Riviera Group banking on local demand

Riviera Group banking on local demand

PATTAYA: Pattaya-based property developer The Riviera Group is confident that local demand will help it to close sales at a new 3.8-billion-baht condo project within the year. 

Managing director Winston Gale said the property market in Pattaya was not too bad but admitted the market had become inactive since the rouble dropped sharply late last year as the Russian market slowed down.

"Russians have been the major condo buyers in Pattaya over the past three years, replacing Europeans. Now many of them have gone since the rouble plummeted," he said. "But local demand has remained strong despite political problems."

The company's previous project, The Riviera Wongamat, and new project, The Riviera Jomtien, worth 3.4 billion baht and 3.8 billion baht, respectively, have focused on Thai demand, which has been strong since the massive floods of 2011.

To stimulate demand amid unfavourable sentiment, developers in Pattaya need to work harder. Some are offering attractive campaigns and packages, whereas others have stopped sales and marketing activities.

The Riviera Jomtien was launched last September and recorded sales of 30-40% just before the rouble fell.

Currently the sales rate is 51%, with Thais accounting for 75%, followed by a mix of Chinese and Europeans (15%) and Russians (10%).

The Riviera Jomtien will be located on a six-rai site, comprising 46 storeys with a total of 1,043 units sized 33-76 square metres and priced from 1.9 to 23 million baht a unit. Construction is set to be completed in 2018.

Its first project, The Riviera Wongamat, launched in October 2013, recorded sales of 83%, led by Thai buyers (65%), followed by Russians (20%) and a mix of Europeans, Chinese and Indians (15%).

The group also plans to launch a new project in Jomtien this year or early next on a similar scale to The Riviera Jomtien, said Mr Gale, a British investor who has been based in Pattaya for eight years.

Kasina Thammasuwan, chief executive of consultancy Clare Pattaya Property Co, which is the group's sole agent, said the rouble's fall was having a negative effect on Pattaya's property market sentiment, although it did not make a direct impact on the market. 

"Russians, who emerged as major buyers three or four years ago, account for 40-50% of total condo buyers in Pattaya. Those buying a property in US dollars will be less affected than those transferring from Russia," she said. 

The price segment suffering the strongest effect has been the lower end, with unit prices of 1-2 million baht, as these were popular with Russians.

Marketing and sales activities for this market segment have been frozen.

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