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Friday, 04 April 2008 |
source: The Nation April 4, 2008
The Stock Exchange of Thailand (SET) will flesh out and introduce a special
board for listing property funds in the second half, says ING Funds managing
director Maris Tarab.
"With 18 property funds worth more than Bt60 billion in the market, it's about
time a new trading category was created for property funds," he said, referring
to a stand-alone section like the one for warrants.
Something like it has already surfaced once. On the very first day the SET
launched its new website earlier this year, investors may have noticed a new
section devoted to property funds. According to tradition, it should have been
included in the main board's real-estate and property-development sector. The
new classification quickly disappeared.
Maris said the new set-up would help the flow of information for investors and
ease the approval process for property funds as far as it applied to operations.
"In Singapore [where real-estate investment trusts are traded on the Singapore
Exchange as securities along with warrants and derivatives], they are already
having fun trading," Maris said. ING Funds will soon be managing Thailand's
largest property fund. The Bt30-billion Bangkok Skytrain Extension Fund, which
has recently been finalised, is now looking for financial advisers.
Agreement has also been reached between the Nerula family, who owns the Sheraton
Grande Sukhumvit, and ING Funds to put the hotel into a property fund. If it is
added to the Quality Hospitality Leasehold Property Fund, the fund's value will
increase to Bt7 billion.
Maris said property funds, including both freehold and leasehold property funds,
had an average return of 9 per cent last year.
Liquidity and trading volume will improve in accordance with the size of the
funds. At present, it is not at all difficult for a retail investor to sell
Bt100,000 worth of property-fund units, he said.
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Friday, 04 April 2008 |
source: Bkk Post Apr 2 2008
The Consumer Protection Board has warned developers of housing projects that
they will face a jail term and a fine if they are found to have exaggerated
their projects in advertisements.
Nirot Charoenprakob, deputy secretary-general of the Consumer Protection Board,
said he recently called a meeting with developers of housing projects to warn
them not to exaggerate their projects following complaints from many consumers
that some developers had misled them into believing that mass transit projects
would pass their housing estates or shopping malls, hospitals or schools would
be built near their estates.
Such exaggerated advertisements have fooled many into buying expensive housing
or condominium units from these projects.
In many cases, it was found later that the public facilities being advertised
were being built several kilometres away from the housing projects.
Mr Nirot said the board allows developers to advertise their products, but that
is not enough if they don't explain in detail the distances between their
project and the mass transit system being built. Consumers should carefully
check all the information before purchasing any housing units, he said.
Developers of housing projects found exaggerating their advertisements are
liable to a jail term of 6 months and/or a maximum fine of 50,000 baht.
Theerawat Chantharasomboon, a legal expert on the board, also warned consumers
to be extra careful when receiving Sim cards for mobile phones given to them for
free as they might find themselves facing debt collection bills later.
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Friday, 04 April 2008 |
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Plus forced to scrap
top floors - 11 buildings violate height restrictions
source: Bkk Post Apr 3 2008
Plus Property Co, a subsidiary of Sansiri Plc, will remove the top floors at 11
of its Condo One low-rise condominiums to comply with city building limits.
Chief executive Mayta Chanchamcharat said the company would also refund down
payments to any unsatisfied buyers. The renovation and redesign could cost the
company up to 400 million baht.
''Since learning that [the buildings'] heights exceed the legal limit late last
year, we've talked with the authorities and tried to find the best solutions for
the buildings, which are in different stages of construction and have different
designs, to ensure the least impact on customers,'' said Mr Mayta.
He said the excess height was the result of new designs, which aimed to offer
customers more open space at affordable prices. Also to blame was a new
post-tension construction system that uses no beams but requires each floor to
be five centimetres thick.
As a result, the building heights exceed the 23-metre maximum for low-rises
under the Building Control Act. Buildings higher than 23 metres need high-rise
building construction permits.
But Plus could not change the permits easily since high-rise permits require a
different setback distance, the space from a building to the boundary of a plot,
which varies depending on its height, of at least six metres.
All of its problem buildings now built based on the low-rise regulation, which
requires a setback of only three metres.
As a result, Plus had no choice but to remove a floor. It has already sent
letters to the affected customers.
On the ninth floors, the company will remove walls and roofs and create
closed-dock floors. It will then revise the exterior decoration and apply
insulation and waterproofing to prevent heat and water from leaking into the
units on the eighth floors.
''The ninth floors are not allowed for anything, even a garden. We have to close
the stairs to the ninth floors as well,'' Mr Mayta said.
By law, a building's height is measured from the ground level of the ground
floor to the ceiling of the top floor. Anything higher cannot be used for any
purpose.
The 14 buildings on 11 sites, all under the Condo One brand, are located in:
Thong Lo, Sukhumvit 52, Sukhumvit 67, Sathon-Narathiwat, Sathon, Siam, Soho,
Ratchada-Lat Phrao, Lat Phrao Station, Lat Phrao 15 and Lat Phrao 18. All except
for the Lat Phrao Station and Ratchada-Lat Phrao have received environmental
impact assessment (EIA) approvals.
Only two buildings on the Sathon-Narathiwat site can maintain their ninth floors
because their permits could be changed for high-rise purposes.
Mr Mayta said the reconstruction would take a month, starting late last month,
and the process of applying for new construction and building use permits and
title deeds would take around two months.
By late June or July, it expects to transfer the units at eight sites, except
for Ratchada-Lat Phrao, which should be completed in September, and Lat Phrao
Station and Sathon-Narathiwat in December. It insisted it would compensate
customers for any delay.
From the total of 1,605 units worth a combined 3.95 billion baht with a total
saleable area of about 71,000 square metres, 171 units on the ninth floors with
a total of 7,500 sq m would be removed, Mr Mayta said.
Of the 171 units, 150 were sold and half of their buyers returned the units. In
these cases, Plus refunded the down payments, including 3% interest per year
plus maximum compensation.
''Under the contract, we will pay a 15% interest rate per year if we cannot
deliver the units as promised. In this case, we've paid for the returned units
even more than that,'' said Mr Mayta.
As about 130 units of the 11 sites have not been sold, the company agreed to
sell them at the same prices to ninth-floor customers who still want them,
although the prices had been raised.
However, more than half of the remaining units were at the Sathon-Narathiwat
site while others had only few units left. So the company needed to spend more
to buy resale units for ninth-floor buyers who still want them.
''The customers still want our units, as the prices they agreed to buy in the
past two years, at around 40,000 baht per sq m, are now around 20% lower than
the going market prices on average,'' he said.
All in all, lost income and the costs of removal, renovation, refunds and unit
replacement would total around 400 million baht, accounting for 10% of the total
value of the 11 projects. As a result, its gross profit margin this year might
be lower than the targeted 30%.
''This problem will inevitably affect our revenue realisation target this
year,'' he said. The company expects to realise a total of seven billion baht _
6.5 billion from residential sales and 500 million from fee-based businesses.
Mr Mayta said My Condo used a load-bearing wall system, which would help speed
up construction. Plus expects to transfer units in Sukhumvit 103 and Taksin
within this year, six months ahead of schedule. As a result, it revised its
revenue target to 7.2 billion baht.
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Friday, 04 April 2008 |
source: The Nation April 1, 2008
Coming up from the subway at Ratchadaphisek Station, one can see the Diamond
Ratchada condominium project, which has three buildings worth a combined Bt2
billion.
Property developer Diamond Ratchada, a subsidiary of Ch Chaiyaphatra
Construction, developed the three condo buildings. These include Building A,
with 432 units worth Bt1.4 billion; Building B, with 136 units worth Bt359
million; and Building C, with 119 units worth Bt308 million.
Ninety per cent of Building A has been sold, while half the units in Building B
and Building C have been sold.
Prices for units in Building A start at Bt79,000 per square metre, Bt58,000 in
Building B and Bt65,000 in Building C. The project has studio and one- and
two-bedroom units.
The developer has applied for an environmental-impact-assessment (EIA) licence.
However, if the project is not granted a licence, the company will refund all of
the money already paid by a customer, said Pattira Chaiyapatranum, a company
official.
She said the selling point of the project was the location - close to mass
transit - and facilities like a designated green area and a fitness centre.
The company is constructing the project under Article 39 (2) of the Building Act
and expects Buildings B and C to be completed next year, while Building A will
be finished in 2010.
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Friday, 04 April 2008 |
source: Bkk Post Apr 1 2008
Built condos without construction permits
The listed developer Prinsiri Plc (PRIN) admitted that it illegally started
construction on The Pulse Phahon Yothin 37 condominium as it did not have the
proper construction permits.
The Bangkok Metropolitan Administration forced the company to stop construction.
Now Prinsiri says it will belatedly follow the law and wait for the proper
permits to be approved.
''We admitted we were wrong as we didn't have construction permits before
starting construction,'' Pornprom Vongpivat, the company's vice-president for
finance, said yesterday.
The 636-million-baht Pulse Phahon Yothin 37 is designed to have two buildings
with a total of 308 units. Construction on Tower A was 40% complete, while Tower
B was 80% complete. Construction on both has been stopped.
''Like other condominium developers, we asked for construction approval via
Article 39 of the Building Control Act by submitting the plan of both buildings
with fewer than 79 units, and we would correct the design later,'' he said.
Prinsiri could not seek permits via Article 39 for both buildings together as
they would be located on the same plot and developed by one firm. As such, it
started building Tower B first while waiting for environmental impact assessment
(EIA) approval.
At the same time, it submitted an EIA for Tower A before seeking a construction
permit. However, it had to adjust the EIA report three times after waiting for
six months, and it still hasn't been approved.
''On the last submission, our management expected to obtain EIA approval and the
company would have transferred units to customers as promised in May this year.
So we started the construction of Tower A.''
Although Prinsiri did not receive EIA approval for Tower A, it refused to stop
building until the Bangkok Metropolitan Authority (BMA) ordered it to stop
building both towers. Tower A had no permit while Tower B was constructed with
an incorrect plan.
He said the BMA gave the company a chance to obtain a legal construction permit.
The company needed to submit a Khor. 1 under Article 21 for retroactive
construction approval, but would have to pay a fine of about three million baht
for building without a permit.
At the same time, the company would refund down payments, including compensation
of 7.1% interest per year, for any customers who wanted to return units. To
date, only 10 of 300 units were returned, said Mr Pornprom.
He said the company was clearing all its problems and was expected to finalise
the buildings within this month.
''From now on, we will definitely wait for the EIA approvals before starting
construction of new projects.''
Prinsiri has launched three new condominiums in 2008: a 422-million-baht project
in Pattaya Sai 2 with 280 units; a 1.4-billion-baht project in the Rat Burana
area of Bangkok with 555 units; and an 885-million-baht, 312-unit building on Si
Ayutthaya Road.
Another four condos planned for 2009 will be located in the Taksin and Pin Klao
areas, Pattaya Na Klua and on Kampaeng Petch Road.
Prinsiri will also open sales of four projects: in the Samakkee area with 325
units worth 954 million baht; Bang Bon with 160 units worth 796 million baht;
Vacharapol with 560 units worth 1.69 billion baht; and Krungthep Kreeta with 535
units worth 1.2 billion baht.
Mr Pornprom also said the company cancelled a new share offering worth 335
million baht at one baht apiece. Instead it will offer one warrants for every
three shares held by existing shareholders to compensate for a lower dividend
payment for 2007.
Shares of Prinsiri (PRIN) closed on the Stock Exchange of Thailand at 2.88 baht
yesterday, down six satang, in trade worth 670,000 baht.
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Friday, 04 April 2008 |
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source: The Nation March 26, 2008
Cuts in tax and fees make second-hand homes more attractive
The resale prices of homes have been rising between 10 per cent and 20 per cent
this year, thanks to the government's measures for driving property market
growth, industry experts said.
The measures are very attractive. Specific business tax has been reduced from
3.3 per cent to 0.1 per cent. The transfer fee has been reduced from 2 per cent
to 0.01 per cent. The mortgage registration fee is also down from 1 per cent to
0.01 per cent.
The measures are applicable to buyers of second-hand houses, who have had the
house registered for more than a year.
On March 4, the Cabinet said all properties in conformance with the Land Use law
and the Condominium law could also avail of these benefits. In other words, all
construction done by the owners themselves or by hired home-builders, or houses
that have been newly constructed on the owner's land, or property projects that
violate either one of the two laws, would not be able to avail of these
benefits.
Property brokers agree that the measures have significantly stimulated demand
and they expect the boom in the property industry to return, especially in
popular areas such as those located along the extended Skytrain route in the
On-nut area. Second-hand houses in the stretch from that area to the Samrong
area are also fetching good prices.
Brokers estimate that the number of second-hand and new condominiums which are
ready for possession will be significantly higher than last year. This
translates into an opportunity for consumers to see the projects before making a
decision. It is also expected that the growth in price per unit will rise to 20
per cent from 10 per cent last year.
The measures, which focus on all properties under the Land Use law and
Condominium law, also give many developers an opportunity to establish a new
business as second-hand home agents. Some of the major companies that have
already established such a business include Preuksa Real Estate, Asian Property
Development, LPN Development and Sansiri.
These developers have found that brands play an important role in consumers'
purchasing decision. Many companies have been working to create strong brand
awareness to take advantage of the business opportunity and maintain the value
of their assets.
Many brokers prefer to sell properties backed by strong brands. Not only are
they easy to sell, but buyers of these properties can also take advantage of the
government's new measures.
BCP Housing, a brokering company, serves as a second-hand home agent for all
second-hand Land and House branded houses.
The government's measures have also resulted in fiercer competition among
property brokers as major international brokers collaborating with local brokers
enter the market, Banyong Visatemongkolchai, president at Bangkok Commercial
Asset Management, said.
The latest international entrant is Harrison (Thailand) which recently signed a
memorandum of understanding with Century 21 to jointly sell second-hand
properties in Thailand for 25 years. Century 21 is an American company with
8,000 offices worldwide
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