THAILAND CONDO SITUATION 2008

Colliers International Thailand anticipates tougher competition in the serviced apartment market and has urged owners and to refocus their marketing strategy, said managing director Patima Jeerapaet. The company's research shows that by 2011, there will be 27 billion baht worth of investments in 38 new buildings, adding 6,580 units to total supply. Mr Patima said the lower cost of investment and operation had attracted many investors to serviced apartments, instead of building hotels. Risinee Sarikaputra, Colliers' research department manager, said there currently were 10,685 units in 75 serviced apartment buildings in Bangkok with an average occupancy rate of 83.33% last year. However, the increase in demand has lagged the increase in supply. Supply on a room-night basis increased by 167% year-on-year in 2007 as against room-night demand of only 9.3%. The traditional main business of serviced apartments has been expatriates residing in Bangkok for a period of more than one month. However, current core demand comprises two groups _ new expat arrivals in Bangkok and short-stay tourists and business travellers.
Mr Patima said competition has meant that many apartments had shifted more to the short-stay market _ as many as 65% of guests in some buildings. He said that if the hotel market was too competitive, hoteliers would cut prices and cause a knock-on effect on serviced apartments. Therefore, apartment operators need well-planned marketing strategies to achieve sales targets. ''With many new hotels also opening in Bangkok over the new few years, the more successful serviced apartments are likely to be the ones focused on the core longer-stay market and offering guests staying more than one month a product that meets their requirements, rather than those engaging in a price-cutting war with hotels,'' he added. The breakdown of new supply shows a strong concentration in the Sukhumvit area, with 3,659 new units, or 56% of the new supply that Colliers forecasts will enter the market by 2011.

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About 200 condominium projects awaiting EIA approval
source: Bkk Post Mar 17 2008

City condominium developers should be patient in waiting for the approval of environmental impact assessments (EIAs) before moving ahead with construction to avoid possible damages. The Office of Natural Resources and Environmental Policy and Planning (ONEP) recently asked a district office in Bangkok to halt the construction of a condominium developed by SET-listed Prinsiri Plc. The move has troubled developers, especially in the highly competitive city condo segment.
All condominiums with 80 units or more require EIAs. However, some developers try to avoid the process by seeking construction permits for projects with less than 80 units. Once the permit is issued, they ask for an amendment and add more units in the project. Looking to make sales amid heavy competition, and facing rising construction costs, some developers start building before getting a permit and EIA approval.
Therefore, condominium buyers should ask developers about the construction permit and EIA approval before making a purchase commitment. That way they can head off future problems, such as delays in unit transfers or non-transferable units. Buyers should also ask what the developer will do for them if it does not receive the approvals. If buyers decide to buy a unit in the project that does not have a construction permit and EIA approval, they are taking a risk. Even when project construction is completed, they cannot get the rights transferred legally.
    The Thai Condominium Association estimated that about 200 projects worth more than 40 billion baht were waiting for EIA approval. Among them, 15 projects worth 23 billion baht will be developed by listed property firms. Typically, most condominiums open sales before getting construction permits and EIA

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