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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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