New Nordic scavenges Thai buyers

New Nordic scavenges Thai buyers

New Nordic Group, a Pattaya-based developer owned by Thai and Norwegian investors, shifted its focus to Thai condominium investors, offering 10% projected rental returns per year, as its foreign ownership quota is nearly full.

Morten Marthinsen, the general manager of Nordic Living Thailand Co, the developer's exclusive sole agent, said the campaign, in which it claimed to offer the highest yield in Pattaya, focused on the Thai market starting three months ago and recorded 100 units sold worth around 400 million baht.

"Pattaya is a safe area for condo investing because units can be turned into rental rooms for tourists. The tourism industry in Pattaya is growing quickly thanks to strong promotion by the Tourism Authority of Thailand in Asian markets like China and Japan," he said.

The tourism sector in Pattaya is also not affected by political turmoil in Bangkok, as more foreigners have moved to Pattaya and away from Bangkok.

While some hotels in Bangkok have seen a sharp drop in occupancy during the political crisis, occupancy at Pattaya hotels has only dipped slightly by 10-15%, he said.

Mr Marthinsen said the campaign is for investment only, as buyers cannot use their unit throughout contract period, either five and 10-year options. For the five-year programme, buyers are projected to get back 50% of the unit price. Buyers are projected to receive all the money they paid for a unit if they choose the 10-year period.

There are 180 units in the campaign worth 720 million baht at 14 projects started over the past two years. Unit sizes range from 30-150 square metres, priced from 75,000 baht per sq m, or 2.2 to 16 million baht a unit.

"New Nordic Group will manage all the rooms, as it has strong networks with travel agents in Europe," said Mr Marthinsen. Major markets include Russia and Europe, and more focus will be placed on Chinese, South Koreans and Japanese.

The group entered Pattaya 14 years ago, buying a 2,000-rai plot in the Pra Tamnak area. Its first project was completed in 2000. New Nordic invested 12 billion baht to develop 50 projects on this plot.

The group has plots remaining to develop 11 new projects, which are scheduled to be launched in 2014-2015 with a combined sales value reaching 2.64 billion baht.

During the past 12 years of property development in Pattaya's Pra Tamnak area, the group only tapped European buyers, particularly Scandinavians, and did very little promotion in Thailand. However, this shift to Thai buyers is because European markets are slowing and the project's foreign ownership quota is nearly full. By law, foreign ownership is capped at 49% of the project's salable areas.

"We aim to have two units sold a day this year. We also plan to market to Chinese buyers, as the Chinese middle class is growing quickly and they have potential as property buyers outside their country," he said.

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