Pattaya H2-2012

Pattaya City Condominium market rePort | H2 2012

2011 / 2012

Supply

lAuNCHES

pRICES

TAKE-up

Pattaya City Condominium market rePort

THAIlANd

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Pattaya City Condominium MarketHIgHlIgHTS Just 590 units were completed and transferred in 2012. the total of completed condominium units registered at the department of Land at the end of 2012 is nearly 46,700 units. the relatively small amount of units completed and transferred is primarily due to the low number of project launches in the wake of the worst of the economic crisis when developers held back on the number of launches, which has since risen exponentially between 2011 & 2012. approximately 7,250 newly-launched units were introduced in the second half of 2012. the average take-up rate in all locations of the Pattaya city market increased by around 7% fromthefirstsixmonths. the average price of all projects in all locations in 2012 is around 13% lower than the price in 2011, this is because of the many mid-ranges to low-end condo projects launched in 2012. the new Jomtien Second road will remain the most densely developed area throughout the municipality during 2012, with many more projects scheduled for the second half.

mARKET INdICAToRS

H2 2012 | condominium

the number of newly-launched units in the second half of 2012 decreased from the total launched during the firsthalfof2012.Thiswasduetothehuge volume of condominium units being launched during the past year and the first half of 2012which arestill available on the market, causing many developers to hold back on their launches of new projects. in addition, most new condominium projects launched in the second half are smaller developments of approximately 250 units.

Source : Colliers international thailand research

NEwly lAuNCHEd IN H2 2012

NEw lAuNCHEd CoNdomINIum uNIT IN pATTAyA CITy

HISToRICAl Supply

Source : department of Land and Colliers international thailand

at the end of 2012, the total supply of condominium units amounted to approximately46,700.Duringtheyear2012aratherlowfigureofjust590 units were completed and transferred, primarily due to the low number of launches after the economic crisis.

a lot of condominium projects postponed their completion dates to 2013, due to the construction worker shortage. Completions of condominium

units in 2012 were the lowest in the past few years. With the aSean region opening up in 2015 it’s expected that many migrant workers from neighbouringcountrieswillstepinandfilltheexistinglabourshortageswithin the construction industry.

Supply

CumulATIvE Supply IN BANgKoK

Pattaya city condominium rePort market | H2 2012

COLLIERS INTERNATIONAL | P. 2

Supply By zoNE, H2 2012


Pattaya proved to be the most popular area 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 and secondary development sites. Pattaya, to the contrary, now faces a scarcity of development sites and those that are available are becoming prohibitively expensive. during 2005, the Pattaya City administration initiated improvements to be made along thappraya road and introduced a new Jomtien Second road extension. the road was

designedtoalleviatetrafficcongestionfromthebeachroadandnowhasmany sois linking both roads together.

many condominium projects were launched along Jomtien Second road in the Jomtien area and most of them are large-scale projects, so approximately 15,400 units were scheduled to be completed during 2013 - 2015.


CoNdomINIum Supply By loCATIoN, H2 2012


the largest condominium supply is in Jomtien, representing about 41% of the total, followed by Pattaya with approximately 31%.

many large-scale condominium projects were launched in the Jomtien area, so approximately 15,400 units are scheduled to be completed in 2015 in the Jomtien area. around 10,100 condominium units were expected to be added to the market during 2013 - 2015 in the Pratumnak area.

The pattern of overall real estate development is different forJomtien and Pattaya, as Pattaya contains the vast majority of both hotels and commercial developments, which leaves very limited land supply for large-scale condominiums.




according to developers almost 14,000 units are scheduled to be completed in 2013; more than 3,900 units in Jomtien was the highest number of all locations, followed by Pratumnak with around 3,400 units.

Jomtien still holds the largest share of the condominium market going into the future with nearly 15,400 units expected to be completed during 2013 - 2015.

NewlaunchesforH22012decreasedfromthefirsthalfbyaround30%and no new projects were launched in the na Jomtien area. Jomtien is still most fashionable for developers, due to nearly 3,000 units being launched in the second half of 2012, the highest of all locations.

the majority of condominium projects launched in the past two years have focused on mid-price to low-end buyers, though there are some

exceptions concentrated in the upper end of the market, also reporting strong sales figures. Mainstream buyers, both foreign and Thai, aremostly lookingforanaffordableholidayhome,notfarfromthebeach,with good facilities and trusted management from a recognised developer with a good track record.

Source: Colliers international thailand researchnote: developers’ expected completion dates


CumulATIvE fuTuRE Supply By yEAR ANd loCATIoN

NEwly-lAuNCHEd uNITS By loCATIoN ANd HAlf yEAR

fuTuRE Supply


lISTEd CompANIES IN THE pATTAyA mARKET


many listed companies were focusing more on the areas outside Bangkok, Pattaya, Chiang mai, khon kaen, khao yai, Cha am, Hua Hin and udon thani. Some listed developers launched their projects over the past severalyears,whilesomelisteddeveloperslaunchedtheirfirstprojectsin Pattaya during 2011 - 2012.

most developers in Pattaya are local companies and they are very successful in the market. However, some condominium projects in Pattaya were also developed by listed developers from Bangkok. raimon Land has been successful in Pattaya over the past three years with three projects under their belt. Prinsiri Plc. also launched a condominium project behind the avenue Pattaya over the past few years. major development launched a high-rise project in the na Jomtien area achieving a high take-up rate last year. in addition, some hotel management groups also launched condominium projects in joint ventures with condominium developers, at which the selling point is a condominiumprojectwithfive-starhotelmanagementandfacilities.Themost famous, capable developer in 2011 was LPn development, as they launched their first project in the Banglamung area along Sukhumvit

road which was sold out in few months. their second project in the Jomtien area also had a high take-up rate, so they launched a third project in the Wongamat area in the last quarter of 2011. Quality House Plc. just launched two new condominium projects in the Pattaya area and got good feedback from buyers. Sansiri plc. have recently launched their Baan Plai Haad development in wongmat and will be introducing a new project called the Base in Central Pattaya, aimed at the lower segment of the market.

Local developers in Pattaya have been rethinking their strategy in the market following the entrance of listed developers and the majority of them continue to achieve high take up rates. most local developers have been trying to develop their unit layouts and designs as well as project concepts with more interesting, family friendly features such as water parks, large lagoon swimming pools and themes for example the atlantis, Caribbean and amazon concepts. Strong competition is a positive factor for all buyers, as developers strive to bring their projects and levels of finishingtoahigherlevelinordertocompeteandretainmarketshare.



dEmANd

TAKE-up RATE of lAuNCHEd pRojECTS SINCE 2010


the average take-up rate in all locations of the Pattaya city market has increasedbyaround7%fromthefirstsixmonths,becausesomenewprojects from listed developers have had a high take-up rate; many condominium projects by local developers also received good feedback from thai and foreign buyers.

the average take-up rate for Wongamat was the highest in the second half of 2012, due to only two new projects being launched in the previous six months.

TheNaJomtienareahasshownthehighestincreasefromthefirstsixmonths of 2012, more than 10%, by reason of no new condominium projects being launched in the second half, while the other existing projects in the area also had high take-up rates during the second half of 2012.



foREIgN owNERSHIp / domESTIC dEmANd

in contrast to the last few years when foreign buyers were the mainstay of the Pattaya and Jomtien property scene, we are seeing a remarkable entry of thai buyers into all segments of the market. For many years the majority of the foreign-owned local development companies struggled to sell their 51% thai requirement, however, there is now a shift in as much as many thai listed developers coming to Pattaya achieve good take up ratesfromtheThaimarketanddonotcomeclosetofillingtheirforeignownership quota. the listed developers do not tend to focus their attention or marketing on the foreign segment, which when you look at many worldwide economies could be understandable.

the thai market is particularly brand-conscious and tends to follow well-known names such as LPn, Q House, major developments and other big names such as Sansiri. other not so well recognised local developers have discovered the attraction of adding a brand name hotel component to their project which adds kudos to their developments and in turn, sales to both thais and foreigners are encouraging.

the russian market continued its resilience during the second half of the year and it appears that they are less affected than other nations byglobal economic problems, though primarily they tend to buy into the lower end of the market. european, British and american buyers have

not shown the demand as in previous years, however, buyers from australia have been notable throughout 2012 due to preferable exchange rates.

emerging markets, such as india and China, have now started to put their toes into the water. We believe that these countries could quite possibly become the superpowers of the future when it comes to buying property in Pattaya.

throughout 2012 we witnessed a wide range of condominiums of all types and budgets entering the market and were amazed by the massive success of many and the incredible take-up rates in most areas. Certain projects almost sold out as soon as they were launched, others took several months to reach 50 to 70% sold; however, the overall 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.

2013 promises to be an interesting year as we witness many more project launches and will see many thousands of units due to be completed and handed over to excited buyers with great anticipation.

the average selling price per square metre in Wongamat remains the highest in all locations of Pattaya city. there were only two new projects launched in this area during the second half of 2012, allowing the area a greater exclusivity.

many large-scale projects were launched in the Jomtien area and most of them were focusing more on mid-range to low-end buyers, so the average price in this area is lowest in Pattaya city.

most of the condominium projects launched in Pattaya city during the past 18 months were focused more on the mid to low end of the market, so the average price of all locations is lower, compared to the price in 2010.


AvERAgE SEllINg pRICE pER Sq m By loCATIoN, H2 2012

pRICE


BEACH fRoNTAgE ANd HEIgHT of CoNdomINIumS EffECT oN pRICE, H2 2012

loCATIoNAvERAgE SEllINg pRICE

(THB / Sq m.)

AvERAgE SEllINg pRICE (THB / Sq m.)

BEACHfRoNT oTHER AREAHIgH RISE

(> 8 storey)

low RISE

(< 8 storey)

Wongamat 67,655 110,000 67,890 70,420 62,500

Pattaya 56,750 56,000 43,200

Pratumnak 56,000 58,950 51,650

Jomtien 46,100 67,500 43,000 61,300 42,000

na Jomtien 58,950 104,700 42,000 69,550 41,000

Beach frontage is the key driver in attracting higher prices for luxury condominiums. Prices can rise by over 100% when a project is located by the beach, especially in the Wongamat and na Jomtien areas.

the average selling price of a high-rise project is higher than that of a low-rise, due to the increased construction costs, and the privilege of

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 swimming pool or amenities similar to a resort will often command higher pricing.





the condominium market in Pattaya has remained robust over the last 18 months following the solid performance of 2011. Jomtien is the most popular area for many foreign and thai buyers looking to buy a second homeincloseproximitytothebeachatanaffordableprice.Mostoftheprojects launched throughout 2012 and in the coming months are focusing on the mid-price to low-end market.

Jomtien, in particular, runs the risk of oversupply to investors looking for strong yields and high capital appreciation. as a lifestyle choice and for an end-user, Jomtien can offer some very attractive properties ataffordableprices,particularlyalongJomtienSecondRoad.

Foreigners and thais are almost equal in number as buyers, which assists developers in selling out projects 100% based on quotas. However, the ongoing eu debt crisis issues will have a negative impact

on visitors coming from countries within the euro zone. emphasis should be placed by developers on the domestic market with an increasing disposable income and a new found fondness for Pattaya following the floodinginmanyareasin2011.

Some water park projects were under construction and expected to be completed in 2013 - 2014, such as Cartoon network amazone Pattaya, ramayana Water Park. in addition, nusasiri Plc. also plans to develop 300 rai of land along Sukhumvit road in na Jomtien, it plans to develop a new condo project and a new housing development. approximately 100 rai of land will be used to develop a water park and plaza called “the Grand kingdom”. When all projects are completed, many thai and foreign tourists will be attracted and the property market in Pattaya city could be more popular.

SummARy 2012 ANd foRECAST 2013



AppENdIX


zoNINg



Pattaya is a city located on the east coast of the Gulf of thailand about 165 km southeast of Bangkok. it is within, but not under the jurisdiction of 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, na klua, parts of Huai yai and nong Pla Lai. it is located within the heavily industrialized eastern Seaboard zone, along with Sri racha, Laem Chabang and Chon Buri. it has a population of 556,916 and covers an area of 49.37 Sq km.

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 the Buddha Hill headland (immediately south of Pattaya beach), and a smaller southern section covering the area to the east of Jomtien beach, 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-market location and a relatively new setting for condominium development.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 asian visitors, especially Chinese & korean. a large number of expats employees also prefer this location due to easy access of the main highways. the area of South Pattaya is popular among middle eastern, South asian and russian visitors. the area along Soi 15 Second road is enjoying resurgence in popularity amongst buyers.

3. pRATumNAKLocated to the south of Pattaya and bordering Jomtien, Pratumnak is considered a quiet residential area with a mix of luxury villas, high and low rise condominiums. Pratumnak area features two beaches, Cosy Beach and Haad u thong which are popular with russian and Scandinavian visitors. restrictions on condo development, limited availability 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 and restaurants. the area at the beginning of Jomtien is considered busier, 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 500–1,000 meters from the beach, this area extends to Ban amphoe beach in Sattahip district. Note: The report covers residential areas located on or west of Sukhumvit road.




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RESEARCHER:

thailandSurachet kongcheepSenior manager | researchEmAIl [email protected]

this report and other research materials may be found on our website at www.colliers.co.th. Questions related to information 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, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. any interested party should undertake their own inquiries as to the accuracy of the information. Colliers international excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising therefrom.ColliersInternationalisaworldwideaffiliationofindependentlyownedandoperatedcompanies.

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CollIERS INTERNATIoNAl THAIlANd mANAgEmENT TEAm Pattaya oFFiCemark Bowling | Senior Sales managerSupannee Starojitski | Senior Business development Manager/OfficeManager Hua Hin oFFiCeSunchai kooakachai | associate director ProJeCt SaLeS & marketinGmonchai orawongpaisan | associate director reSidentiaL SaLeS & LeaSinGnapaswan Chotephard | manager adViSory SerViCeS | HoSPitaLity Jean marc Garret | director retaiL SerViCeSasharawan Wachananont | associate director reSearCHSurachet kongcheep | Senior manager

oFFiCe SerViCeSnattawan radomyos | Senior manager

induStriaL SerViCeSnarumon rodsiravoraphat | associate director adViSory SerViCeSnapatr tienchutima | associate director

reaL eState manaGement SerViCeSthanasit tonsatcha | associate director

inVeStment SerViCeSnukarn Suwatikul | associate director Wasan rattanakijjanukul | Senior manager

VaLuation & adViSory SerViCeSPhachsanun Phormthananunta | director Wanida Suksuwan | associate director

Pattaya H2-2012

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