Developers home in on suburbs as new Bangkok city plan moves
Caution exercised before plan comes into effect in May
Property firms are ready to expand their investment in the suburbs of the capital, especially in locations close to the Purple Line mass-transit route from Bang Sue to Bang Yai, while awaiting the new Bangkok city plan that is due to take effect on May 15.
"We have to wait and see what changes there will be when the new Bangkok city plan becomes effective, because some locations may no longer be available for the development of high-rise residences, or there could be limits on the number of units. Until then, we have to suspend land purchases in the central business districts, as there is a risk that we will not be allowed to develop condominium projects there," said Anuphong Assavabhokin, CEO of Asian Property Development.
"However, we have continued to buy land and launch residential projects, for both condominiums and detached housing, in the suburbs, especially on Rattanathibet Road, located close to the Purple Line mass-transit rail route," he said.
LPN Development managing director Opas Sripayak said his company had delayed buying land in Bangkok's CBDs since December. This is because if it had purchased any plots, it would not have been able apply for an environmental impact assessment (EIA) before the new Bangkok city plan becomes effective.
"We were not sure whether land bought before final implementation of the Bangkok city plan, and not receiving an EIA permit, could be developed for condominium projects. The new city plan has some rule changes, especially on floor area ratio, green area ratio and the width of roads on which condominiums can be built.
"We have to protect our business by launching new projects in suburban areas and upcountry until the new Bangkok city plan becomes effective. As regards projects in the Bangkok CBDs that we have continued to launch, they are only projects for which we bought land early last year and have since received EIA permits," he said.
Strong Nonthaburi demand
According to a survey conducted by The Nation early this week, residential developments on Ngarmwongwan and Rattanathibet roads in Nonthaburi's Bang Yai district comprise more than 20 projects with a total of at least 10,000 units. The projects have been developed by both listed and non-listed companies.
The most popular condominium size is the one-bedroom type with usable space of at least 25 square metres at a starting price of Bt1 million per unit.
The most in-demand detached housing is homes starting at Bt5 million, while townhouses starting at Bt2.5 million are also in high demand.
Starting prices in the area have increased by between 20 and 30 per cent over the past two years, the survey found.
LPN Development launched the Bt1.5-billion Lumpini Park Rattanathibet-Ngarmwongwan project in the final quarter of last year, with 1,250 units starting at Bt1.1 million.
Sansiri introduced the Bt1.3-billion D Condo Rattanathibet last year, with 1,325 units starting at Bt900,000. The company has also launched detached houses and townhouse at this location.
Also last year, Narai Property debuted The Parkland Ngarmwongwan-Khae Rai. The condominium project is worth Bt1.36 billion and comprises 635 units.
Supalai, meanwhile, developed 10 condo projects together worth more than Bt13 billion in Nonthaburi province last year.
SC Asset developed three residential projects, for both condominiums and detached housing, worth more than Bt5 billion combined on Wong Sawang and Ratchaphruek roads. Sales in this location were Bt500 million last year.
Property Perfect has 10 detached-housing projects worth nearly Bt10 billion in this location under the Perfect Place, Perfect Masterpiece and Perfect Park brands, while Asian Property Development has condominium, townhouse and detached-housing projects worth nearly Bt5 billion on Ngarmwongwan and Rattanathibet roads.
Land prices rising
Following the demand to develop projects on Ngarmwongwan and Rattanathibet roads, land prices in the area have rocketed from Bt30,000 per square wah five years to Bt100,000-Bt200,000 this year.
Atip Bichanond, managing director of Supalai, which has projects in this location, said that while land prices on Rattanathibet Road had risen by more than 50 per cent in three years, they were still lower than in some parts of Bangkok.
This provides an opportunity to develop projects that offer lower prices than in Bangkok as well as easy access to the city, which will only be one hour away by train when the Purple Line route is completed.
Meanwhile, a Real Estate Information Centre (REIC) survey shows that as of the end of last year, there were 181 residential projects in Nonthaburi province with 45,822 units together worth Bt147.41 billion.
Sixteen of the projects were launched in 2011 as low-rise estates for both detached housing and townhouses, with a combined 34,271 units worth Bt126.31 billion. Another 21 projects comprising a combined 11,551 units worth Bt21.1 billion were launched last year.
These projects have achieved sales valued at Bt79.72 billion, leaving an inventory of 19,600 units for sale worth Bt67.7 billion.
The REIC estimates it would take 20-30 months to sell them all if no new projects were launched this year.