Condo development sets records as projects follow new mass-transit lines

Real Estate September 11, 2017 01:00

By   SOMLUCK SRIMALEE
THE NATION

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PROPERTY firms plan to launch up to 150,000 units in additional residential projects worth over Bt500 billion between now and 2019 around new mass transit routes scheduled to open by 2020.



 

Most of the condominium projects will focus on middle- and upper-income markets at prices ranks between Bt100,000 and more than Bt300,000 per square metre, said Pruksa Real Estate Plc’s chief executive officer of premium group Prasert Taedullayasatit, who is also president of the Thai Condominium Association.

The sales costs reflect a projected increase of some 100 per cent in land prices from before the announcement of transit expansion until the lines are complete and open to the public.

The high level of investment in condominium projects around mass transit routes will stimulate business growth and an increase in jobs in construction, as well as related sectors including raw materials, furniture, and home appliance.

This, in turn, will boost the country’s domestic economic growth, said Pruksa.

“Normally, when the purchase a residential property at a price of Bt1 million, most homebuyers will pay about Bt500,000 – or half of the residential price – to buy home decorations and home appliances,” he said. “This is the key to driving the country’s economy.”

Ananda Development Plc earlier this month launched three condominium projects worth Bt8.3 billion located close to the mass transit system. Chanond Ruangkritya, president and chief executive officer, said after the launch that the company would continue to focus on developing condominium projects located close to current mass transit routes as well as new ones.

“We will launch new condominium average Bt20 billion a year,” Chanond said.

The National Housing Authority (NHA) also plans to develop both residential and commercial buildings in Bangkok and suburbs, including Lad Krabang district, Din Dang, and Lum Luk Ka Pathumthani province. The projects fall under a public-private partnership contract with private firms worth over Bt100 billion between this year and 2019, NHA’s governor, Tachaphol Kanjanakul, said recently after launching the first project worth Bt464 million.

NHA is the lone developer of that project, which at Prachanivet 3 in Nonthaburi province, is close to the pink line route under construction from Kae Rai to Min Buri district. Approved by the Cabinet on August 29, the project features condo units priced between Bt880,000 and Bt1 million. 

Others companies – both listed and non-listed – have continued to expand their investments in condo developments around current and under-construction mass transit routes. They are riding on the coat-tails of the government’s policy to invest Bt1.8 trillion to develop the rail system nationwide, including 10 mass transit routes linking the suburbs to Bangkok. They include the pink line between Kae Rai and Min Buri worth Bt54 billion, and the yellow line from Lat Phrao to Samrong at about Bt52 billion. Both are at the contract signing stage, ready to begin construction for targeted completion in 2020. Bids will open for constructing the next eight transit routes over the remainder of this year and next.

According to a survey by LPN Development Plc this year is seeing a record-setting explosion of new condominium project launches along both current and upcoming transit routes worth Bt217.7 billion.

The survey pointed to the first half of this year, which recorded 60 new condominium project launches in Bangkok and suburbs of a combined 34,580 units worth Bt117.67 billion. The company estimated the second half of the year would see the launch of more than 17,000 units worth Bt100 billion.

Another survey listed the top three location for new residential launches in the first half. First was along the green line route extension from On Nut to Bearing, in which six new projects worth about Bt20 billion had a combined 4,478 units. Second is Lat Phrao from Ratchayothin to Kasetnawamin, close to the new yellow line and extension of the green line, in which 10 projects worth about Bt20 billion and 4,447 units. And third is Bang Sue to Phra Nangklao Bridge where three new projects worth Bt18 billion offered a total 4,216 units, according to the Bangkok CitiSmart Co Ltd survey.