even more significant for the island than the construction of new golf courses and the arrival of new airlines. Resort brands offer an international seal of approval.”
Having begun sales and marketing for two major new villa/condominium projects on Samui - Infinity and Peregrina Bay - with international sporting celebrities already on the client list, Savills will also represent the new Conrad Koh Samui Residence, which launches in Hong Kong and Bangkok this October. Robert Collins says that despite a difficult 12 months for the island, his firm is now confident that Samui is showing real signs of a sustainable recovery. “Our involvement has come on the back of client´s needs,” he said.
“Sophisticated international investors demand quality representation on the ground and, more importantly, they recognize the need for pro-active marketing overseas. Larger brands will begin to pull investors away from non-branded products and experienced, regional sales teams like ours offer a more co-ordinated marketing and PR strategy to target suitable clients. Particularly at the higher end.”
This shift will also mean a more stable, reliable property market on Samui, with high value completed properties slowly taking over from off-plan sales, and professional management contracts providing buyers with guaranteed yields. Companies like Dhevatara Properties, with three luxury developments in separate locations, all constructed without the need for pre-sales, set a standard for others to follow. As a result of such projects, the island’s reputation for high-risk, high return investments may soon change.
“Many of the local agents that focused on land sales have been running on pilot lights for several months now,” says Collins. “These firms are likely to move into re-sales as the bigger brands take over.”
Another major company that’s keen to capitalize on the island’s new found global status is CB Richard Ellis, a firm that boasts over 350 offices in 58 countries worldwide and plans to add to this in September on Samui. Like Savills, CBRE will arrive with a branded product to represent, namely, W Samui, an integrated development with a hotel component and “W Residences,” which will offer a limited number of exclusive villas for sale, also to be managed under the W Hotel brand.
“What’s exciting on Samui is that, until now, there have been no real brand investments.” says Charlotte Filleul, General Manager of Resort Properties. “The island is going through the same stages seen in most resort destinations, moving from a straight tourism market to a retirement and residential location. W Residences, and other products like it will improve quality through competition.”
Despite its global reach, CBRE still sees the initial client base for Samui projects coming from regional destinations like Hong Kong and Singapore. However, Filleul believes the market is expanding rapidly to attract other international investors from places like Europe and the US, and that these buyers will demand high quality services. “CBRE has the experience and resources to advise people on how to negotiate unfamiliar territory,” she said. “This will be a key factor as stronger marketing draws more investors from outside Asia.”
Obviously, in the current political climate, issues such as ownership and legal structures are particularly important when investing in Thailand and the larger agencies have the experience and contacts to keep in touch with the situation and advise their clients accordingly. “The arrival of established brands can only create better services,” said Filleul. “There’s still plenty of room for improvement on Samui and even the local agents appreciate the need for a more international approach.”
But it’s not only property agents that are keen to take advantage of Samui’s enduring appeal. Major developers are also looking to get a foothold in the island’s predicted recovery. Individual investors spearheaded the initial boom, which is one reason why Samui now enjoys unique opportunities for high-end villa rentals, but there were very few large-scale developers prepared to risk anything beyond small, gated communities and those that did so worked exclusively off-plan.
The above-mentioned Dhevatara Properties was the first company to challenge this approach, marketing completed properties direct to clients in the West. Now, other large firms like Raimon Land, one of Thailand’s biggest luxury residential property developers, are also planning to invest on the island. “Samui is a niche market that offers something different,” says Henri Young, the firm’s marketing manager. “We have two large sites currently under due diligence with a view to developing branded condominium projects. There are very few condo developments on the island at present, and local developers are less keen than before to build themselves, so now is a good time for us to invest.”
Despite a general shift toward the south of the island for many of the newer high-end villa projects, Raimon Land plan to build their projects closer to the airport and main tourist centres. Young believes that although peace and tranquility is an important factor for buyers, most people also appreciate proximity to major attractions and services. “The north coast offers a good combination of relative seclusion and easy access to the best restaurants, shopping and nightlife,” he said. “We are also looking at the area around Lamai Beach. The south of the island is certainly attractive, but this suits longer term projects.”
Whatever the location, experts like Young believe it is essential to market Samui’s uniqueness internationally and also to match that with products that are distinct from those found in other destinations. Like many of his counterparts, he is not concerned by recent bad press and sees events like the popular Samui Regatta and plans for a second golf course as a positive indication that the island will attract increasingly high net worth clients. Although it is unlikely that developers like Raimon Land will treat the island as a primary market, their involvement will certainly mean a further increase in branded, quality developments.
So what does this mean for the island’s existing property companies? The more established firms will certainly look to become involved in the brand revolution, while others may switch to focus more on resale and rental services. John Birt heads up Samui Villas and Homes, perhaps the island’s most established sales, development and villa rental agency, and one of the few Samui companies that is actually expanding beyond the island’s shores to Phuket. He worked with most of the big name developers and agents before setting up shop on the island, and does not see their arrival as a threat. “Brands will obviously benefit Samui in terms of global reputation,” he said, “but beyond specific projects, I’m not sure there’s enough product to justify large agencies establishing themselves here. Resort properties offer comfort for investors, but it should also be remembered that in Thailand, management and service contracts are only valid as long as the owners remain the same. Several large resort brands have changed hands in recent years, this is certainly worth bearing in mind.”
Such concerns have to be addressed if Koh Samui is to shake off its reputation as a high-risk investment option and become a global brand destination. Corporate investment will certainly add value as the island bids to become a branded residential destination. However, practical considerations such as infrastructure improvements and legal clarity will also come under increasing scrutiny as the major players move in to stake their claim.
By Jim Clarke
Advertisement
Before the turn of the millennium, the biggest brand on Koh Samui was probably Bob Marley, but massive economic growth and major developments in tourism have led to a significant increase in global interest and investment. As is often the case, it was the retail sector that led the brand invasion with golden arches, superstores and high street pharmaceuticals taking over from street stalls and family-run corner shops. More recently, the hospitality sector followed suit with mainstream hotel chains and now, largely on the back of big name resorts with mixed use strategies, the island’s property industry has expanded to include international, corporate agencies and developers.
In the coming months, well known firms such as CB Richard Ellis, Savills and Raimon Land will all begin to exert their influence on Samui, either representing or developing projects that will eventually transform the island’s residential landscape. The advent of “Brand Samui” may mark the beginning of a new phase in the island’s evolution and could stimulate the recovery that many feel is now desperately needed.
“What’s coming online now around Samui is very different from before,” says Robert Collins, managing director of Savills, Thailand. “Many of the new projects under way will prove even more significant for the island than the construction of new golf courses and the arrival of new airlines. Resort brands offer an international seal of approval.”
Having begun sales and marketing for two major new villa/condominium projects on Samui - Infinity and Peregrina Bay - with international sporting celebrities already on the client list, Savills will also represent the new Conrad Koh Samui Residence, which launches in Hong Kong and Bangkok this October. Robert Collins says that despite a difficult 12 months for the island, his firm is now confident that Samui is showing real signs of a sustainable recovery. “Our involvement has come on the back of client´s needs,” he said.
“Sophisticated international investors demand quality representation on the ground and, more importantly, they recognize the need for pro-active marketing overseas. Larger brands will begin to pull investors away from non-branded products and experienced, regional sales teams like ours offer a more co-ordinated marketing and PR strategy to target suitable clients. Particularly at the higher end.”
This shift will also mean a more stable, reliable property market on Samui, with high value completed properties slowly taking over from off-plan sales, and professional management contracts providing buyers with guaranteed yields. Companies like Dhevatara Properties, with three luxury developments in separate locations, all constructed without the need for pre-sales, set a standard for others to follow. As a result of such projects, the island’s reputation for high-risk, high return investments may soon change.
“Many of the local agents that focused on land sales have been running on pilot lights for several months now,” says Collins. “These firms are likely to move into re-sales as the bigger brands take over.”
Another major company that’s keen to capitalize on the island’s new found global status is CB Richard Ellis, a firm that boasts over 350 offices in 58 countries worldwide and plans to add to this in September on Samui. Like Savills, CBRE will arrive with a branded product to represent, namely, W Samui, an integrated development with a hotel component and “W Residences,” which will offer a limited number of exclusive villas for sale, also to be managed under the W Hotel brand.
“What’s exciting on Samui is that, until now, there have been no real brand investments.” says Charlotte Filleul, General Manager of Resort Properties. “The island is going through the same stages seen in most resort destinations, moving from a straight tourism market to a retirement and residential location. W Residences, and other products like it will improve quality through competition.”
Despite its global reach, CBRE still sees the initial client base for Samui projects coming from regional destinations like Hong Kong and Singapore. However, Filleul believes the market is expanding rapidly to attract other international investors from places like Europe and the US, and that these buyers will demand high quality services. “CBRE has the experience and resources to advise people on how to negotiate unfamiliar territory,” she said. “This will be a key factor as stronger marketing draws more investors from outside Asia.”
Obviously, in the current political climate, issues such as ownership and legal structures are particularly important when investing in Thailand and the larger agencies have the experience and contacts to keep in touch with the situation and advise their clients accordingly. “The arrival of established brands can only create better services,” said Filleul. “There’s still plenty of room for improvement on Samui and even the local agents appreciate the need for a more international approach.”
But it’s not only property agents that are keen to take advantage of Samui’s enduring appeal. Major developers are also looking to get a foothold in the island’s predicted recovery. Individual investors spearheaded the initial boom, which is one reason why Samui now enjoys unique opportunities for high-end villa rentals, but there were very few large-scale developers prepared to risk anything beyond small, gated communities and those that did so worked exclusively off-plan.
The above-mentioned Dhevatara Properties was the first company to challenge this approach, marketing completed properties direct to clients in the West. Now, other large firms like Raimon Land, one of Thailand’s biggest luxury residential property developers, are also planning to invest on the island. “Samui is a niche market that offers something different,” says Henri Young, the firm’s marketing manager. “We have two large sites currently under due diligence with a view to developing branded condominium projects. There are very few condo developments on the island at present, and local developers are less keen than before to build themselves, so now is a good time for us to invest.”
Despite a general shift toward the south of the island for many of the newer high-end villa projects, Raimon Land plan to build their projects closer to the airport and main tourist centres. Young believes that although peace and tranquility is an important factor for buyers, most people also appreciate proximity to major attractions and services. “The north coast offers a good combination of relative seclusion and easy access to the best restaurants, shopping and nightlife,” he said. “We are also looking at the area around Lamai Beach. The south of the island is certainly attractive, but this suits longer term projects.”
Whatever the location, experts like Young believe it is essential to market Samui’s uniqueness internationally and also to match that with products that are distinct from those found in other destinations. Like many of his counterparts, he is not concerned by recent bad press and sees events like the popular Samui Regatta and plans for a second golf course as a positive indication that the island will attract increasingly high net worth clients. Although it is unlikely that developers like Raimon Land will treat the island as a primary market, their involvement will certainly mean a further increase in branded, quality developments.
So what does this mean for the island’s existing property companies? The more established firms will certainly look to become involved in the brand revolution, while others may switch to focus more on resale and rental services. John Birt heads up Samui Villas and Homes, perhaps the island’s most established sales, development and villa rental agency, and one of the few Samui companies that is actually expanding beyond the island’s shores to Phuket. He worked with most of the big name developers and agents before setting up shop on the island, and does not see their arrival as a threat. “Brands will obviously benefit Samui in terms of global reputation,” he said, “but beyond specific projects, I’m not sure there’s enough product to justify large agencies establishing themselves here. Resort properties offer comfort for investors, but it should also be remembered that in Thailand, management and service contracts are only valid as long as the owners remain the same. Several large resort brands have changed hands in recent years, this is certainly worth bearing in mind.”
Such concerns have to be addressed if Koh Samui is to shake off its reputation as a high-risk investment option and become a global brand destination. Corporate investment will certainly add value as the island bids to become a branded residential destination. However, practical considerations such as infrastructure improvements and legal clarity will also come under increasing scrutiny as the major players move in to stake their claim.
Asia Properties rides property boom
Asia Properties rides property boom
Advertisement
"API is pleased to be participating in the Asian property investment boom that is currently underway," said Asia Properties CEO Daniel McKinney. On July 18, 2007 Ryan Chittum, writing in The Wall Street Journal, quoted Jones Lang LaSalle, a Chicago based global commercial real estate firm, and stated that investment in the Asia-Pacific region was up 15% to US$55 billion in the first six months of this year from US$48 billion in the year-earlier period. With growth in the region strong and interest rates low, Jones Lang LaSalle sees investment interest in Asian properties remaining strong in the year´s second half. As a result, McKinney added: "Asia Properties remains bullish and plans an aggressive acquisition program in Philippines resort sites over the next 6-12 months."
API is currently negotiating to acquire the majority of a tropical island and create a new tourist destination with four, five and six star resorts with major international hotel brands managing the resorts. Our planned acquisition in the Philippines, if successful, will be the largest investment and single most important transaction in the history of API.
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"API is pleased to be participating in the Asian property investment boom that is currently underway," said Asia Properties CEO Daniel McKinney. On July 18, 2007 Ryan Chittum, writing in The Wall Street Journal, quoted Jones Lang LaSalle, a Chicago based global commercial real estate firm, and stated that investment in the Asia-Pacific region was up 15% to US$55 billion in the first six months of this year from US$48 billion in the year-earlier period. With growth in the region strong and interest rates low, Jones Lang LaSalle sees investment interest in Asian properties remaining strong in the year´s second half. As a result, McKinney added: "Asia Properties remains bullish and plans an aggressive acquisition program in Philippines resort sites over the next 6-12 months."
API is currently negotiating to acquire the majority of a tropical island and create a new tourist destination with four, five and six star resorts with major international hotel brands managing the resorts. Our planned acquisition in the Philippines, if successful, will be the largest investment and single most important transaction in the history of API.
Monday, July 2, 2007
Malaysia to be made property hub
Malaysia to be made property hub
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RM50mil grant each from Govt and private sector for promos
By YAP LENG KUEN
THE Government, through one of its public/private sector initiatives, will be rolling out plans to make Malaysia an international property destination.
Datuk Seri Effendi Norwawi, Minister in the Prime Minister's Department, told StarBiz: “The idea is to make Malaysia a destination for foreigners to buy properties. Property prices here are so much cheaper than in places such as London and Singapore. We should show that we have real value for money.''
A matching grant of RM50mil each between the Government and private sector is likely to be introduced for international promotions.
“We should go out to the world with our best projects,'' he said. “In this respect, we are careful with the kind of properties and developers we promote.
A bungalow in Mont Kiara. Property prices here are so much cheaper than in places such as London and Singapore
“We do not want cases where investors buy properties they are not satisfied with, as these will give us a bad reputation. Self-regulation is important to maintain our image,'' he stressed.
Under the plan which is expected to be implemented soon, Malaysia's premier properties will be showcased at exhibitions overseas, with targeted markets in the Middle East, South Korea and Japan.
“We've been having dialogues with Fiabci and the Real Estate Housing Developers Association (Rehda) on the ways to reform the property sector,'' he said.
The Government has taken heed to the recommendations from the private sector and liberalised many areas in the property sector, the latest being the waiver on real property gains tax. “We are now ready to take on the challenge worldwide,'' Effendi said.
The Government's international marketing plan will be coordinated with Fiabci and Rehda.
Among others, real estate agents will be the ambassadors to tell the Malaysian property story. In this respect, their skills and professionalism will be further enhanced to ensure that the message gets across effectively and foreign investors are impressed.
“Our integrated efforts will include pushing the Malaysia My Second Home programme as well as health and ecotourism. There will be no more excuses this time,'' he said.
“We talk to Rehda and have a wonderful working relationship with them. They have brought many of the issues to the National Implementation Taskforce and we have freed all the restrictions.
“We are optimistic that this plan will work because many of our properties are so undervalued,'' he said.
However, he is aware that the speculative element would be something to watch out for. “We ought to be watching this carefully and be prepared to deal with it.
“But our main priority now is to get the promotions going. There is still quite a large property overhang and we have to release it,'' he said.
The first batch of properties to be showcased will probably be those located in the Klang Valley, followed by those in the Iskandar Development Region and Penang.
Digg this story Add to your del.icio.us account
RM50mil grant each from Govt and private sector for promos
By YAP LENG KUEN
THE Government, through one of its public/private sector initiatives, will be rolling out plans to make Malaysia an international property destination.
Datuk Seri Effendi Norwawi, Minister in the Prime Minister's Department, told StarBiz: “The idea is to make Malaysia a destination for foreigners to buy properties. Property prices here are so much cheaper than in places such as London and Singapore. We should show that we have real value for money.''
A matching grant of RM50mil each between the Government and private sector is likely to be introduced for international promotions.
“We should go out to the world with our best projects,'' he said. “In this respect, we are careful with the kind of properties and developers we promote.
A bungalow in Mont Kiara. Property prices here are so much cheaper than in places such as London and Singapore
“We do not want cases where investors buy properties they are not satisfied with, as these will give us a bad reputation. Self-regulation is important to maintain our image,'' he stressed.
Under the plan which is expected to be implemented soon, Malaysia's premier properties will be showcased at exhibitions overseas, with targeted markets in the Middle East, South Korea and Japan.
“We've been having dialogues with Fiabci and the Real Estate Housing Developers Association (Rehda) on the ways to reform the property sector,'' he said.
The Government has taken heed to the recommendations from the private sector and liberalised many areas in the property sector, the latest being the waiver on real property gains tax. “We are now ready to take on the challenge worldwide,'' Effendi said.
The Government's international marketing plan will be coordinated with Fiabci and Rehda.
Among others, real estate agents will be the ambassadors to tell the Malaysian property story. In this respect, their skills and professionalism will be further enhanced to ensure that the message gets across effectively and foreign investors are impressed.
“Our integrated efforts will include pushing the Malaysia My Second Home programme as well as health and ecotourism. There will be no more excuses this time,'' he said.
“We talk to Rehda and have a wonderful working relationship with them. They have brought many of the issues to the National Implementation Taskforce and we have freed all the restrictions.
“We are optimistic that this plan will work because many of our properties are so undervalued,'' he said.
However, he is aware that the speculative element would be something to watch out for. “We ought to be watching this carefully and be prepared to deal with it.
“But our main priority now is to get the promotions going. There is still quite a large property overhang and we have to release it,'' he said.
The first batch of properties to be showcased will probably be those located in the Klang Valley, followed by those in the Iskandar Development Region and Penang.
Friday, June 29, 2007
Real EstatePhilippine Star Online - Within the next
Real EstatePhilippine Star Online - Within the next
Real Estate
Philippine Star Online - Within the next five years, over 9,000 residential condominium units spread in at least 28 high-rise buildings will become available in Bonifacio Global City indicating the status of the 240 hectare business district as a fast-rising urban center. In
Source: www.philstar.com
Denver commercial real estate market on solid ground
Rocky Mountain News - The booming Denver commercial real estate is "as good as it gets," Sherman Miller, head of Cushman & Wakefield's Denver office said today, before brokers discussed investment, industrial, office, apartment and california estate fresno real retail markets. The industrial market
Source: www.rockymountainnews.com
Singapore poised to take lead Reits role
Times Online - Singapore is positioning itself as a global centre for trading in real estate investment trusts (Reits), tapping the Asian appetite for property risk. In its attempts to outclass Tokyo and california estate fresno real Hong Kong, the Singapore exchange is expected to pursue
Source: business.timesonline.co.uk
Limited Ownership Opportunities Newly Available at Raffles St. Lucia
Forbes - ST. LUCIA, West Indies, June 28 /PRNewswire/ -- Globally renowned Raffles Hotels & Resorts has announced the introduction of a limited Founder's Program at its newest Caribbean resort: Raffles St. Lucia, West Indies. Elegantly appointed estate
Source: www.forbes.com
In Pictures: Most Resilient U.S. Real Estate Markets
Forbes - When it comes to real estate, the questions on everyone's lips are: How low is low, and california estate fresno real when's the perfect time to buy back in? Of the largest metros still experiencing a slowdown, these are projections of when and california estate fresno real how those areas will recover. Data
Source: www.forbes.com
Free Mortgage Pre-Approval Letter For Victorville Real Estate Buyers
PR Inside - 2007-06-28 16:17:58 - Your search for Victorville CA real estate should start by obtaining a free mortgage loan pre-approval letter. California realtors treat you as a qualified buyer and california estate fresno real you know your maximum home loan amount Your Victorville CA
Source: www.pr-inside.com
Fitch Rates Resource Real Estate Funding CDO 2007-1, Ltd./LLC
Forbes - Fitch assigns the following ratings to Resource Real Estate Funding CDO 2007-1, Ltd. and california estate fresno real Resource Real Estate Funding CDO 2007-1, LLC (collectively, the co-issuers): --$180,000,000 class A-1 floating-rate secured notes due 2046 'AAA'; --$50,000,000
Source: www.forbes.com
BIZ WIZ'S $1.6M IN UNREAL ESTATE
New York Post - She promised to flip them a house. Instead, Manhattan prosecutors say, she flipped them the bird. Jennifer Wilkov, a former financial adviser for American Express, pleaded not guilty yesterday to allegedly tricking some two dozen New York-area
Source: www.nypost.com
L. Merion estate to be kept intact
Philadelphia Inquirer - Under its current zoning, Glenmede could have been the site of as many as 13 houses. The seller, Bryn Mawr College, has been using the site for student housing, but it's too far from campus. Fast action by the conservation community has spared a Main
Source: www.philly.com
Real Estate
Philippine Star Online - Within the next five years, over 9,000 residential condominium units spread in at least 28 high-rise buildings will become available in Bonifacio Global City indicating the status of the 240 hectare business district as a fast-rising urban center. In
Source: www.philstar.com
Denver commercial real estate market on solid ground
Rocky Mountain News - The booming Denver commercial real estate is "as good as it gets," Sherman Miller, head of Cushman & Wakefield's Denver office said today, before brokers discussed investment, industrial, office, apartment and california estate fresno real retail markets. The industrial market
Source: www.rockymountainnews.com
Singapore poised to take lead Reits role
Times Online - Singapore is positioning itself as a global centre for trading in real estate investment trusts (Reits), tapping the Asian appetite for property risk. In its attempts to outclass Tokyo and california estate fresno real Hong Kong, the Singapore exchange is expected to pursue
Source: business.timesonline.co.uk
Limited Ownership Opportunities Newly Available at Raffles St. Lucia
Forbes - ST. LUCIA, West Indies, June 28 /PRNewswire/ -- Globally renowned Raffles Hotels & Resorts has announced the introduction of a limited Founder's Program at its newest Caribbean resort: Raffles St. Lucia, West Indies. Elegantly appointed estate
Source: www.forbes.com
In Pictures: Most Resilient U.S. Real Estate Markets
Forbes - When it comes to real estate, the questions on everyone's lips are: How low is low, and california estate fresno real when's the perfect time to buy back in? Of the largest metros still experiencing a slowdown, these are projections of when and california estate fresno real how those areas will recover. Data
Source: www.forbes.com
Free Mortgage Pre-Approval Letter For Victorville Real Estate Buyers
PR Inside - 2007-06-28 16:17:58 - Your search for Victorville CA real estate should start by obtaining a free mortgage loan pre-approval letter. California realtors treat you as a qualified buyer and california estate fresno real you know your maximum home loan amount Your Victorville CA
Source: www.pr-inside.com
Fitch Rates Resource Real Estate Funding CDO 2007-1, Ltd./LLC
Forbes - Fitch assigns the following ratings to Resource Real Estate Funding CDO 2007-1, Ltd. and california estate fresno real Resource Real Estate Funding CDO 2007-1, LLC (collectively, the co-issuers): --$180,000,000 class A-1 floating-rate secured notes due 2046 'AAA'; --$50,000,000
Source: www.forbes.com
BIZ WIZ'S $1.6M IN UNREAL ESTATE
New York Post - She promised to flip them a house. Instead, Manhattan prosecutors say, she flipped them the bird. Jennifer Wilkov, a former financial adviser for American Express, pleaded not guilty yesterday to allegedly tricking some two dozen New York-area
Source: www.nypost.com
L. Merion estate to be kept intact
Philadelphia Inquirer - Under its current zoning, Glenmede could have been the site of as many as 13 houses. The seller, Bryn Mawr College, has been using the site for student housing, but it's too far from campus. Fast action by the conservation community has spared a Main
Source: www.philly.com
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