Developers unfazed by soaring prices

Developers unfazed by soaring prices

Large developers are still actively spending to acquire land in prime locations despite the gloomy economy and soaring land prices.

Nukarn Suwatikul, director for investment services at consultancy Colliers International Thailand, said large and SET-listed developers were continuing to seek good plots of land for condominium development despite the slowing economy.

"However, some developers are taking a longer time to consider a plot of land when acquiring it as land prices have risen incredibly," she said.

A few weeks ago, the price of land in Bangkok reached a new record high of 1.91 million baht per square wah for a 1,209-sq-w plot, or around three rai, situated by the house of a wealthy family on Chidlom Road opposite the Chidlom branch of Central Department Store.

The landlord opened bidding with a starting price of 1.9 million baht per sq w. SET-listed developer SC Asset Corporation Plc snapped it up at a price of 1.91 million baht, planning to develop a luxury condo project.

According to the Treasury Department, the appraised price of land on Rama I, Phloenchit and Chidlom roads was 800,000 baht per sq w during 2012-15, half the purchase price of the recent deal.

The previous record was 1.8 million baht per sq w for a plot on Sukhumvit Soi 6, just one step from Nana skytrain station. It was a three-rai plot acquired last year by SET-listed developer Quality Houses Plc.

After the Chidlom plot, the second-highest price per sq w this year was a plot on Thong Lor Soi 13 where Thon Krueng restaurant was formerly situated. It was bought by Gaysorn Property, which launched a condo project early this year, said Ms Nukarn.

Prasert Taedullayasatit, president of the Thai Condominium Association, said soaring land prices had driven up condominium prices despite lower purchasing power.

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