A Taiwanese developer and a Chinese contractor will separately launch pre-built condominium projects in the Ratchadaphisek and On Nut areas worth a combined 6 billion baht in October because they are optimistic about Thailand's potential in the Asean Economic Community (AEC).
Monchai Orawongpaisan, senior manager for project sales and marketing at the property consultant Colliers International Thailand Co, said the two investors view Thailand as a possible Asean hub because of the influx of regional residents likely when the AEC kicks off in 2015 due to the country's geography.
"Thailand is livable with lower costs and a good standard of living. When investors visit Thailand for a business meeting, they often spend an additional few days for leisure. For other destinations like Singapore, business meetings usually only consist of one day," he said.
The company is in talks with the two investors whose names cannot be disclosed. The deals are expected to be finalised within two weeks.The Taiwanese investor is a top-10 developer in Taiwan and has a connection with China State Construction Engineering (Thailand) Co Ltd. It plans to get financial support from Taiwan to develop the project.
It is planning a condominium project worth 3-4 billion baht on a three-rai site on Pracha Uthit Road where an eight-storey unfinished building has sat since the 1997 economic crisis.
The project will comprise 1,500 units and it will determine the price depending on how fast it wants to close sales. For Ratchadaphisek Road, 70,000 baht per square metre should close sales within a few months. It will focus on smaller rooms as much of the available supply is larger, said Mr Monchai.
The Chinese investor is among the top 20 contractors in China. It has shifted to overseas property due to oversupply in the Chinese market. The firm will cover 70% of the investment to construct its first project in Thailand, borrowing the rest from local banks.
The project will be located on a plot of 5-8 rai close to U Delight @ On Nut condominium project, which was developed by Grand Unity Development Co. Earlier Grand Unity planned new phases of U Delight, but then decided to sell the remaining plots with the construction permit last year.
It will develop 700-800 units, but the price is not finalised. Colliers suggests average prices of 60,000 to 65,000 baht a sq m to close sales quickly, as successful projects at that location cost 50,000 to 60,000 baht per sq m.
"Thailand will be the first overseas country for this Chinese developer. Myanmar is slated next with a hospitality property. Previously it was interested in Cambodia, but now it changed to Thailand," he said.
As both companies are new to Thailand and their financial status is strong, they will build units first to establish confidence among consumers, similar to the TC Green condominium project on Rama IX Road, developed by a Chinese developer and launched early this year.
"The two projects will be launched in October and construction will start immediately regardless of the sales rate," said Mr Monchai.
Besides these two deals, Colliers expects to sell three or four more projects in the second half.
It targets managing 10 projects worth a combined 11 billion baht by year-end, up from 3 billion last year, after launching a residential project sales division in March 2011.
About the author
- Writer: Kanana Katharangsiporn
Position: Business Reporter