CBD land prices falling a steep 20-30 per cent

The Sukhumvit City Resort condominium project in Sukhumvit Soi 11 has also been forced to lower its price, from Bt90,000 a square metre to Bt79,000.

Although demand for undeveloped land and residential projects continues to grow, investors are delaying their purchases, because most believe land and residences in the Kingdom, especially in the CBD, will fall 20-30 per cent once the global recession starts really affecting the local economy, Sahatchai said.

He said investors started waiting to see what would happen in last year's fourth quarter, although some plan to begin investing early this year, especially those from the Middle East. Singaporean investors have already begun shopping for residential projects.

Prime business locations have seen prices drop 20-30 per cent for undeveloped land and 15-20 per cent for condominium projects. This includes Ratchadaphisek and Srinakarin roads, as well as portions of Sukhumvit Road, Sahatchai said.

He said land and residence prices on Sathorn, Silom and lower Sukhumvit roads were also falling, but only 10-20 per cent for undeveloped land and 10-15 per cent for residences, due to limited supply in those locations.

Harrison will auction off 31 plots of land and building projects worth Bt6 billion this month, including undeveloped land, hotels and resorts, and serviced and regular apartments, both in Bangkok and upcountry.

Interested parties may obtain a list of all properties in the auctioned from Harrison's main office or its website, www.harrison.co.th. All sealed bids must be submitted by January 30 in accordance with company terms and conditions. Bidders must put up a Bt2-million guarantee for each property.

Properties to be auctioned include a hotel on Rama IV Road, valued at Bt140 million; an apartment building in Soi Langsuan, valued at Bt290 million; a 1-rai plot of land in Sukhumvit Soi 48/3, valued at Bt161 million; a 14-rai plot of land in South Pattaya, valued Bt265 million; and an apartment building on Phuket's Chalong Beach.

"We want to hold this auction to boost our sales and stimulate the property market in the first half of the year, especially with asset prices now just beginning to drop 10-20 per cent from last year," Sahatchai said.

Investors can find some great deals in the market now compared with last year, he said, adding that the company expected earnings of Bt1 billion to Bt1.5 billion from combined assets worth Bt6 billion in the auction.

At present, Harrison is managing sales for Bt20 billion worth of residential and undeveloped land worth on top of the 31 assets participating in this latest auction. The company is negotiating to act as sales agent for 10 residential projects worth up to Bt20 billion and expects to conclude property-management deals for five projects worth Bt10 billion this year.

Sahatchai said Harrison expected sales of Bt7 billion this year, the same as last year. This is less than the Bt10 billion recorded for 2007.

To achieve its target, the company has set a marketing budget of Bt8 million to Bt9 million for nine promotional events, including roadshows in Hong Kong and Singapore.