source: Bkk Post July 2 2008
The Bank of Thailand has projected higher condominium demand in the second half
as consumers move to save travelling expenses. In its May economic and finance
report, the central bank reported a stronger real estate market in April as
buyers who had delayed their decisions to wait for tax incentives made
transactions.
Land and real estate transactions in April were valued at 35.46 billion baht, up
24.4% year-on-year. The growth was in-line with an 11.9% increase in housing
loans.
The bank found that real estate supply, especially townhouses, also expanded in
April. Total land areas that received construction permits nationwide in the
month fell by 28.7% year-on-year while cement sales dropped by 2.3%.
The bank believes that developers of townhouses and single houses will reduce
project sizes and carefully evaluate the market before launching projects.
The Government Housing Bank (GH Bank) reported that overall registrations of
newly built residential units declined this year while the registration of
condominium units in Bangkok rose 30%.
Condominiums accounted for 40% of total new residential units registered but the
proportion was only 25% if Greater Bangkok was included.
GH Bank president Khan Prachuabmoh said most financial institutions had higher
targets for new housing loans releases this year, but the first quarter showed
only 50 billion baht in new housing loans, down from the 59-60 billion baht seen
in the past two years.
He anticipated that total credit releases for the country this year would be
around the same amount as last year at 270 billion baht. Outstanding housing
loans from all financial institutions at the end of the first quarter were 1.5
trillion baht, slightly up from 1.48 trillion at the end of the first quarter
last year.
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Raimon Land doubles prices |
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High costs push tag to B300,000 per sq m
source: Bkk Post July 2 2008
Raimon Land plans to double the prices of its new luxury condominium to 300,000
baht per square metre in line with rising production costs, according to chief
executive Nigel Cornick.
Construction costs alone have gone up by 20% to about 90,000 baht per square
metre, and the company said it may raise prices of its future projects, starting
with the 185 Rajadamri condominium on Rajadamri Road set to launch by year-end.
Prices of 185 Rajadamri were earlier expected to start at 150,000 baht per sq m.
Mr Cornick said he was not concerned that the price increase would affect sales
as most of its projects targeted high-end customers who were less
price-sensitive.
It has already increased prices for The River, located on the bank of the Chao
Phraya River, to 140,000 baht per sq m from 90,000 baht.
The company expects to realise revenue of two billion baht this year primarily
from its previous projects, with a nine-billion-baht sales backlog carried over
from last year.
Raimon Land has two condominiums under construction: the 4.8-billion-baht
Northpoint in Pattaya and the 13-billion-baht project The River, its largest to
date. They are are due to finish in 2010 and 2011 respectively.
Raimon Land has secured a five-billion-baht project loan for the construction of
The River, according to its statement. The loan is a syndicated facility
provided by Standard Chartered Bank (Thai) as the lead lender, TMB Bank and Siam
City Bank.
The company now has completed six new properties with a total sales value of six
billion baht. Four of those are in Bangkok under three brands: The Lofts, The
Lakes and The Legend. The other two are Northshore in Pattaya and Kata Gardens
in Phuket.
Four projects to be launched this year include 185 Rajadamri in Bangkok, Amalfi
in Phuket, The Lofts Soutshore and Edge in Pattaya. Their combined value would
be at least 22.15 billion baht.
It expects to invest 1.3 billion baht in joint-venture projects in Bangkok,
Phuket and Pattaya this year.
As of its earlier plan to raise its registered capital by 1.37 billion shares
last month to support its future projects, Raimon Land is looking to offer its
770 million shares to Thai partners as the Foreign Business Act restricts
foreigners from owning more than a 49% share. The remaining shares would be
offered to its major shareholder IFA Hotels & Resorts of the United Arab
Emirates.
The company has been in talks with Thai buyers, especially funds and
institutions.
In order to expand into the mass market, Raimon Land yesterday announced a new
marketing strategy to sponsor the reality TV show Superstar, produced by
Orchestra Investor Group Co with a budget of 120 million baht.
It will feature the lives of 14 stars living together in Raimon Land's The Lofts
Yennakart on Sathorn Road. The show is scheduled to air between Aug 9 and Oct 25
on Channel 9.
''It's an opportunity to grow our brand as there seem to be a lot of people that
don't know about our projects,'' Mr Cornick said.
The show would target young people who could be potential customers of Raimon
Land.
Shares of Raimon Land closed on Monday on the Stock Exchange of Thailand at 0.69
baht, down four satang, in trade worth 270,000 baht.
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