Residential Property

Residential Property  

 

Over the weekend, we made a field survey of four condo launches valued at a total of ~Bt9bn made by LPN, PS and SPALI. Take-up rates for all missed companies’ expectations. Among these projects, we noted that Supalai Elite Surawong, SPALI’s mid to high-end condo, had the highest take-up at 48%, with low-end condos slow at only 20-39%. We believe condo demand is still there, but is selective to projects/locations rather than across the board. Of all players, we prefer AP and SIRI.  

 

LPN: Lumpini Mixx Theparak-Srinakarin

 sold 39%, below target of 50-60%. This Bt1.8bn project is made up of seven 8-floor buildings with a total of 2,041 units. Unit price is Bt0.73mn-Bt1.24mn for rooms sized at 21.5-26.5 sqm. These are aimed at low-income earners in the area and at those who are now renting. The surrounding area offers little in this price range. What was a surprise was that sales for units carrying a higher price (above Bt1mn/unit) in towers A1-A3 beat out the budget condos in Tower 1-4 (below Bt1mn/unit). The project will be completed and revenue booked in 2016. 

 

PS: The Tree Elegance Tiwanon, take-up rate a low 20%. This 42-floor building is situated in old Nonthaburi town, ~800 meters from an MRT station (Purple Line), which is expected to start running in 2016. The 1,336 units worth Bt2.6bn have a grand lobby with attractive first-class facilities on the top floors (40-42). The condos target local residents. The majority are one-bedroom units, sized at 22-27sqm, and priced below Bt2mn. Only 40 units or 3% of the project are two-bedroom and sell for ~Bt4mn. Competitors include condos built earlier in the Bangkok area that are closer to MRT stations; these are priced above Bt2mn/unit. There is also a supply of TH and SDH on the other side of the river. This project will provide income by 2018. 

 

SPALI: Supalai Elite Surawong, take-up rate of 48%, misses target. This is a 30-floor condo offering 277 units worth Bt2.2bn located on Naret Road, 850 meters from the MRT Sam Yan station and near Bangkok’s Central Business District, i.e. Silom, Sathorn, Surawong, Sukhumvit and Asoke. It focuses on mid to high-end buyers, with unit size ranging from one bedroom to three (49.0-144.5 sqm) for Bt5.8mn-19.2mn. This works out to a selling price of Bt120-130K/sqm.  Income will be booked in 2018. 

 

SPALI: Supalai Loft Talat Phlu station, take-up rate of 38%, below target. This is SPALI’s largest condo this year, with 879 units worth Bt2.5bn. It is located 450 meters from Talat Phlu BTS station and only 200 meters from The Mall Ta Pra. It offers a wide range of room size, from studio to three bedrooms, priced at Bt2.3mn-Bt10.0mn/unit. Demand in the area has been absorbed by a number of earlier condos and there is little new demand. 

 

Our view. Based on the response to the weekend’s launches coupled with SIRI’s 

recent fire sale for two condos (The Line and The Monument) suggests that demand is 

holding up in the mid to high end, but low-end is weak. The focus now switches to AP, which will launch six projects worth Bt16.2bn on June 25-28. All are aimed at the mid to high end and we expect an average take-up rate of 50%. Of residential property stocks, we prefer AP and SIRI.