H2 2010 - H1 2011
Supply
lAuNCHES
pRICES
TAKE-up
Pattaya City Condominium market rePort
THAIlANd
www.colliers.co.th
Pattaya City Condominium MarketHIgHlIgHTS Moreunitswerelaunchedontothemarketforthefirsthalfoftheyearcomparedwith the whole of 2010.
Around1,000unitsweresuppliedinPattayaforH12011.
AlargelisteddevelopermadeastrongvoteofconfidenceinPattayacitywithitsfirst launchinthecitywithasignificantnumberofunits.
ThesecondhomemarketisbeingtargetedforH1inparticularthroughlargescale developments.
ThePattayagrowthstorycontinuesapace.
mARKET INdICAToRS
H1 2011 (Half Year) | condominium
Newlylaunchedunitsinthefirsthalf of 2011 were significantlyhigher than the total launched in thewholeof lastyear.Thiswasdue to two new projects beinglaunchedinthefirsthalfof2011with more than 1,400 units perproject.
Source : Colliers international thailand research
NEwly lAuNCHEd IN H1 2011
NEw lAuNCHES powER pATTAyA mARKET
PattaYa citY condominium rePort market|H12011(HAlfYeAr)
COLLIERS INTERNATIONAL | P. 2
dESCRIpTIoNPattaya isacity locatedontheeastcoastoftheGulf of Thailand about 165 km southeast ofBangkok.Itiswithin,butnotunderthejurisdictionof Amphoe Bang lamung in the province ofChonburi.ThecityofPattaya isaself-governingmunicipality that covers the whole Tambon ofNongPrue,NaKlua,partsofHuaiYaiandNongPlalai.Itislocatedwithintheheavilyindustrializedeastern Seaboard zone, along with Sri racha,laemChabangandChonBuri.Ithasapopulationof556,916andcoversanareaof49.37Sqkm.
Pattaya city occupies most of the coastline ofBanglamung(oneofthe11districtsthatcompriseChonburi Province). It is divided into a largernorthernsectionthatspanstheareastotheeastof Naklua beach (themost northern beach) andPattayabeach(themainbeach),plustheBuddhaHillheadland(immediatelysouthofPattayabeach),and a smaller southern section covering the area totheeastofJomtienbeach,which liesdirectlysouthofBuddhaHill.
The reportcoversthePattayacityareaaswell asNaJomtienandadistinction is made between Pattaya city and Pattaya bay whichconstitutespartoftheoverallareaunderconsideration.
HISToRICAl Supply
Source:DepartmentoflandandColliersInternationalThailandNote:figuresnowincludeNaJomtienarea
AttheendofH12011,thetotalsupplyamountstoapproximately45,600units. forH1 2011,more than 1,000 unitswere added to supply andnearly2,900unitsarescheduledtobecompletedinthesecondhalfof2011.
Thefoundationforthecondominiummarketoccurredin1992withthedevelopment of large scale condotel style properties such as MetroJomtien. Thiswas the result of theCondominiumAct in 1989whichopened the door for the development of high rise residences. InitialdemandcamefromforeignbuyersasThaisdidnotprovidethesignificant
enginefordemandastheydonow,althoughmanywerebeginningtobenefitfromtheeconomicboomandconsequentlypurchasingproperty.The next surge in growthwas the result of the economic boom thatpeaked in 1997 before the fall. Amore limited but sustained level ofsupplycameontothemarketinthefirstfewyearsofthenewcenturybutpickedupinthelatterhalfofthelastdecade.
Supply
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PattaYa citY condominium rePort market|H12011(HAlfYeAr)
CumulATIvE Supply IN BANgKoK
COLLIERS INTERNATIONAL | P. 4
TheinitialsurgeinsupplyinthecitywasdominatedbyPattaya.Howeverin1997asignificantadditionwasmadetoJomtiensupplybytheJomtienBeachCondominiums(knownasrimhat).Thetwoareascontinuedtobethemaintarget fordevelopmentsupto thepresentday.JomtienhassinceovertakenPattayaduetothegreateravailabilityofland,especiallyclosetothesea.ThePratumnakandWongamatareashavedevelopedona lower trajectory of growth over this period. from the year 2005
onwards, Wongamat has increased dramatically with the addition ofnearly 3,000 units in the past six years and is now on a par withPratumnak. Na Jomtien has been the laggard, primarily due to theabsenceofaroadrunningalongthecoastandavailable land inmoreaccessiblelocationsinthecity.
The largest condominium supply is in the Jomtien area, representingabout41%ofthetotal,followedbyPattayaarea,atabout31%.
CondominiumprojectsinthePattayaareaarepredominantlylowriseinnatureandtheaveragenumberofunitsperprojectisapproximately140,whichissimilartoprojectsintheWongamatandPratumnakareas.ThefigureforJomtienareaisaround360unitsasmostoftheprojectsarehigh rise buildings. The pattern of overall real estate development isdifferent forPattayaandJomtien.Pattayacontainsthe lion’sshareofbothhotelandretailprojectsleavinglimitedsizedlandspaceavailableforlargerscalecondominiums.Jomtienwaslargelysparedthisprocessinthe1980’sand90’sandasaresultsizabletractsoflandwereandstillremainavailableforlargerscaleprojects.
Source : Colliers international thailand research
Source : Colliers international thailand research
Supply By zoNE
CoNdomINIum Supply By loCATIoN, H1 2011
PattaYa citY condominium rePort market|H12011(HAlfYeAr)
CumulATIvE fuTuRE Supply By yEAR ANd loCATIoN
NEwly lAuNCHEd uNITS IN H1 2011 By loCATIoN ANd HAlf yEAR
COLLIERS INTERNATIONAL | P. 5
Source : Colliers international thailand research
Source : Colliers international thailand research
Morethan2,900unitsarescheduledtobecompletedandtransferredduringthesecondhalfof2011whichrepresentsanincreaseofjustover6% in total supply and more than 4,100 units are scheduled to becompleted and transferred in 2012. During the years 2011 – 2013
PratumnakissettobethemainplayerinthePattayacitycondominiummarket,duetomanyprojectsbeing launched in thepast threeyears.Thisareaisespeciallypopularforthesurgingrussianmarket.Alsomostprojectsarelocatedonthehillwithgoodviewsoverlookingthebeach.
NewlaunchesforH12011weremorethandoublefromthesecondhalfof last year. The Wongamat area contained by far the most highestfollowedbyJomtienarea.ThemainreasonforthenumberforWongamatis due to thenewproject by lPNDevelopmentPlc. Jomtien’s strongshowingisaresultofthelaunchofalargenewprojectbyA.D.HouseCo.,ltd.
lPNDevelopmentPlc. launched itsfirst ever condominiumproject inPattaya city on Sukhumvit road in the Wongamat area. lumpini
CondotownNorthPattaya–Sukhumvithadanofficiallaunchon9May2011inwhichtheysoldapproximately500unitsor35%fromthetotal1,442unitsonthefirstday.Allunitsintheprojectareonebedroomwithonesizeof22.5sqmandastartingpriceofTHB699,000perunit.Inadditiontothistheyplanto launchanewproject intheJomtienarealocatedonthebeachfrontroadinOctoberandlaterforanotherprojectin Wongamat area.
fuTuRE Supply
PattaYa citY condominium rePort market|H12011(HAlfYeAr)
COLLIERS INTERNATIONAL | P. 6
Source : Colliers international thailand research
CoNdomINIum pRojECTS wITH HoTEl mANAgEmENT
dEmANd
ThetrendforresidenceswithhotelmanagementorahotelcomponentistakingshapeinPattayacitywithfourprojectsonthemarketadoptingthismethod.Theadditionofsuchabrandaddskudostothedevelopmentaswellassignificantfacilitiesandservicesavailabletounitownersandthosewhochoosetorent.Theupshotisthatcapitalvaluesarelikelytoincrease with the addition of a hotel element.
No. pRojECT NAmE loCATIoN
1 MovenpickWhiteSandBeachPattaya na Jomtien
2 AmariresidencePattaya Pratumnak
3 CentaraAvenueresidence&SuitesPattaya Pattaya
4 ParkPlazaWaterfront Pratumnak
Theaveragetake-uprateforthewholeofPattayacityhasincreasedbyanaverageofapproximately2%fromthesecondhalfof2010.Thetake-uprateofthreelocationshasincreasedbyanaverageofapproximately12.5%fromthesecondhalfof2010andtheothertwolocations,JomtienandPattayarecordedsignificantdecreases.
During thefirst sixmonths, threenewprojectswere launched in thePattayaareawithapproximately700unitsandmostofthemwereputonthemarketinthelasttwomonthsoffirsthalfof2011.Thishadadirectnegativeimpactonaveragetakeupratesinthearea.AnewprojectwaslaunchedintheJomtienareacontainingmorethan1,500units,which
madetheaveragetake-uprateintheareafallbymorethan18%
TheaveragetakeuprateinWongamatareawasthehighestwithover70%whichresultedfromthesuccessfullaunchofthefirstPattayacityprojectfromlPNDevelopmenteventhoughthisprojecthasatotalofmore than 1,400 units.
NonewprojectwaslaunchedintheNaJomtienareabuttheconstructionprogress of the current developments in this area has shown goodprogress which has lead to greater confidence leading to improvedsales.
Source : Colliers international thailand research
TAKE-up RATE of lAuNCHEd pRojECTS SINCE 2010
PattaYa citY condominium rePort market|H12011(HAlfYeAr)
COLLIERS INTERNATIONAL | P. 7
AddITIoN of populATIoN ovER 65 IN SElECTEd CouNTRIES
Source:UnitedNationspopulationDivisionandColliersInternationalThailandresearch
Significantnumbersofretireeswillcomefromcountriesthatarelargemarkets for the Pattaya tourist industry and consequently potentialresidents in the future. With lower government pension provisionsexpectedintheeraofthegreyingbabyboomers,manyinthewestmaychoosetolivetheirremainingdaysinacountryofferingthemabetter
standardoflivinginawarmerclimate.Therussianmarket,alreadythestrongestone intermsof foreignbuyerscouldseefurthergrowthonbackofanincreaseinretireesinthesecondhalfofthedecade.ThelureoftropicalPattayacouldbetheprefectantidotetothesevererussianwinters.
IncontrasttotheBangkokmarket,foreignerstakeupthelion’sshareoflowerendcondominiumsinPattayaandJomtienasmanyareretireeswith limitedfinancialresourcesandforeignBangkokresidents lookingforaninexpensiveholidayhome.Thishasmeantthatforunitsbelow2millionBaht there isoftenadual pricing structure resulting fromthe49% foreigner owner limitations. In the newly emerging upmarketresidentialmarketsofWongamatandPratumnak, localbuyersarethemain driver and there are far fewer dual pricing policies.Often localbuyersareattractedbybetterpaymenttermscomparedtoforeignbuyersandthereforethedevelopersfinancingstructurecanhaveasignificantbearingonthelocalbuyingcomponent.
Therussianmarketisaparticularlystrongoneandisfurtherincreasing.Manycomefromtheeasternpartofthecountrywherecountries likeThailandare incloserproximitythantheBlackSea,GreeceorTurkeywhicharepopularwithMuscovitesforexample.Manyintheeastworkintheenergyandminingindustriesandcanearnagreatdealofmoney.Due to the generally poor level of englishmost are attracted by therussianlanguageinfrastructureofPattayacitywithmenus,signsandinformation in theCyrillic alphabet aswell asrussian speakers, bothnative and thai to assist them.
foREIgN owNERSHIp / domESTIC dEmANd
PattaYa citY condominium rePort market|H12011(HAlfYeAr)
COLLIERS INTERNATIONAL | P. 8
PattayaaswellasotherresorttownsinThailandhavebeenhamperedbythestrengthoftheThaiBahtagainstcurrenciesofthevastmajorityof foreign demand. However in the past sixmonths currencies haverecoveredalthoughthefraughtfinancialsituationofmanygovernmentsineuropeaswellastheUSAcanaddmorepressureontheeuroanddollarinthefuture.TheAustraliandollarhasbuckedthetrendwithits
strong commodities sector enhancing thevalue of the currency. ThisgoessomewaytoexplainingwhymoreAustraliansarebuyingresortpropertythroughoutThailand,includingPattaya,aswellastheprohibitiveprices of coastal real estate in Australia. The average price for anapartmentontheGoldCoastinQ22011is16.5millionbaht.
It is interesting to note that the beginning of significant foreigncondominiumbuyingwhichtookoffin1992wasalsoatimeofaverystrongThai baht againstmanymajor currencies.TheAsianfinancial
CrisisledtoaseveredepreciationofmanycurrenciesinAsiaandevennowinThailandexchangerateshavestillnotreturnedfullytopre-Asiancrisislevelsdespitethefinancialtravailsinthepastfewyears.
Source: Bank of thailand and Colliers international thailand research
CHANgE IN CuRRENCy To THAI BAHT
HISToRICAl pERSpECTIvE
Q4 1992 1 uS$ = 25.5 THAI BAHT 1 uK pouNd = 39 THAI BAHT
PattaYa citY condominium rePort market|H12011(HAlfYeAr)
COLLIERS INTERNATIONAL | P. 9
AvERAgE SEllINg pRICE of ToTAl uNITS By loCATIoN, AS of H1 2011
Theaverage selling price inWongamat remains thehighest, althoughthisdroppedfromthesecondhalfof2010byaround17%,duetotheaveragesellingpriceofthenewcondominiumprojectbylPNwhichhasbeenofferedforapproximatelyTHB37,000persqm,astheprojectislocated on Sukhumvit road and is more than one kilometre from the beach.TheaveragesellingpriceinotherlocationsincreasedfromH2
2011byaround0.5–10%.TheaveragesellingpriceinJomtienshowedthehighest increasedueto A.D.House launching itsnewprojectonJomtienSai2road,witheveryunitintheprojecthavingaseaviewfromitselevatedpositionwithanaveragesellingpriceofaroundTHB56,000persqm.
Beachfrontage isthekeydriverfor luxurycondominiums.Pricescanrise by over 100%when located by the beach, especially in Jomtienwhere many projects are located some distance from the shoreline.Thereisalsoapremiumforhighrisecondominiumsastheviewfrom
theunitisespeciallyimportantforbuyersofaresortproperty.InrelationtoBangkokmost Pattaya city developments use greater quantities ofglass in their construction in order to make the most of the surroundings.
pRICE
BEACH fRoNTAgE ANd HEIgHT of CoNdomINIumS AffECT oN pRICE H1 2011
Source: Colliers international thailand research
Source : Colliers international thailand research
loCATIoNAvERAgE SEllINg pRICE
(THB / SQ m.)
AvERAgE SEllINg pRICE (THB / SQ m.)
BEACHfRoNT oTHER AREAHIgH RISE
(> 8 storey)
low RISE
(< 8 storey)
Wongamat 70,000 96,000 50,000 67,000 85,000
Pattaya 68,200 72,500 66,150
Pratumnak 65,000 71,500 65,000
Jomtien 55,150 122,000 48,500 66,750 43,500
na Jomtien 60,400 115,500 36,800 125,000 44,500
PattaYa citY condominium rePort market|H12011(HAlfYeAr)
COLLIERS INTERNATIONAL | P. 10
TheentranceoflPNDevelopmentinthePattayacitymarketishighlysignificant.Whileanumberof listeddevelopershavebeeninvolvedinthecity,lPN isthe largestcompany intermsofturnoverandmarketcapitalisationtodoso.WhatismorethecompanywasinstrumentalinthetrendofbringingdownaverageunitsizesinBangkok,targetingafirsttimebuyer’smarketthatwasbeyondreachbeforeandhassincebeenemulatedindifferentformsbymanyotherdevelopers.InthecaseofPattayacitythemarket ispredominantlyBangkokians looking foracheapsecondhomeforweekends,althoughdemandalsocomesfromthe localmarketand foreigners.OtherBangkokbaseddevelopersarelikelytofollow.
Manyfactorsarefalling intoplacethatwillcontinuetopropelPattayaforward as an international city rather than simply a resort. GrowingdemandfromforeignersinvibrantvisitormarketssuchasrussiaandIndia-MoreThaisnowpurchasingpropertyasasecondhome-Theincreasing industrialization of Chonburi province and Pattaya as apotentialcommercialhub-futureretailandentertainmentdevelopmentthatwillenhancetheattractivenessofthecity.
In previous reportsColliers Internationalwasbullish about the futureprospects of the city over the course of the next ten years. There isnothingtoalterthisviewpointandinfacteventsinthepastsixmonthsgosomewaytostrengtheningthatpositiveoutlook.
foRECAST
PattaYa citY condominium rePort market|H12011(HAlfYeAr)
COLLIERS INTERNATIONAL | P. 11
AppENdIX
PattaYa citY condominium rePort market|H12011(HAlfYeAr)
zoNINg
COLLIERS INTERNATIONAL | P. 12
PattaYa citY condominium rePort market|H12011(HAlfYeAr)
1. woNg AmATThisistheareatothenorthofPattayaNua.Itisconsideredapeaceful,moreup-marketlocationandisarelativelynewareaforcondominiumdevelopment. 2. pATTAyAThisarea isconsideredasthecitycentre.ThesectionofbeachfromCentralroadsouthtotheharbourrunsadjacentthecoreofPattaya’sabundant nightlife area. Many sections of the beach are covered byrenteddeckchairsrunbylocalbeveragevendorsduringdaylighthours.PattayaNuaandKlangaretheareasfavouredbyAsianvisitors,especiallyChineseandKorean,whiletheareaofSouthPattayaispopularamongmiddle eastern, South asian and russian visitors.
3. pRATumNAKThisareacoversthemainthoroughfareconnectingPattayaandJomtienBeach. Many upscale restaurants have recently sprung up alongThappraya road. This area is very popular with Scandinavian andrussianvisitors.PartofPratumnakcontainshillswheremoreexclusivestyleaccommodationcanbefound.
4. jomTIENJomtienbeachisabout1kmsouthofPratumnakHill.Thelocaleishometo many high-rise condominiums, beach front hotels, shops andrestaurants.TheareaatthebeginningofJomtien isconsideredbusy,whilethearealocatedattheendofthisbeachisconsideredpeacefulandtranquilwithlesstrafficpassingthrough.
5. NA jomTIENNaJomtienbeachissouthofJomtienanddoesnothaveabeachfrontroad and is less developed as a result .Themain road connection isSukhumvitroad,whichislocatedbetween500–1,000metersfromthebeach,thisareaextendstoBangSaraybeachinSattahipdistrict. Note: The report covers residential areas located on or west of Sukhumvit road.
Pattayacitycanbedividedintofourzonesforthepurposesofthisreport.Belowisasummaryofeachzone.
COLLIERS INTERNATIONAL | P. 13
PattaYa citY condominium rePort market|H12011(HAlfYeAr)
PattaYa citY condominium rePort market|H12011(HAlfYeAr)
CollIERS INTERNATIoNAl THAIlANd mANAgEmENT TEAm PATTAYAOffICemark Bowling | Senior Sales managerSupanneeStarojitski|SeniorBusinessDevelopmentManager/OfficeManager
reTAIlSerVICeSasharawan Wachananont | Senior manager OffICe&INDUSTrIAlSerVICeSNarumonrodsiravoraphat|SeniorManager ADVISOrYSerVICeS|HOSPITAlITYJean marc Garret | director PrOJeCTSAleS&MArKeTINGMonchaiOrawongpaisan|SeniorManager reSIDeNTIAlSAleS&leASINGSunatelawskul|SeniorManager ADVISOrYSerVICeSNapatrTienchutima|AssociateDirector
reAleSTATeMANAGeMeNTSerVICeSBandidChayintu|AssociateDirector
INVeSTMeNTSerVICeSnukarn Suwatikul | associate director Wasanrattanakijjanukul|SeniorManager
reSeArCHAntonyPicon|AssociateDirectorSurachetKongcheep|SeniorManager
VAlUATION&ADVISOrYSerVICeSnicholas Brown | associate directorPhachsanun Phormthananunta | associate director SantipongKreemaha|SeniorManager Wanida Suksuwan | manager
collierS international tHailand:
Bangkok Office 17/fPloenchitCenter, 2Sukhumvitroad,Klongtoey,Bangkok 10110 thailandTEl+6626567000fAX+6626567111 EmAIl [email protected] Pattaya Office 519/4-5,PattayaSecondroad(OppositeCentralfestivalPattayaBeach),Nongprue,Banglamung,Chonburi20150TEl+6638427771fAX+6638427772 EmAIl [email protected]
RESEARCHER:
thailandAntonyPiconassociate director | researchEmAIl [email protected]
RESEARCHER:
thailandSurachetKongcheepSenior manager | researchEmAIl [email protected]
512officesin61countries on6continents
Thisreportandotherresearchmaterialsmaybefoundonourwebsiteatwww.colliers.co.th.QuestionsrelatedtoinformationhereinshouldbedirectedtotheresearchDepartmentatthenumberindicatedabove.ThisdocumenthasbeenpreparedbyColliersInternationalforadvertisingandgeneralinformationonly.ColliersInternationalmakesnoguarantees,representationsorwarrantiesofanykind,expressedorimplied,regardingtheinformationincluding,butnotlimitedto,warrantiesofcontent,accuracyandreliability.Anyinterestedpartyshouldundertaketheirowninquiriesastotheaccuracyoftheinformation.ColliersInternationalexcludesunequivocallyallinferredorimpliedterms,conditionsandwarrantiesarisingoutofthisdocumentandexcludesallliabilityforlossanddamagesarisingtherefrom.ColliersInternationalisaworldwideaffiliationofindependentlyownedandoperatedcompanies.
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