Pattaya City Condominium Market Report Half Year 2012

Pattaya City Condominium market rePort | H1 2012

H2 2011 / H1 2012

Supply

lAuNCHES

pRICES

TAKE-up

Pattaya City Condominium market rePort

THAIlANd

www.colliers.co.th

Pattaya City Condominium MarketHIgHlIgHTS Asimilarnumberofnewlylaunchedunitswereintroducedinthefirsthalfofthisyear,as compared with the second half of 2011

Just 250 units were completed and transferred during H1 2012. this is primarily due to a lower introduction of project launches during the worst of the economic crisis of 2008-2010

a large number of Pattaya and Bangkok based developers continue to make a strong vote of confidenceforthePattayamarket

Theaveragetake-uprateforthefirstsixmonthsof2012increasedbymorethan4.6%on 2011

the new Jomtien Second road will remain the most densely developed area throughout the municipalityduringthefirsthalfof2012,withmanymoreprojectsscheduledforthesecond half.

mARKET INdICAToRS

H1 2012 | condominium

Newlylaunchedunitsinthefirsthalf of 2012 were similar to the total launched during the second half of last year. this was due mainly to a large number of smaller projects being introduced with a selling price of less than 3 million baht, particularly withinthe Jomtien area.

Source : Colliers international thailand research

NEwly lAuNCHEd IN H1 2012

NEw lAuNCHES powER pATTAyA mARKET

HISToRICAl Supply

Source : department of Land and Colliers international thailand

AttheendofH12012,thetotalsupplyofcondominiumunitsamountstoapproximately46,350.DuringH12012aratherlowfigureof just250units were completed and transferred. this is primarily due to the massive decline in condo launches following the wake of the worldwide economic crisis, when many developersdecidedtoputtheirprojectsonholdoffuntiltherewasanupturninthe

market.Fromoneextremetotheother,weexpecttoseeawhopping5,900unitscompletedduringthesecondhalfoftheyearaccordingtodevelopers reports.

Supply

CumulATIvE Supply IN BANgKoK

Pattaya city condominium rePort market | H1 2012

COLLIERS INTERNATIONAL | P. 2

Supply By loCATIoN, H1 2012


Pattaya proved to be the most popular zone for the condominium market in the years prior to 2000; however from 2001 onwards the Jomtien area has displayed continual growth due to the abundance of remaining beachfront andsecondarydevelopment sites,Pattayaon thecontrarynow faces a scarcity of development sites and those that are available are becoming prohibitively expensive. During 2005 the Pattaya Cityadministration initiated improvements to be made along thappraya road andintroducedanewJomtienSecondRoadextension.Theroadwasdesignedtoalleviatetrafficcongestion frombeachroadandnowhasmany sois linking both roads together.

Withtheintroductionofthisnewroadwhichisstillanongoingproject,we’ve witnessed the entire area opening up and become available for largescaleresortstylemassdevelopment,mostlyappealingtothelowerend of the market.

Thecondominiumsupplyexpectedtobecompletedbetween2012and2015intheJomtienareaisexpectedtosurpass14,000midtolowendunits.


CoNdomINIum Supply By loCATIoN, H1 2012


ThelargestcondominiumsupplyisinJomtien,representingabout41%ofthetotalfollowedbyPattayawithapproximately31%. Condominium projects in Pattaya are predominantly low rise in nature andtheaveragenumberofunitsperprojectisapproximately140,whichis similar to projects found in the Wongamat and Pratumnak areas. the figureforJomtienwasaround360unitsasuntilrecentlymanyoftheprojects have been high rise. as land costs are generally less along the JomtienSecondRoadithasenableddeveloperstolaunchlowcost,lowriseresortstyleprojectsoftennumberingover1,000unitssurroundinga large lagoon swimming pool and often based on a theme. Thepatternofoverallrealestatedevelopment isdifferentforJomtienandPattaya, asPattaya contains thevastmajority of bothhotels andcommercialdevelopments,which leavesvery limited landsupplies forlarge scale condominiums. on the other hand Jomtien was largely spared this kind of development duringthe80’sand90’sandasaresultsizabletractsoflandstillremainavailable for larger scale projects.




Accordingtoclaimsbydevelopersalmost5,900unitsarescheduledtobe completed and transferred during the second half of 2012,whichrepresentsanincreaseofmorethat12%ontotalsupply.Throughoutthe

years 2013-2015 Jomtien will continue to be the main player in the Pattaya condominium market, particularly in the middle to low endsectors.

new launches for H1 2012 were very similar to the second half of last year,withJomtienleadingthewayfollowedbyPattayacity.ThreenewprojectswerelaunchedinJomtiencomprisingmorethan1,000unitsineach project. the majority of condominium projects launched in the last 12 months havefocusedonmidtolowendbuyers,thoughtherearesomeexceptions

concentratingontheupperendofthemarket,alsoreportingstrongsalesfigures.MainstreambuyersbothforeignandThaiaremostlylookingforanaffordableholidayhome,notfarfromthebeach,withgoodfacilitiesand trusted management from a recognized developer with good track record.

Source : Colliers international thailand researchRemark:Developersexpectedcompletiondates


CumulATIvE fuTuRE Supply By yEAR ANd loCATIoN

NEwly lAuNCHEd uNITS By loCATIoN ANd HAlf yEAR

fuTuRE Supply



CoNdomINIum pRojECTS wITH HoTEl mANAgEmENT

dEmANd

the trend for condominiums with brand named hotel management or a hotel component continues strongly in Pattaya and there are several more due to be launched this coming high season. the addition of an international or quality domestic brand adds kudos to the development,aswellassignificantimprovementstoservicesandfacilitiestounitownersand to those who will choose to rent. the upshot is that capital values and strong yields are likely to increase with the addition of a hotel element.

No. pRojECT NAmE BRANd loCATIoN

1 movenpick White Sand Beach Pattaya movenpick na Jomtien

2 amari residences Pattaya amari Pratumnak

3 Centara avenue residence & Suites Pattaya Centara Pattaya

4 Waterfront Suites & residences Park Plaza Pratumnak

5 Centara Grand residences Pattaya Centara na Jomtien

6 modus Beachfront Condominium & al Fresco resort Hotel al Fresco resort Wongamat


TAKE-up RATE of lAuNCHEd pRojECTS SINCE 2010


the average take-up rate for Pratumnak increased by an average of approximately12%fromthesecondhalfof2011,highestofalllocationsinPattaya citymarket. The take-up rate ofWongamat, Jomtien&NaJomtienincreasedbyanaverageofapproximately8.8%fromthesecondhalf of 2011 and the remaining location, Pattaya recorded a slightdecrease. Duringthefirsthalfof2012threenewlargescaleprojectswerelaunchedintheJomtienarea,comprisingmorethan1,000unitsperproject,which

were warmly welcomed by investors and the take-up rate rose in Jomtien. on the contrary Pattaya area witnessed a slight decrease in H2 2011withnonewlaunchesduringthisperiod,howeverover2,000unitswere introducedduringH12012,yetthemajorityofbuyerspreferredlocationsawayfromthecity,whichaffectedtheaveragetake-uprate.




foREIgN owNERSHIp / domESTIC dEmANd

in contrast to the last few years where foreign buyers were the mainstay ofthePattayaandJomtienpropertyscene,we’reseeingaremarkableentry into all segments of the market from thai buyers. For many years the majority of the foreign owned local development companies struggled toselltheir51%Thairequirement,howeverthereisnowashift inasmuch as many thai developers coming to Pattaya sell well to the thai marketanddonotcomeclosetofillingtheirforeignownershipquota. the thai market is particularly brand conscious and tends to follow well knownnamessuchasLPN,QHouse,MajorDevelopmentsandotherbignamessuchasSansiriandSupalai,whowebelievewillsoonenterthemarketplace. other lesser known local developers have discovered the attraction of adding a brand name hotel component to their project which addsprestige,desirabilityandinturnsalestobothThaisandforeignersare encouraging. TheRussianmarketcontinueditsresilienceduringthefirsthalfoftheyearanditappearsthatthey’relessaffectedbyglobaleconomicproblems

thanothernations.Europeans,BritishandAmericanbuyershavenotshownsuchdemandasinpreviousyears,howeverbuyersfromAustraliahavealsobeennotablethroughoutearly2012duetopreferableexchangerates. emerging markets such as india and China have now started to put their toes in the water. We believe that these countries could quite possibly become the superpowers of the future when it comes to buying property in Pattaya. during the early part of the year we witnessed a wide selection of condominiums enter the market and were astounded by the massive success of many and the incredible take up rates in most areas. Certain projects have been almost sold out as soon as they were launched,otherstookseveralmonthstoreach50%to70%soldout,howevertheoverall results are very encouraging for the market in general and there seems to be no stopping the immense popularity that Pattaya holds for both investors and end users.

the average selling price in Wongamat remains the highest in all of Pattaya city. there were only two new projects launched in this area during the first half of 2012, so the area appears to be retaining itsexclusivity. The averageprice inPattaya, Jomtien andNaJomtien incontrastdecreasedslightly,inpartduetotheincreasedamountofnewlylaunched projects aimed at the mid to lower end of the market.


AvERAgE SEllINg pRICE pER Sq m By loCATIoN, H1 2012


pRICE

BEACH fRoNTAgE ANd HEIgHT of CoNdomINIumS AffECT oN pRICE H1 2012

loCATIoNAvERAgE SEllINg pRICE

(THB / Sq m.)

AvERAgE SEllINg pRICE (THB / Sq m.)

BEACHfRoNT oTHER AREAHIgH RISE

(> 8 storey)

low RISE

(< 8 storey)

Wongamat 64,793 109,900 43,500 65,650 62,500

Pattaya 54,000 56,000 43,200

Pratumnak 55,270 58,950 51,650

Jomtien 46,803 67,462 42,600 58,950 40,860

na Jomtien 51,500 104,700 41,500 69,550 40,856

Beach frontage is thekeydriver inattractinghigherprices for luxurycondominiums.Pricescanrisebyover100%whenaprojectislocatedbythebeach,especiallyinWongamatandNaJomtienareas.

the average selling price of a high rise project is higher than that of a lowrise,dueto the increasedconstructioncostsandtheprivilegeof

having a sea view from all units also attracts a premium. However,certain low rise projects with an emphasis on facilities such as a large themed lagoon swimmingpool or amenities you’d expect tofind in aresort will often command higher pricing.





ThecondominiummarketinPattayahasremainedrobustoverthelast6months following the solid performance of 2011. Jomtien is the most popular area for many foreign and thai buyers looking to buy a second homeincloseproximitytothebeachatanaffordableprice.Mostoftheprojectslaunchedduringthefirstsixmonthsof2012andinthecomingmonths are focusing on the mid to low end of the market. Jomtien in particular runs the risk of oversupply to investors looking for strong yields and high capital appreciation. as a lifestyle choice and as an end user Jomtien can offer some very attractive properties ataffordableprices,particularlylongJomtienSecondRoad. Foreigners and Thais are almost equal in numbers as buyers,whichassists developers in selling out projects 100% based on quotas.However,withtheon-goingEUdebtcrisisissuesitwillhaveanegative

impact on visitors coming from countries within the euro zone. emphasis should be placed on developers selling to the domestic market with an increasing disposable income and a new found fondness of Pattaya followingthefloodinginmanyareasduringlatelastyear.

the second half of 2012 will bring with it high season and many new project launches in Pattaya, we expect the take up rate to increasesignificantlyhigherthaninH1.

ouTlooK



AppENdIX


ZoNINg



Pattaya is a city located on the east coast of the Gulf of thailand about 165kmsoutheastofBangkok.Itiswithin,butnotunderthejurisdictionof amphoe Bang Lamung in the province of Chonburi. the city of Pattaya is a self-governing municipality that covers the whole tambon of nong Prue,NaKlua,partsofHuaiYaiandNongPlaLai.Itislocatedwithintheheavily industrialized Eastern Seaboard zone, along with Sri Racha,LaemChabangandChonBuri.Ithasapopulationof556,916andcoversanareaof49.37Sqkm.

Pattaya city occupies most of the coastline of Banglamung (one of the 11 districts that comprise Chonburi Province). it is divided into a larger northern section that spans the areas to the east of naklua beach (the northernmost beach) and Pattaya beach (the main beach), plus theBuddha Hill headland (immediately south of Pattaya beach), and asmallersouthernsectioncoveringtheareatotheeastofJomtienbeach,which lies directly south of Buddha Hill.

the report covers the Pattaya city area as well as na Jomtien and a distinction is made between Pattaya city and Pattaya bay which constitutes part of the overall area under consideration.

Pattayacitycanbedividedintofivezonesforthepurposesofthisreport.Below is a summary of each zone.

1. woNg AmATthis is the area to the north of Pattaya nua and is considered a more peaceful,up-marketlocationandarelativelynewsettingforcondominiumdevelopment.WongAmatbeachisconsideredthefinestinPattayaandboasts several of the higher end luxury hotels and condominiums.Limited beachfront land should ensure that prices increase in tandem with the popularity of this area from both thais and foreigners. 2. pATTAyAthis area is considered as the city centre. the section of beach from Central road south to the harbour runs adjacent the core of Pattaya’s abundant nightlife area. Pattaya nua and klang are the areas favoured by Asianvisitors,especiallyChinese&Korean.Alargenumberofexpatsemployees also prefer this location due to easy access of the main highways.TheareaofSouthPattayaispopularamongMiddleEastern,South asian and russian visitors. the area along Soi 15 Second road is enjoying resurgence in popularity amongst buyers.

3. pRATumNAKLocatedtothesouthofPattayaandborderingJomtien,Pratumnak isconsideredaquietresidentialareawithamixofluxuryvillas,highandlow rise condominiums. Pratumnak area features two beaches, CosyBeach and Haad u thong which are popular with russian and Scandinavian visitors. Restrictions on condo development, limitedavailability of land and desirability of the area should ensure that property prices in Pratumnak will steadily rise.

4. jomTIENJomtien beach is about 1 km south of Pratumnak Hill. the locale is home to many high-rise condominiums, beach front hotels, shops andrestaurants.TheareaatthebeginningofJomtienisconsideredbusier,while the area located at the end of this beach known as na Jomtien is considered to be much more peaceful and less congested.

5. NA jomTIENna Jomtien beach is south of Jomtien and partially does not have a beachfront road and is less developed as a result. the main road connection is Sukhumvit road, which is located between 500–1,000meters from the beach, this area extends to Ban Amphoe beach inSattahip district. Note: The report covers residential areas located on or west of Sukhumvit road.




www.colliers.co.th

CollIERS INTERNATIoNAl THAIlANd mANAgEmENT TEAm Pattaya oFFiCemark Bowling | Senior Sales managerSupannee Starojitski | Senior Business development Manager/OfficeManager ProJeCt SaLeS & marketinGmonchai orawongpaisan | associate director reSidentiaL SaLeS & LeaSinGnapaswan Chotephard | manager reSearCHtony Picon | associate director Surachet kongcheep | Senior manager

oFFiCe & induStriaL SerViCeSnarumon rodsiravoraphat | associate director retaiL SerViCeSasharawan Wachananont | associate director adViSory SerViCeS | HoSPitaLity Jean marc Garret | director adViSory SerViCeSnapatr tienchutima | associate director

reaL eState manaGement SerViCeSPrasert Saiphrawan | Senior manager

inVeStment SerViCeSnukarn Suwatikul | associate director Wasan rattanakijjanukul | Senior manager

VaLuation & adViSory SerViCeSPhachsanun Phormthananunta | director Wanida Suksuwan | associate director Hua Hin oFFiCeSunchai kooakachai | Senior manager

RESEARCHER:

thailandSurachet kongcheepSenior manager | researchEmAIl [email protected]

Thisreportandotherresearchmaterialsmaybefoundonourwebsiteatwww.colliers.co.th.Questionsrelatedtoinformation herein should be directed to the research department at the number indicated above. this document has been prepared by Colliers international for advertising and general information only. Colliers international makes no guarantees,representationsorwarrantiesofanykind,expressedorimplied,regardingtheinformationincluding,butnotlimitedto,warrantiesofcontent,accuracyandreliability.Anyinterestedpartyshouldundertaketheirowninquiriesastotheaccuracyoftheinformation.ColliersInternationalexcludesunequivocallyallinferredorimpliedterms,conditionsandwarrantiesarisingoutofthisdocumentandexcludesallliabilityforlossanddamagesarisingtherefrom.ColliersInternationalisaworldwideaffiliationofindependentlyownedandoperatedcompanies.

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Pattaya City Condominium Market Report Half Year 2012

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