Pace jacks up MahaNakhon prices after freehold switch
The SET-listed Pace Development Corporation has raised the sale prices of its MahaNakhon development, expected to be the country's tallest building, after changing property ownership of the plot from leasehold to freehold.
MahaSamutr in Hua Hin by Pace Development features luxury villas and a country club set around Asia’s first clear-water lagoon.
"The change in land ownership rights will increase the project's attractiveness to ultra-rich foreign buyers," said chief executive Sorapoj Techakraisri, adding that prices would increase by at least 12% from the original price of 250,000 a square metre.
Pace expects a four-percentage-point increase in gross margin to 36%.
Mr Sorapoj said it plans to introduce the project in London and Moscow early next year after holding roadshows in Dubai, Hong Kong and Singapore in recent years.
Located near Chong Nonsi skytrain station, the 314-metre-high MahaNakhon will comprise 200 luxury condo units branded under The Ritz-Carlton Residences Bangkok, the Bangkok Edition Hotel, with 159 rooms and the lifestyle mall Cube with a lettable area of 5,200 square metres.
Last month, Pace spent 1.45 billion baht to buy plots covering seven rai for the project after signing a 103-year lease. In total, MahaNakhon is located on nine rai.
The land acquisition increases the project value to 21 billion baht from 19 billion, as condo sales prices are hiked 12-15%.
Some 60% of units are booked, and 75% of those units agreed to pay more to change from leasehold to freehold. The rest are pending consideration.
"If customers who bought leasehold units don't want to change, they can still lease with us," Mr Sorapoj said.
As the 159 hotel rooms the company will own are part of the project, the maximum foreign ownership quota can be up to 84% of the 200 condo units for sale. Of the sold units, 60% were bought by foreigners, mainly from Hong Kong and Singapore.
Project construction is scheduled for completion by late 2015 and unit transfers will spill over to 2016.
"The weaker baht earlier in the year boosted new sales to 1 billion baht," Mr Sorapoj said. "The political crisis and falling stock market also shifted some investors to property."
Units remaining for sale start from 140 sq m, while prices run from 45-270 million baht or up to 360,000 baht per sq m.
This year Pace expects 200 million baht in revenue and 300 million in expenses as it waits for MahaNakhon to be built.
Revenue in 2014 will be from sales of remaining units at two condo projects — Ficus Lane and Saladaeng Residences — and some 50 million baht from rents at Cube in the second quarter and sales at MahaSamutr in Hua Hin.
Shares of PACE closed yesterday on the SET at 1.84 baht, up 19 satang, in trade worth 321 million baht.