FRIDAY, March 29, 2024
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Top firms budget Bt50 bn for land

Top firms budget Bt50 bn for land

The top 10 listed property firms have continued to expand their investments, budgeting more than Bt50 billion to buy undeveloped land over the next two years, and focusing on locations that have never faced flooding.


 

Sansiri has budgeted Bt6 billion to buy undeveloped land this year for 44 new projects worth Bt46 billion over the next two years. Pruksa Real Estate, meanwhile, has budgeted Bt6 billion for land to serve the same time period, and Land & Houses’ budget is Bt5 billion (for others, see the graphic).
Most of these firms are focusing on land in flood-free locations such as the central business districts of Bangkok and upcountry. Areas that have suffered flooding are a lower priority, depending on demand.
In the CBDs, demand has driven land prices up 510 per cent this year, especially in areas close to mass transit or main roads. Outside the capital, a similar effect is seen in Pattaya, Hua Hin, Phuket and Chiang Mai.
Business Housing Association president Issara Boonyoung said demand for land near the transit system or main roads was growing strongly because of property firms’ concerns about the new Bangkok city plan originally set to be announced in May, though it may be delayed until next year. The main aspect that will directly affect the property market is the new rule that high-rise buildings, including condominiums, must be constructed in locations served by roads at least 12 metres wide. If the building has utilisation space over 2,000 metres, the road must be wider than 16 metres. Because of these upcoming restrictions, developers are scrambling to launch new condo projects this year before the amended city plan comes into force.
Meanwhile, demand for land to develop low-rise homes – detached houses, duplexes and townhouses – has continued to grow, but as these areas are typically far from the CBDs, they need to be close to expressways or the new roads linking the suburbs with central Bangkok.
Pairat Monthapan, president of Thai Valuers Association, said that although purchase of undeveloped land was speeding up in the current first half, demand was lower than in the same period last year because of reluctance to buy land that could face flooding again. This is driving price increases in flood-free areas.
For example, land on Sukhumvit Road is seeing rising demand although in some locations prices are above Bt300,000 per square wah (Bt75,000 per square metre). Rama II Road is also seeing price rises of 510 per cent over last year.
Meanwhile, the price of land that was hit by last year’s flood is stable because landlords have held on to it, unwilling to sell at lower than pre-flood prices, Pairat said.
“If the government has the means to manage flooding, we believe the prices of land in locations that were flooded will not drop, especially in areas that will be served by the new mass-transit routes such as Bang Yai-Bang Sue on the Purple Line,” he said.

Pattaya, Hua Hin prices rising
Meanwhile outside Bangkok and its suburbs, demand for land in tourist destinations such as Pattaya, Hua Hin and Phuket is seeing strong growth as listed property firms expand their investment.
According to Knight Frank Thailand research, the new supply of condominiums in Pattaya last year was 10,547 units in 24 projects. The selling price of seaview condos in North Pattaya ranges from Bt104,000 to Bt150,000 per square metre, whereas sea-view condos in Jomtien range from Bt75,000Bt120,000 per square metre.
Meanwhile, the price of land in Pattaya has increased by 510 per cent from an average of Bt800,000 a rai (Bt5 million per hectare) to between Bt900,000 and Bt1 million per rai in locations close to main roads. In sea-view locations, the prices are even higher.
Hua Hin land prices have also increased by 510 per cent, especially close to the beach. In that area of northern Prachuap Khiri Khan province, demand is spreading beyond Hua Hin district itself because of limited availability of undeveloped land. Such areas as Kho Tao and Pran Buri district now are seeing increased demand, according to a survey by The Nation.
Most buyers of undeveloped land in Pattaya and Hua Hin now are listed property firms rather than local developers, according to property agencies with experience in both locations.

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