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Guaranteed return on selected condo units

The Nation November 21, 2008 Sikhara Kotobuki Property, a joint venture between Japanowned Siam Kotobuki and Thai investors, has guaranteed a 6percent return on investment within five years for those who buy selected units at its Villa Sikhara at Thonglor 25 condominium project. The offer runs until the end of the year. Managing director Seita Hagiwara, who also owns Siam Kotobuki, said Sikhara Kotobuki Property was established this year with registered capital of Bt100 million to develop a condo project that will focus on investors who want to buy units and then rent them out. The company set aside Bt400 million to build the seven storey Villa Sikhara at Thonglor 25, which is worth Bt600 million, in March. Nearly 70 per cent of the investment sum is in the form of a loan from LH Bank, with the rest from the company's capital. The project began construction in March under an interim construction licence provided under Article 39 (2) of the Building Act. "We now are applying for a full construction licence. If we don't get the licence, we will pay back down payments to customers, plus interest," he said. He added that the project had already sold 60 per cent of the 64 units, which are available for between Bt98,000 and Bt104,000 per square metre. Almost all of its customers are investors who are buying for rental purposes. The company also offers rental management to its customer by guaranteeing a return on investment of 6 per cent within five years for 10 units currently on offer. It has set a rental price of Bt600 per square metre - for monthly rental income of Bt45,000 to Bt60,000 - for these units. Hagiwara said the company was very confident it could attract rental investors, especially Japanese who prefer to stay in the Sukhumvit Road area from Asoke junction to Thonglor. He said demand for residential properties from Japanese living in Bangkok had recorded strong growth. Although supply of residential units for rent now exceeds demand, most of what is available does not match with Japanese expatriates' requirements. The company believes the Villa Sikhara at Thonglor 25 project will, however, help fill this gap in the market when it is completed next August. The number of Japanese staying in Thailand currently exceeds 42,700, with up to 30,000 of them in Bangkok. Almost all have purchasing power to rent a serviced apartment for between Bt45,000 and Bt75,000 per month, said Hagiwara. Most Japanese expats stay between three and five years. "We believe that if investors buy our condominium project, it will generate a higher return for them than having a deposit account in the bank," he added.

 

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