Home-buyers in wait and watch mode

Prospective home-buyers have temporarily delayed their decision to buy residences in October amid concerns about the flood problem, according to a survey by The Nation early this week.
Meanwhile, many companies with operations in industrial areas affected by the floods or at risk of floods are looking for warehouses in safe locations to store their goods and production supplies, according to Jones Lang LaSalle, a professional services firm specialising in real estate.
Leading property firm Pruksa Real Estate’s chief financial officer Somboon Wasinchutchawal said that the number of customers visiting its residential projects dropped between 10 and 20 per cent since floods in the north of Bangkok.
“Our customers are concerned about the flood problem impacting their family members and they are not sure which location will face floods,” he said. However, he believed this will be a temporary delay until the flood problem is resolved.
“If the flood problem ends soon, it may drive up the market in the last two months of this year. If not, our pre-sales may fall short of our target,” he said.
Pruksa Real Estate targets pre-sales of Bt40 billion at the end of this year.
LPN Development’s managing director, Opas Sripayak, said that the number of prospective buyers visiting its projects dropped between 5-10 per cent in October this year because they are concerned about the flood problem.
However, this is a temporary situation. If the flooding ends, the market should recover, he said.
Sansiri’s executive vice president of the project management and marketing department, Suriya Wannabuit, also revealed that the number of visits to its residential projects had dropped an average of 10-20 per cent but that will not affect its pre-sales.
“Our pre-sales have continued to meet our target,” he said. However, he believed that this is a temporary situation and once the flood crisis ends, the market will return to normal.
All property firms are making efforts to help protect their residents from floods.
Asian Property Development has set up an investigation team to monitor its 60 residential projects in Bangkok and suburban areas, which so far have been free from floods.
LPN Development has set up sand embankments and concrete embankments to protect its machinery room in all its condominium projects.
Pruksa Real Estate has set up sand embankments at all its residential projects.
After the flood waters inundated six industrial estates in Ayutthaya, Pathum Thani, and Nonthaburi, there has been a sharp increase in the number of companies looking for warehouse space in Bangkok, where they can temporarily store their goods, production supply, and equipment on a short-term lease basis, Subyagorn Sansugtaweesub, head of industrial agency at Jones Lang LaSalle, said.
These companies are mainly semi-conductors and consumer goods manufacturers and logistics service providers whose facilities are located in areas that are flooded or face the risk of floods, including Ayutthaya, Pathum Thani and Nonthaburi.
Most of these companies are looking for warehouse space in locations that are currently identified as low-risk zones, especially in or near Bangkok. However, the supply of rental warehouses in the area is limited and hence demand for temporary warehouses is now shifting to provinces in the east and the south of Bangkok which have not yet been affected by floods and where warehouse supply remains available.
“Most companies are looking for the flexibility that would allow them to immediately relocate back to their facilities once the flood waters recede, or move to a new location if the warehouse they are temporarily renting becomes flooded,” Subyagorn explained.
“Although most owners offer their warehouses for long-term lease, many of them do not mind accepting short-term contracts due to higher rentals. Typical rental rates for warehouse space vary greatly between Bt80 and Bt170 per square metre per month, depending on quality and location. But short-term leases, coupled with the strong demand, for a temporary warehouse are 30–40 per cent higher,” said Subyagorn.