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Q3 2010 | CONDOMINIUM




THAILAND

BANGKOK CONDOMINIUM MARKET
REPORT



                                            Bangkok Condominium Market
                                            EXECUTIVE SUMMARY
                                            New launches in Q3 2010 increased dramatically compared to the previous quarter as delayed
                                            launches were resumed after the unfavourable conditions for most of Q2 2010.

                                            Only 1,900 units were supplied in Q3 2010 after the ending of the tax incentives, however it is
                                            forecast that up to 23,000 could be supplied in Q4 2010.

                                            Developers are shifting focus towards urban Bangkok as more units will be supplied in the urban
                  MARKET INDICATORS         area. Suburban Bangkok still remains rmly on the radar with listed developers targeting the low
                                            to mid end segment of the market. For the whole of Bangkok 75% of units were launched by listed
                               Q2-Q3 2010
                                            developers in Q3.
                     SUPPLY
                                            The luxury market has remained resilient throughout the year and launches in Q3 2010 were
                  LAUNCHES                  particularly strong.

                      PRICES

                     TAKE-UP




      OCCUPANCY




www.colliers.co.th
BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010


NEW CONDOMINIUM LAUNCHES REACH RECORD HIGHS

                                NEWLY LAUNCHED CONDOMINIUM UNITS DURING THE YEAR 2009 – Q3 2010 BY QUARTER




                                                         Source: Colliers International Thailand Research


Newly launched units in the third quarter of 2010 increased over ve fold       in Q3 which partially accounts for the surge. However the overall outlook
from Q2 2010 and represented a 63% increase on the robust Q1 2010              of developers remains bullish in tapping into latent demand despite the
  gure. Nearly 23,600 units were launched in Q3 2010. Many launches            sporadic travails a icting the country.
were put on hold due to the events of April/May and these recommenced




COLLIERS INTERNATIONAL | P. 2
BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010


ZONING




                          COLLIERS INTERNATIONAL | P. 3
BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010


CITY AREA

The area covers four adjacent but competing sub-markets: the Sukhumvit       Road; the Silom / Sathorn section; and the Riverside section fronting the
section comprising Sukhumvit Road between Soi 1 and Soi 55 to the            Chaophraya River along Charoenkrung Road and Charoennakorn Road,
north and Soi 2 and Soi 38 to the south; the Central Lumpini section         where several ve-star hotels are located. The City Area is convenient
including Phloen Chit Road, Rama I Road, Soi Langsuan, Soi Sarasin,          for businessmen, expatriates and tourists, because of its proximity to
Chitlom Road Ratchadamri Road, Witthayu Road and Rachaprasong                many o ce buildings, retailing and local attractions.


CITY FRINGE AREA

This area covers three parts of Bangkok:

o Northern Fringe: This section covers the BTS route starting from           o Eastern Fringe: This section covers the BTS route starting from Thong
Ratchathewi Station to Mo Chit Station to the north and the MRT route        Lor Station to On Nut Station to the east, Rama IV Road and Petchaburi
starting from Petchaburi station to Bangsue station to the north.            Road,

o Southern Fringe: This section covers Narathiwad Ratchanakarin Road,        This area covers locations with their own local infrastructure and
Chan Road, Sathupradit Road, Charoenkrung Road and Rama III Road             convenient transportation but require commuting to have access to the
along the Chaophraya River.                                                  central business and entertainment areas.


OUTER CITY AREA

The area covers two parts of Bangkok:

o Outer City (East): This section starts from the extension of the BTS       Krung Thonburi Road to Ratchaphruek Road near Petchakasem
route at On Nut Station to the Bangkok boundary to the east.                 intersection.

o Outer City (West): This section starts from the extension of the BTS
route at Taksin Station to Bang Wa station which includes the area from


SUBURBAN BANGKOK

These are the environs outside the areas already mentioned. Expansion        of new condominiums in this area. Suburban Bangkok represents the
of the mass transit system is the main determinant for increasing future     biggest area and for the purposes of this report includes Bangkok city old
supply in a particular area. The expansion from On - Nut to Samut            town (Koh Rattanakosin area and boundary area). This location has
Prakarn is scheduled to be completed in 2011. The expansion of the BTS       comprehensive town planning controls restricting building height, so
will bene t directly the surrounding condominiums, as it will considerably   there are no condominium projects in the area.
reduce transportation costs and time. This will encourage the development




COLLIERS INTERNATIONAL | P. 4
BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010


                                          NEWLY LAUNCHED CONDOMINIUM UNITS IN Q3 2010 BY LOCATION




                                                          Source: Colliers International Thailand Research



The majority of launches in Q3 2010 occurred in the urban area compared       The largest project in this quarter, The Trust Residence Pinklao by The
to suburban Bangkok. The suburbs have dominated supply but now the            Con dence Co., Ltd., was launched in the suburban Bangkok area with a
urban areas are proving more popular.                                         total of 1,399 units. However, the listed companies (including their
                                                                              subsidiary companies) continued to lead the market with approximately
Within urban Bangkok, the Northern Fringe area has shown the highest          17,000 units or 75% of the total in Bangkok.
numbers with approximately 4,300 units. Nearly 52% of the total units
were launched in September.



               A COMPARISON OF NEWLY LAUNCHED UNIT BY LISTED COMPANY AND NON LISTED COMPANY DURING Q1 2009 - Q3 2010




                                                          Source: Colliers International Thailand Research



Listed developers continue to take up the lion’s share of newly launched      such as Sansiri and Quality Houses, have now entered the market for
units and for Q3 2010 this has become more pronounced. Larger                 units below two million baht that have become all the rage.
developers who previously focused on more mid to higher end projects




                                                                                                             COLLIERS INTERNATIONAL | P. 5
BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010


                                     NEWLY LAUNCHED CONDOMINIUM UNITS IN CITY AREA, Q1 2009 – Q3 2010




                                                         Source: Colliers International Thailand Research



More than 2,500 units were launched in the City Area for Q3 which             consequence of the protests which began in February 2010 but was
shows that the surge has also taken place in prime areas where land is        ratcheted up in April.
more expensive. The limited number of launches prior that was a direct


                              NEWLY LAUNCHED CONDOMINIUM UNITS IN NORTHERN FRINGE AREA, Q1 2009 – Q3 2010




                                                     Source: Colliers International Thailand Research


Although the political protest was in the City area, it impacted other        during the protests. Newly launched condominium units in the Northern
areas too in Q2 due to buyer sentiment and transportation problems            Fringe area dramatically increased to more than 4,300 units.




COLLIERS INTERNATIONAL | P. 6
BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010


HISTORICAL SUPPLY

                                                               ADDITIONAL SUPPLY BY QUARTER




                                                     Source : Department of Land, Colliers International Thailand Research
                                           Remark : The number of units does not include projects from the National Housing Authority


Only approximately 1,900 new condominium units were completed and                   condominium units scheduled to be completed in Q4 2010 could be
registered at the Department of Land in Q3 2010 despite the continuation            nearly 25,000 units. Whether a signi cant proportion reaches the
of some of the incentives. However the rush to beat the previous deadline           scheduled completion deadline of 2010 remains to be seen.
in Q2 for incentives was largely the cause for this fall. Overall there was
a drop of about 44% from the previous quarter. However total


                                                   TOTAL HISTORICAL SUPPLY BY LOCATION TO Q3 2010




                                                     Source : Department of Land, Colliers International Thailand Research


Around 67% of total condominium units are located in the suburban                   the centre, mass transit connections and relatively lower land prices
Bangkok area with a total of more than 186,000 units. Within the urban              compared to the City area.
area, the Northern Fringe contains the most units due to its proximity to


                                                                                                                             COLLIERS INTERNATIONAL | P. 7
BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010


                                         ADDITIONAL SUPPLY PER QUARTER | CITY AREA, Q1 2009 – Q3 2010




                                                          Source: Colliers International Thailand Research



Only 65 units was added in Q3 2010, so total supply in this area was           completed in the last quarter of this year.
approximately 21,700 units. Roughly 3,600 units are scheduled to be



                                  ADDITIONAL SUPPLY PER QUARTER | NORTHERN FRINGE AREA, Q1 2009 – Q3 2010




                                                      Source: Colliers International Thailand Research


Approximately 250 units were added in Q3 2010, although almost 8,500           near future, especially Phahonyothin, Ratchadapisek, Ari and Sutthisan
units are under construction and scheduled to be completed in this year.       Road. The Northern Fringe contains a signi cant number of BTS and
This area still remains the main target for condominium projects in the        MRT stations, the key public transportation arteries in Bangkok.




COLLIERS INTERNATIONAL | P. 8
BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010


FUTURE SUPPLY

                           CUMULATIVE FUTURE SUPPLY SCHEDULED TO BE COMPLETED DURING THE YEAR 2010 – 2013
                                                BY LOCATION IN URBAN BANGKOK. (AS OF Q3 2010)




                                                        Source : Colliers International Thailand Research
                                                    Remark : Supply does not included unit in Suburban Bangkok


The Northern Fringe area continues to be the main player in urban            is expected that the Northern Fringe will continue to dominate supply for
Bangkok with approximately 8,450 scheduled to be completed in the last       the early part of the decade.
quarter of 2010 and some projects delayed from the second quarter. It




                                                                                                                 COLLIERS INTERNATIONAL | P. 9
BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010


TAKE UP

                                      SALES PROPORTION OF NEWLY LAUNCHED UNITS IN Q3 2010 BY LOCATION




                                                          Source: Colliers International Thailand Research


The take up rate for condominium projects in Bangkok for Q3 was                 popular with buyers. The prime location of the City area accounts for the
approximately 51 %. The occupancy rate in the Northern Fringe area              high take up there and the a ordability of suburban Bangkok to mostly
was the highest followed by the City area and suburban Bangkok area.             rst time buyers is the main reason behind its popularity. It must be
Various factors account for this; the fact that many of the Northern            pointed out that over half of the units were launched in September, and
Fringe launches are close to mass transit lines means that they are very        as the last month in the quarter this would generate a lower gure.


                                     SALES PROPORTION OF NEWLY LAUNCHED UNITS IN BANGKOK BY QUARTER




                                                          Source: Colliers International Thailand Research



The lesser gure for Q3 2010 indicates how buying patterns of                    rates. While there have been murmurs that the market is beginning to
condominiums are changing. In the past with the advent of small size            seize up, the more realistic answer is that buyers are taking their time
unit developments, buyers would snap them up within hours of the                and shopping around before making a purchase. The euphoria of the
o cial launch in an ‘until stocks last’ frenzied atmosphere. Nowadays as        surge in buying activity in Q4 2009 to Q2 2010 is starting to become a
more and more of these types of products are being launched, take up            thing of the past but not the demand for a ordable units. Developers will
has been slower with similar projects now recording lower initial take up       need to work that bit harder but the rewards are still there.




COLLIERS INTERNATIONAL | P. 10
BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010


LAUNCHES WITH HIGH TAKE UP RATES IN Q3 2010



D Condo by Sansiri Plc. has shown the highest take up rate of almost
100% of its 916 units with a selling price of approximately 1 million
baht. Only 29 sq m studio units were available and the project is
located on On Nut – Latkrabang Road.




                                                                        Noble Revent by Noble Development Plc. had its 261 units sold out in
                                                                        one day. Noble Revent is located in a prime area, close to BTS
                                                                        Phayathai Station and Airport link. Most units are one bedroom with
                                                                        the smallest being about 33 sq m.




                                                                        LPN Development Plc. still continues to be the main player in the
                                                                        market, Lumpini Place Rama 9 – Ratchada phase 2 sold out its units
                                                                        within a few hours. Unit sizes start from 33.5 sq m for one bedroom
                                                                        and 70 sq m for two bedroom units. The project is located on Rama 9
                                                                        Road.




In the City area VIA 49 by Sansiri has shown the highest take up rate
with only 85 units with a selling price of more than 140,000 baht per
sq m. Unit sizes start from 35 sq m for one bedroom units and the
project is located between Thong Lor and Phrom Phong.




                                                                                                      COLLIERS INTERNATIONAL | P. 11
BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010


                                         TAKE UP IN PROXIMITY TO EXISTING MASS TRANSIT LINES Q3 2010




                                                         Source: Colliers International Thailand Research


The take up rate of condominium projects less than 200 meters from              located more than 1,000 meters from mass transit lines showed the
BTS / MRT lines was still the highest at nearly 70%, followed by the            lowest rate of around 43%.
projects 501 – 1,000 meters from the BTS / MRT at 59%. The projects



                   THE AVERAGE TAKE UP RATE OF NEWLY LAUNCHED UNITS DURING Q1 - Q3 2010 BY DISTANCE FROM BTS / MRT




                                                       Source : Colliers International Thailand Research


The average take up rate of condominium units in the rst three quarters         prices being similar or a little lower than the those of projects less than
of 2010 shows that those developments located within 200 metres of a            200 meters from the BTS / MRT but the additional distance means more
mass transit station remain popular with buyers. The take up rate in the        likelihood of requiring a motorbike or taxi to a station, thus reducing their
area 201 – 500 meters from mass transit is lowest, due to the selling           appeal to buyers.




COLLIERS INTERNATIONAL | P. 12
BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010


INITIAL LAUNCH PRICES

                   AVERAGE SELLING PRICES OF NEWLY LAUNCHED PROJECTS IN CITY AND CITY FRINGE AREA H12010 – Q3 2010




                                                       Source: Colliers International Thailand Research


Note: Q2 2010 only 1 – 2 projects were launched in each location, the          Eastern Fringe area jumped by around 43% although this was primarily
selling prices may not be realistic, so the rst and second quarters of         due to many projects being launched by listed developers who can
2010 have been included together for a more reliable assessment.               command a premium due to their reputation and generally better
                                                                                 nancing options. City area prices have fallen due to the less desirable
Selling prices remain robust during the third quarter as developers            locations of projects away from the main roads.
squeeze prices by reducing unit sizes to tap into demand. Prices in the


           AVERAGE SELLING PRICES OF NEWLY LAUNCHED PROJECTS IN OUTER CITY AND SUBURBAN BANGKOK AREA H1 2001 – Q3 2010




                                                       Source: Colliers International Thailand Research


Note: Q2 2010 only 1 – 2 projects were launched in each location, the          area due to the extension of the BTS Silom line into Thonburi. Prices
selling prices may not be realistic, so the rst and second quarters of         over this time have re ected this fact. However the area is limited in size
2010 have been included together for a more reliable assessment.               and prime land plots are now in short supply, recent launches include
                                                                               locations further from the BTS stations thus accounting for the lower
Since 2006 big name developers, such as Sansiri, Quality Houses, TCC           selling price in Q3. The increase in Suburban Bangkok was due to the
Capital Land, Ananda Development, Narai Property and Land & Houses             increased involvement of listed developers.
have started to develop condominium projects in the Outer City – West


                                                                                                               COLLIERS INTERNATIONAL | P. 13
BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010


                                      AVERAGE SELLING PRICE OF NEWLY LAUNCHED PROJECTS IN Q3 2010




                                                        Source: Colliers International Thailand Research


The City area remains the prime location and can command higher                Fringe prices. The perception of the Southern Fringe area as an upmarket
prices. The lure of Sukhumvit road, with its own self contained                location still prevails with some developers despite the lack of mass
environment and mass transit connections continues to propel Eastern           transit lines, except the recent Bus Rapid Transit.


LAUNCH PRICES: MASS TRANSIT EFFECT


                SELLING PRICES OF NEWLY LAUNCHED PROJECTS BY PROXIMITY TO MASS TRANSIT LINES (BTS AND MRT), Q3 2010




                                                      Source : Colliers International Thailand Research


Projects located within a couple of hundred metres from a mass transit         from mass transit. The area is arguably the only fashionable, up market
station still command a premium. The location of Thong Lor goes some           location that is for the most part some distance from the BTS or MRT
way to explain the high prices of developments further than 500 meters         although some are now located closer to the new Airport Link.


COLLIERS INTERNATIONAL | P. 14
BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010


TRENDS – LISTED DEVELOPERS ARE FOCUSING                               MORE IN THE SUBURBAN BANGKOK AREA

In 2009 listed developers accounted for 12,000 condominium units                     focus on the growth in the lower – mid range market and most of these
launched in suburban Bangkok area but in the rst three quarters of                   are located in the suburban Bangkok area due to lower land prices. For
2010 more than 15,500 units were launched representing an increase of                Q4 2010 Sansiri Plc, Land & Houses Plc and Quality Houses Plc plan to
29%. This was the result of listed companies setting up new brands to                launch more condominium projects in the suburban Bangkok area.


DEMAND DRIVER – FUTURE GROWTH OF BANGKOK


                             ACTUAL AND ESTIMATED ADDITION OF POPULATION IN BANGKOK FOR EACH 5 YEAR PERIOD




                                                               Source: Colliers International Thailand Research
                                     Source: Population Division of the Department of Economic and Social A airs of the United Nations



Urbanisation is a key trend in industrializing countries around the world            and Laos also have an e ect. In the next ve years the population is
and Thailand is no exception. The lure of better economic prospects                  estimated to grow by 423,000 and obviously these people must live
leads thousands to leave the provinces in search of a better life and the            somewhere. While this is likely to require low end housing this will have
commercial centre attracts the lion share of this internal migration. Also           a spill over e ect on mid to high end housing as the population bene ts
movements of migrants from the neighbouring countries of Myanmar                     from economic growth created by the increase in population.




                                                                                                                            COLLIERS INTERNATIONAL | P. 15
BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010


FINANCING

                                HOUSING LOANS FOR PERSONAL CONSUMPTION EXTENDED BY FINANCIAL INSTITUTIONS




                                                      Colliers International Thailand Research Source : Bank of Thailand
                                                      Note: Excludes negligible amounts of nancing from other sources



Financing of residential real estate is both a source of growth and a                compared to specialized nance institutions such as the Government
product of it but the availability of nance is vital to supporting the sector.       Housing Bank which continues to provide the foundation. It would appear
For every quarter from 2008 nancing has been on the rise and                         that even for lower end products commercial banks are willing to provide
commercial banks have increasingly become the more dominant players                   nance.

THE LUXURY CONDOMINIUM MARKET

                                          LUXURY CONDOMINIUM UNITS LAUNCHED DURING Q1 2009 – Q3 2010




                                                           Source : Colliers International Thailand Research


Despite the interest generated by the launches of a ordable condominiums             215 units on Phayathai road, close to the Airport link Phayathai station
the luxury segment is also experiencing healthy growth. In fact,                     and 161 units of M Silom on Narathiwas Rajanakarin. Sansiri launched
approximately 670 units were launched in Q3 2010. From Q1 2009 – Q2                  VIA 49 on Sukhumvit road with only 85 units. Most buyers are Thai and
2010 most of the launches sold out within few weeks due to limited                   even in this market segment foreign demand is not the most critical
choices but the same has not been the case for Q3 2010 due to the                    factor in the success in a development.
amount of units. Major Development Plc introduced M Phayathai with

COLLIERS INTERNATIONAL | P. 16
BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010


FORECAST

The breakneck number of launches is set to slow over the next few
quarters but still remain robust as developers need to consolidate and
focus on construction and marketing of their existing projects.

Although take up has slowed the demand for low end, smaller unit size
condominiums below two million baht looks set to continue as these
appeal to lower income earners who constitute the vast majority of the
workforce in Bangkok. The danger is that the high level of launches
continues unabated thus swamping the market too quickly. However the
lower take up rates will have a sobering a ect on sentiment. In all
likelihood launches look set to moderate to sustainable levels and allow
the residential market to consolidate.

Changes in planning regulations in 2011 following the national census
could lead to more relaxed restrictions on the minimum number of car
parking spaces that must be included in a new development. As many
projects are located close to new mass transit lines, car ownership for
these buyers may be lower and developers can t in more residential
units at the expense of parking spaces.

In the long term the growth patterns of Bangkok’s residential market will
be shaped by the development of new mass transit lines. A ordability
will continue to drive the market although it is di cult to envision unit
sizes being reduced much further. Only when the high density
developments are completed can the standard of living for the occupiers
be assessed. Developers will be taking a keen interest when these recent
launches are nally supplied in order to make adjustments to future
projects.




                                                                                            COLLIERS INTERNATIONAL | P. 17
BANGKOK OFFICE MARKET REPORT | Q3 2010


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                                                      RESEARCHER:                                                 RESEARCHER:
                                                      Thailand                                                    Thailand
                                                      Antony Picon                                                Surachet Kongcheep
                                                      Senior Manager | Research                                   Manager | Research
                                                      EMAIL antony.picon@colliers.com                             EMAIL surachet.kongcheep@colliers.com



                                                      This report and other research materials may be found on our website at www.colliers.co.th. Questions related to
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Bangkok Condominium Report Q3 2010

  • 1. Q3 2010 | CONDOMINIUM THAILAND BANGKOK CONDOMINIUM MARKET REPORT Bangkok Condominium Market EXECUTIVE SUMMARY New launches in Q3 2010 increased dramatically compared to the previous quarter as delayed launches were resumed after the unfavourable conditions for most of Q2 2010. Only 1,900 units were supplied in Q3 2010 after the ending of the tax incentives, however it is forecast that up to 23,000 could be supplied in Q4 2010. Developers are shifting focus towards urban Bangkok as more units will be supplied in the urban MARKET INDICATORS area. Suburban Bangkok still remains rmly on the radar with listed developers targeting the low to mid end segment of the market. For the whole of Bangkok 75% of units were launched by listed Q2-Q3 2010 developers in Q3. SUPPLY The luxury market has remained resilient throughout the year and launches in Q3 2010 were LAUNCHES particularly strong. PRICES TAKE-UP OCCUPANCY www.colliers.co.th
  • 2. BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010 NEW CONDOMINIUM LAUNCHES REACH RECORD HIGHS NEWLY LAUNCHED CONDOMINIUM UNITS DURING THE YEAR 2009 – Q3 2010 BY QUARTER Source: Colliers International Thailand Research Newly launched units in the third quarter of 2010 increased over ve fold in Q3 which partially accounts for the surge. However the overall outlook from Q2 2010 and represented a 63% increase on the robust Q1 2010 of developers remains bullish in tapping into latent demand despite the gure. Nearly 23,600 units were launched in Q3 2010. Many launches sporadic travails a icting the country. were put on hold due to the events of April/May and these recommenced COLLIERS INTERNATIONAL | P. 2
  • 3. BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010 ZONING COLLIERS INTERNATIONAL | P. 3
  • 4. BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010 CITY AREA The area covers four adjacent but competing sub-markets: the Sukhumvit Road; the Silom / Sathorn section; and the Riverside section fronting the section comprising Sukhumvit Road between Soi 1 and Soi 55 to the Chaophraya River along Charoenkrung Road and Charoennakorn Road, north and Soi 2 and Soi 38 to the south; the Central Lumpini section where several ve-star hotels are located. The City Area is convenient including Phloen Chit Road, Rama I Road, Soi Langsuan, Soi Sarasin, for businessmen, expatriates and tourists, because of its proximity to Chitlom Road Ratchadamri Road, Witthayu Road and Rachaprasong many o ce buildings, retailing and local attractions. CITY FRINGE AREA This area covers three parts of Bangkok: o Northern Fringe: This section covers the BTS route starting from o Eastern Fringe: This section covers the BTS route starting from Thong Ratchathewi Station to Mo Chit Station to the north and the MRT route Lor Station to On Nut Station to the east, Rama IV Road and Petchaburi starting from Petchaburi station to Bangsue station to the north. Road, o Southern Fringe: This section covers Narathiwad Ratchanakarin Road, This area covers locations with their own local infrastructure and Chan Road, Sathupradit Road, Charoenkrung Road and Rama III Road convenient transportation but require commuting to have access to the along the Chaophraya River. central business and entertainment areas. OUTER CITY AREA The area covers two parts of Bangkok: o Outer City (East): This section starts from the extension of the BTS Krung Thonburi Road to Ratchaphruek Road near Petchakasem route at On Nut Station to the Bangkok boundary to the east. intersection. o Outer City (West): This section starts from the extension of the BTS route at Taksin Station to Bang Wa station which includes the area from SUBURBAN BANGKOK These are the environs outside the areas already mentioned. Expansion of new condominiums in this area. Suburban Bangkok represents the of the mass transit system is the main determinant for increasing future biggest area and for the purposes of this report includes Bangkok city old supply in a particular area. The expansion from On - Nut to Samut town (Koh Rattanakosin area and boundary area). This location has Prakarn is scheduled to be completed in 2011. The expansion of the BTS comprehensive town planning controls restricting building height, so will bene t directly the surrounding condominiums, as it will considerably there are no condominium projects in the area. reduce transportation costs and time. This will encourage the development COLLIERS INTERNATIONAL | P. 4
  • 5. BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010 NEWLY LAUNCHED CONDOMINIUM UNITS IN Q3 2010 BY LOCATION Source: Colliers International Thailand Research The majority of launches in Q3 2010 occurred in the urban area compared The largest project in this quarter, The Trust Residence Pinklao by The to suburban Bangkok. The suburbs have dominated supply but now the Con dence Co., Ltd., was launched in the suburban Bangkok area with a urban areas are proving more popular. total of 1,399 units. However, the listed companies (including their subsidiary companies) continued to lead the market with approximately Within urban Bangkok, the Northern Fringe area has shown the highest 17,000 units or 75% of the total in Bangkok. numbers with approximately 4,300 units. Nearly 52% of the total units were launched in September. A COMPARISON OF NEWLY LAUNCHED UNIT BY LISTED COMPANY AND NON LISTED COMPANY DURING Q1 2009 - Q3 2010 Source: Colliers International Thailand Research Listed developers continue to take up the lion’s share of newly launched such as Sansiri and Quality Houses, have now entered the market for units and for Q3 2010 this has become more pronounced. Larger units below two million baht that have become all the rage. developers who previously focused on more mid to higher end projects COLLIERS INTERNATIONAL | P. 5
  • 6. BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010 NEWLY LAUNCHED CONDOMINIUM UNITS IN CITY AREA, Q1 2009 – Q3 2010 Source: Colliers International Thailand Research More than 2,500 units were launched in the City Area for Q3 which consequence of the protests which began in February 2010 but was shows that the surge has also taken place in prime areas where land is ratcheted up in April. more expensive. The limited number of launches prior that was a direct NEWLY LAUNCHED CONDOMINIUM UNITS IN NORTHERN FRINGE AREA, Q1 2009 – Q3 2010 Source: Colliers International Thailand Research Although the political protest was in the City area, it impacted other during the protests. Newly launched condominium units in the Northern areas too in Q2 due to buyer sentiment and transportation problems Fringe area dramatically increased to more than 4,300 units. COLLIERS INTERNATIONAL | P. 6
  • 7. BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010 HISTORICAL SUPPLY ADDITIONAL SUPPLY BY QUARTER Source : Department of Land, Colliers International Thailand Research Remark : The number of units does not include projects from the National Housing Authority Only approximately 1,900 new condominium units were completed and condominium units scheduled to be completed in Q4 2010 could be registered at the Department of Land in Q3 2010 despite the continuation nearly 25,000 units. Whether a signi cant proportion reaches the of some of the incentives. However the rush to beat the previous deadline scheduled completion deadline of 2010 remains to be seen. in Q2 for incentives was largely the cause for this fall. Overall there was a drop of about 44% from the previous quarter. However total TOTAL HISTORICAL SUPPLY BY LOCATION TO Q3 2010 Source : Department of Land, Colliers International Thailand Research Around 67% of total condominium units are located in the suburban the centre, mass transit connections and relatively lower land prices Bangkok area with a total of more than 186,000 units. Within the urban compared to the City area. area, the Northern Fringe contains the most units due to its proximity to COLLIERS INTERNATIONAL | P. 7
  • 8. BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010 ADDITIONAL SUPPLY PER QUARTER | CITY AREA, Q1 2009 – Q3 2010 Source: Colliers International Thailand Research Only 65 units was added in Q3 2010, so total supply in this area was completed in the last quarter of this year. approximately 21,700 units. Roughly 3,600 units are scheduled to be ADDITIONAL SUPPLY PER QUARTER | NORTHERN FRINGE AREA, Q1 2009 – Q3 2010 Source: Colliers International Thailand Research Approximately 250 units were added in Q3 2010, although almost 8,500 near future, especially Phahonyothin, Ratchadapisek, Ari and Sutthisan units are under construction and scheduled to be completed in this year. Road. The Northern Fringe contains a signi cant number of BTS and This area still remains the main target for condominium projects in the MRT stations, the key public transportation arteries in Bangkok. COLLIERS INTERNATIONAL | P. 8
  • 9. BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010 FUTURE SUPPLY CUMULATIVE FUTURE SUPPLY SCHEDULED TO BE COMPLETED DURING THE YEAR 2010 – 2013 BY LOCATION IN URBAN BANGKOK. (AS OF Q3 2010) Source : Colliers International Thailand Research Remark : Supply does not included unit in Suburban Bangkok The Northern Fringe area continues to be the main player in urban is expected that the Northern Fringe will continue to dominate supply for Bangkok with approximately 8,450 scheduled to be completed in the last the early part of the decade. quarter of 2010 and some projects delayed from the second quarter. It COLLIERS INTERNATIONAL | P. 9
  • 10. BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010 TAKE UP SALES PROPORTION OF NEWLY LAUNCHED UNITS IN Q3 2010 BY LOCATION Source: Colliers International Thailand Research The take up rate for condominium projects in Bangkok for Q3 was popular with buyers. The prime location of the City area accounts for the approximately 51 %. The occupancy rate in the Northern Fringe area high take up there and the a ordability of suburban Bangkok to mostly was the highest followed by the City area and suburban Bangkok area. rst time buyers is the main reason behind its popularity. It must be Various factors account for this; the fact that many of the Northern pointed out that over half of the units were launched in September, and Fringe launches are close to mass transit lines means that they are very as the last month in the quarter this would generate a lower gure. SALES PROPORTION OF NEWLY LAUNCHED UNITS IN BANGKOK BY QUARTER Source: Colliers International Thailand Research The lesser gure for Q3 2010 indicates how buying patterns of rates. While there have been murmurs that the market is beginning to condominiums are changing. In the past with the advent of small size seize up, the more realistic answer is that buyers are taking their time unit developments, buyers would snap them up within hours of the and shopping around before making a purchase. The euphoria of the o cial launch in an ‘until stocks last’ frenzied atmosphere. Nowadays as surge in buying activity in Q4 2009 to Q2 2010 is starting to become a more and more of these types of products are being launched, take up thing of the past but not the demand for a ordable units. Developers will has been slower with similar projects now recording lower initial take up need to work that bit harder but the rewards are still there. COLLIERS INTERNATIONAL | P. 10
  • 11. BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010 LAUNCHES WITH HIGH TAKE UP RATES IN Q3 2010 D Condo by Sansiri Plc. has shown the highest take up rate of almost 100% of its 916 units with a selling price of approximately 1 million baht. Only 29 sq m studio units were available and the project is located on On Nut – Latkrabang Road. Noble Revent by Noble Development Plc. had its 261 units sold out in one day. Noble Revent is located in a prime area, close to BTS Phayathai Station and Airport link. Most units are one bedroom with the smallest being about 33 sq m. LPN Development Plc. still continues to be the main player in the market, Lumpini Place Rama 9 – Ratchada phase 2 sold out its units within a few hours. Unit sizes start from 33.5 sq m for one bedroom and 70 sq m for two bedroom units. The project is located on Rama 9 Road. In the City area VIA 49 by Sansiri has shown the highest take up rate with only 85 units with a selling price of more than 140,000 baht per sq m. Unit sizes start from 35 sq m for one bedroom units and the project is located between Thong Lor and Phrom Phong. COLLIERS INTERNATIONAL | P. 11
  • 12. BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010 TAKE UP IN PROXIMITY TO EXISTING MASS TRANSIT LINES Q3 2010 Source: Colliers International Thailand Research The take up rate of condominium projects less than 200 meters from located more than 1,000 meters from mass transit lines showed the BTS / MRT lines was still the highest at nearly 70%, followed by the lowest rate of around 43%. projects 501 – 1,000 meters from the BTS / MRT at 59%. The projects THE AVERAGE TAKE UP RATE OF NEWLY LAUNCHED UNITS DURING Q1 - Q3 2010 BY DISTANCE FROM BTS / MRT Source : Colliers International Thailand Research The average take up rate of condominium units in the rst three quarters prices being similar or a little lower than the those of projects less than of 2010 shows that those developments located within 200 metres of a 200 meters from the BTS / MRT but the additional distance means more mass transit station remain popular with buyers. The take up rate in the likelihood of requiring a motorbike or taxi to a station, thus reducing their area 201 – 500 meters from mass transit is lowest, due to the selling appeal to buyers. COLLIERS INTERNATIONAL | P. 12
  • 13. BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010 INITIAL LAUNCH PRICES AVERAGE SELLING PRICES OF NEWLY LAUNCHED PROJECTS IN CITY AND CITY FRINGE AREA H12010 – Q3 2010 Source: Colliers International Thailand Research Note: Q2 2010 only 1 – 2 projects were launched in each location, the Eastern Fringe area jumped by around 43% although this was primarily selling prices may not be realistic, so the rst and second quarters of due to many projects being launched by listed developers who can 2010 have been included together for a more reliable assessment. command a premium due to their reputation and generally better nancing options. City area prices have fallen due to the less desirable Selling prices remain robust during the third quarter as developers locations of projects away from the main roads. squeeze prices by reducing unit sizes to tap into demand. Prices in the AVERAGE SELLING PRICES OF NEWLY LAUNCHED PROJECTS IN OUTER CITY AND SUBURBAN BANGKOK AREA H1 2001 – Q3 2010 Source: Colliers International Thailand Research Note: Q2 2010 only 1 – 2 projects were launched in each location, the area due to the extension of the BTS Silom line into Thonburi. Prices selling prices may not be realistic, so the rst and second quarters of over this time have re ected this fact. However the area is limited in size 2010 have been included together for a more reliable assessment. and prime land plots are now in short supply, recent launches include locations further from the BTS stations thus accounting for the lower Since 2006 big name developers, such as Sansiri, Quality Houses, TCC selling price in Q3. The increase in Suburban Bangkok was due to the Capital Land, Ananda Development, Narai Property and Land & Houses increased involvement of listed developers. have started to develop condominium projects in the Outer City – West COLLIERS INTERNATIONAL | P. 13
  • 14. BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010 AVERAGE SELLING PRICE OF NEWLY LAUNCHED PROJECTS IN Q3 2010 Source: Colliers International Thailand Research The City area remains the prime location and can command higher Fringe prices. The perception of the Southern Fringe area as an upmarket prices. The lure of Sukhumvit road, with its own self contained location still prevails with some developers despite the lack of mass environment and mass transit connections continues to propel Eastern transit lines, except the recent Bus Rapid Transit. LAUNCH PRICES: MASS TRANSIT EFFECT SELLING PRICES OF NEWLY LAUNCHED PROJECTS BY PROXIMITY TO MASS TRANSIT LINES (BTS AND MRT), Q3 2010 Source : Colliers International Thailand Research Projects located within a couple of hundred metres from a mass transit from mass transit. The area is arguably the only fashionable, up market station still command a premium. The location of Thong Lor goes some location that is for the most part some distance from the BTS or MRT way to explain the high prices of developments further than 500 meters although some are now located closer to the new Airport Link. COLLIERS INTERNATIONAL | P. 14
  • 15. BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010 TRENDS – LISTED DEVELOPERS ARE FOCUSING MORE IN THE SUBURBAN BANGKOK AREA In 2009 listed developers accounted for 12,000 condominium units focus on the growth in the lower – mid range market and most of these launched in suburban Bangkok area but in the rst three quarters of are located in the suburban Bangkok area due to lower land prices. For 2010 more than 15,500 units were launched representing an increase of Q4 2010 Sansiri Plc, Land & Houses Plc and Quality Houses Plc plan to 29%. This was the result of listed companies setting up new brands to launch more condominium projects in the suburban Bangkok area. DEMAND DRIVER – FUTURE GROWTH OF BANGKOK ACTUAL AND ESTIMATED ADDITION OF POPULATION IN BANGKOK FOR EACH 5 YEAR PERIOD Source: Colliers International Thailand Research Source: Population Division of the Department of Economic and Social A airs of the United Nations Urbanisation is a key trend in industrializing countries around the world and Laos also have an e ect. In the next ve years the population is and Thailand is no exception. The lure of better economic prospects estimated to grow by 423,000 and obviously these people must live leads thousands to leave the provinces in search of a better life and the somewhere. While this is likely to require low end housing this will have commercial centre attracts the lion share of this internal migration. Also a spill over e ect on mid to high end housing as the population bene ts movements of migrants from the neighbouring countries of Myanmar from economic growth created by the increase in population. COLLIERS INTERNATIONAL | P. 15
  • 16. BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010 FINANCING HOUSING LOANS FOR PERSONAL CONSUMPTION EXTENDED BY FINANCIAL INSTITUTIONS Colliers International Thailand Research Source : Bank of Thailand Note: Excludes negligible amounts of nancing from other sources Financing of residential real estate is both a source of growth and a compared to specialized nance institutions such as the Government product of it but the availability of nance is vital to supporting the sector. Housing Bank which continues to provide the foundation. It would appear For every quarter from 2008 nancing has been on the rise and that even for lower end products commercial banks are willing to provide commercial banks have increasingly become the more dominant players nance. THE LUXURY CONDOMINIUM MARKET LUXURY CONDOMINIUM UNITS LAUNCHED DURING Q1 2009 – Q3 2010 Source : Colliers International Thailand Research Despite the interest generated by the launches of a ordable condominiums 215 units on Phayathai road, close to the Airport link Phayathai station the luxury segment is also experiencing healthy growth. In fact, and 161 units of M Silom on Narathiwas Rajanakarin. Sansiri launched approximately 670 units were launched in Q3 2010. From Q1 2009 – Q2 VIA 49 on Sukhumvit road with only 85 units. Most buyers are Thai and 2010 most of the launches sold out within few weeks due to limited even in this market segment foreign demand is not the most critical choices but the same has not been the case for Q3 2010 due to the factor in the success in a development. amount of units. Major Development Plc introduced M Phayathai with COLLIERS INTERNATIONAL | P. 16
  • 17. BANGKOK CONDOMINIUM MARKET REPORT | Q3 2010 FORECAST The breakneck number of launches is set to slow over the next few quarters but still remain robust as developers need to consolidate and focus on construction and marketing of their existing projects. Although take up has slowed the demand for low end, smaller unit size condominiums below two million baht looks set to continue as these appeal to lower income earners who constitute the vast majority of the workforce in Bangkok. The danger is that the high level of launches continues unabated thus swamping the market too quickly. However the lower take up rates will have a sobering a ect on sentiment. In all likelihood launches look set to moderate to sustainable levels and allow the residential market to consolidate. Changes in planning regulations in 2011 following the national census could lead to more relaxed restrictions on the minimum number of car parking spaces that must be included in a new development. As many projects are located close to new mass transit lines, car ownership for these buyers may be lower and developers can t in more residential units at the expense of parking spaces. In the long term the growth patterns of Bangkok’s residential market will be shaped by the development of new mass transit lines. A ordability will continue to drive the market although it is di cult to envision unit sizes being reduced much further. Only when the high density developments are completed can the standard of living for the occupiers be assessed. Developers will be taking a keen interest when these recent launches are nally supplied in order to make adjustments to future projects. COLLIERS INTERNATIONAL | P. 17
  • 18. BANGKOK OFFICE MARKET REPORT | Q3 2010 COLLIERS INTERNATIONAL THAILAND MANAGEMENT TEAM 480 o ces in 61 countries on PROJECT SALES & MARKETING 6 continents Wasan Rattanakijjanukul | Manager United States: 135 The third largest commercial Canada: 39 real estate services company in ADVISORY SERVICES the world Latin America: 17 Napatr Tienchutima | Manager The second most recognised Asia Paci c: 194 commercial real estate brand OFFICE, INDUSTRIAL & RETAIL SERVICES EMEA: 95 globally Narumon Rodsiravoraphat | Senior Manager US$2 billion in annual revenue Over 2 billion square feet under REAL ESTATE MANAGEMENT SERVICES management Bandid Chayintu | Associate Director Over 15,000 professionals ADVISORY SERVICES | HOSPITALITY Jean Marc Garret | Director INVESTMENT SERVICES Nukarn Suwatikul | Senior Manager COLLIERS INTERNATIONAL THAILAND: Bangkok O ce RESIDENTIAL SALES & LEASING 17/F Ploenchit Center, Patima Jeerapaet | Managing Director 2 Sukhumvit Road, Klongtoey, Bangkok 10110 Thailand RESEARCH TEL +662 656 7000 Antony Picon | Senior Manager FAX +662 656 7111 Surachet Kongcheep | Manager EMAIL info.th@colliers.com Pattaya O ce VALUATION & ADVISORY SERVICES 519/4-5, Pattaya Second Road (Opposite Central Festival Nicholas Brown | Associate Director Pattaya Beach), Nongprue, Banglamung, Chonburi 20150 Phachsanun Phormthananunta | Manager TEL +6638 427 772 FAX +6638 427 772 PATTAYA OFFICE EMAIL info.pattaya@colliers.com Mark Bowling | Sales Manager Supannee Starojitski | Business Development Manager RESEARCHER: RESEARCHER: Thailand Thailand Antony Picon Surachet Kongcheep Senior Manager | Research Manager | Research EMAIL antony.picon@colliers.com EMAIL surachet.kongcheep@colliers.com This report and other research materials may be found on our website at www.colliers.co.th. Questions related to information herein should be directed to the Research Department at the number indicated above. This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. Colliers International is a worldwide a liation of independently owned and operated companies. Accelerating success. www.colliers.co.th