Pattaya City Condominium market rePort | H2 2012

H2 2012 | condominium

Pattaya City Condominium market rePort

THAIlANd

Pattaya City Condominium Market

HIgHlIgHTS
Just 590 units were completed and transferred in 2012. the total of completed condominium units registered at the department of Land at the end of 2012 is nearly 46,700 units. the relatively small amount of units completed and transferred is primarily due to the low number of project launches in the wake of the worst of the economic crisis when developers held back on the number of launches, which has since risen exponentially between 2011 & 2012. approximately 7,250 newly-launched units were introduced in the second half of 2012. the average take-up rate in all locations of the Pattaya city market increased by around 7% from the first six months. the average price of all projects in all locations in 2012 is around 13% lower than the price in 2011, this is because of the many mid-ranges to low-end condo projects launched in 2012. the new Jomtien Second road will remain the most densely developed area throughout the municipality during 2012, with many more projects scheduled for the second half.

mARKET INdICAToRS
2011 / 2012 Supply lAuNCHES pRICES TAKE-up

NEw lAuNCHEd CoNdomINIum uNIT IN pATTAyA CITy

NEwly lAuNCHEd IN H2 2012

the number of newly-launched units in the second half of 2012 decreased from the total launched during the first half of 2012. This was due to the huge volume of condominium units being launched during the past year and the first half of 2012 which are still available on the market, causing many developers to hold back on their launches of new projects. in addition, most new condominium projects launched in the second half are smaller developments of approximately 250 units.
Source : Colliers international thailand research

www.colliers.co.th

Pattaya city condominium rePort market | H2 2012

Supply
HISToRICAl Supply

CumulATIvE Supply IN BANgKoK

Source : department of Land and Colliers international thailand

at the end of 2012, the total supply of condominium units amounted to approximately 46,700. During the year 2012 a rather low figure of just 590 units were completed and transferred, primarily due to the low number of launches after the economic crisis. a lot of condominium projects postponed their completion dates to 2013, due to the construction worker shortage. Completions of condominium

units in 2012 were the lowest in the past few years. With the aSean region opening up in 2015 its expected that many migrant workers from neighbouring countries will step in and fill the existing labour shortages within the construction industry.

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Pattaya city condominium rePort market | H2 2012

Supply By zoNE, H2 2012

CumulATIvE Supply IN BANgKoK

Source : Colliers international thailand research

Pattaya proved to be the most popular area for the condominium market in the years prior to 2000; however from 2001 onwards the Jomtien area has displayed continual growth due to the abundance of remaining beachfront and secondary development sites. Pattaya, to the contrary, now faces a scarcity of development sites and those that are available are becoming prohibitively expensive. during 2005, the Pattaya City administration initiated improvements to be made along thappraya road and introduced a new Jomtien Second road extension. the road was

designed to alleviate traffic congestion from the beach road and now has many sois linking both roads together. many condominium projects were launched along Jomtien Second road in the Jomtien area and most of them are large-scale projects, so approximately 15,400 units were scheduled to be completed during 2013 - 2015.

CoNdomINIum Supply By loCATIoN, H2 2012

the largest condominium supply is in Jomtien, representing about 41% of the total, followed by Pattaya with approximately 31%. many large-scale condominium projects were launched in the Jomtien area, so approximately 15,400 units are scheduled to be completed in 2015 in the Jomtien area. around 10,100 condominium units were expected to be added to the market during 2013 - 2015 in the Pratumnak area. The pattern of overall real estate development is different for Jomtien and Pattaya, as Pattaya contains the vast majority of both hotels and commercial developments, which leaves very limited land supply for large-scale condominiums.

Source : Colliers international thailand research

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Pattaya city condominium rePort market | H2 2012 fuTuRE Supply

CumulATIvE fuTuRE Supply By yEAR ANd loCATIoN

Source: Colliers international thailand research note: developers expected completion dates

according to developers almost 14,000 units are scheduled to be completed in 2013; more than 3,900 units in Jomtien was the highest number of all locations, followed by Pratumnak with around 3,400 units.

Jomtien still holds the largest share of the condominium market going into the future with nearly 15,400 units expected to be completed during 2013 - 2015.

NEwly-lAuNCHEd uNITS By loCATIoN ANd HAlf yEAR

Source : Colliers international thailand research

New launches for H2 2012 decreased from the first half by around 30% and no new projects were launched in the na Jomtien area. Jomtien is still most fashionable for developers, due to nearly 3,000 units being launched in the second half of 2012, the highest of all locations. the majority of condominium projects launched in the past two years have focused on mid-price to low-end buyers, though there are some

exceptions concentrated in the upper end of the market, also reporting strong sales figures. Mainstream buyers, both foreign and Thai, are mostly looking for an affordable holiday home, not far from the beach, with good facilities and trusted management from a recognised developer with a good track record.

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Pattaya city condominium rePort market | H2 2012 lISTEd CompANIES IN THE pATTAyA mARKET
many listed companies were focusing more on the areas outside Bangkok, Pattaya, Chiang mai, khon kaen, khao yai, Cha am, Hua Hin and udon thani. Some listed developers launched their projects over the past several years, while some listed developers launched their first projects in Pattaya during 2011 - 2012. most developers in Pattaya are local companies and they are very successful in the market. However, some condominium projects in Pattaya were also developed by listed developers from Bangkok. raimon Land has been successful in Pattaya over the past three years with three projects under their belt. Prinsiri Plc. also launched a condominium project behind the avenue Pattaya over the past few years. major development launched a high-rise project in the na Jomtien area achieving a high take-up rate last year. in addition, some hotel management groups also launched condominium projects in joint ventures with condominium developers, at which the selling point is a condominium project with five-star hotel management and facilities. The most famous, capable developer in 2011 was LPn development, as they launched their first project in the Banglamung area along Sukhumvit road which was sold out in few months. their second project in the Jomtien area also had a high take-up rate, so they launched a third project in the Wongamat area in the last quarter of 2011. Quality House Plc. just launched two new condominium projects in the Pattaya area and got good feedback from buyers. Sansiri plc. have recently launched their Baan Plai Haad development in wongmat and will be introducing a new project called the Base in Central Pattaya, aimed at the lower segment of the market. Local developers in Pattaya have been rethinking their strategy in the market following the entrance of listed developers and the majority of them continue to achieve high take up rates. most local developers have been trying to develop their unit layouts and designs as well as project concepts with more interesting, family friendly features such as water parks, large lagoon swimming pools and themes for example the atlantis, Caribbean and amazon concepts. Strong competition is a positive factor for all buyers, as developers strive to bring their projects and levels of finishing to a higher level in order to compete and retain market share.

dEmANd
TAKE-up RATE of lAuNCHEd pRojECTS SINCE 2010

CumulATIvE Supply IN BANgKoK CumulATIvE Supply IN BANgKoK

Source : Colliers international thailand research

the average take-up rate in all locations of the Pattaya city market has increased by around 7% from the first six months, because some new projects from listed developers have had a high take-up rate; many condominium projects by local developers also received good feedback from thai and foreign buyers. the average take-up rate for Wongamat was the highest in the second half of 2012, due to only two new projects being launched in the previous six months.

The Na Jomtien area has shown the highest increase from the first six months of 2012, more than 10%, by reason of no new condominium projects being launched in the second half, while the other existing projects in the area also had high take-up rates during the second half of 2012.

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Pattaya city condominium rePort market | H2 2012 foREIgN owNERSHIp / domESTIC dEmANd
in contrast to the last few years when foreign buyers were the mainstay of the Pattaya and Jomtien property scene, we are seeing a remarkable entry of thai buyers into all segments of the market. For many years the majority of the foreign-owned local development companies struggled to sell their 51% thai requirement, however, there is now a shift in as much as many thai listed developers coming to Pattaya achieve good take up rates from the Thai market and do not come close to filling their foreign ownership quota. the listed developers do not tend to focus their attention or marketing on the foreign segment, which when you look at many worldwide economies could be understandable. the thai market is particularly brand-conscious and tends to follow well-known names such as LPn, Q House, major developments and other big names such as Sansiri. other not so well recognised local developers have discovered the attraction of adding a brand name hotel component to their project which adds kudos to their developments and in turn, sales to both thais and foreigners are encouraging. not shown the demand as in previous years, however, buyers from australia have been notable throughout 2012 due to preferable exchange rates. emerging markets, such as india and China, have now started to put their toes into the water. We believe that these countries could quite possibly become the superpowers of the future when it comes to buying property in Pattaya. throughout 2012 we witnessed a wide range of condominiums of all types and budgets entering the market and were amazed by the massive success of many and the incredible take-up rates in most areas. Certain projects almost sold out as soon as they were launched, others took several months to reach 50 to 70% sold; however, the overall results are very encouraging for the market in general and there seems to be no stopping the immense popularity that Pattaya holds for both investors and end users.

the russian market continued its resilience during the second half of the 2013 promises to be an interesting year as we witness many more year and it appears that they are less affected than other nations by project launches and will see many thousands of units due to be global economic problems, though primarily they tend to buy into the completed and handed over to excited buyers with great anticipation. lower end of the market. european, British and american buyers have

pRICE
AvERAgE SEllINg pRICE pER Sq m By loCATIoN, H2 2012

Source : Colliers international thailand research

the average selling price per square metre in Wongamat remains the highest in all locations of Pattaya city. there were only two new projects launched in this area during the second half of 2012, allowing the area a greater exclusivity. many large-scale projects were launched in the Jomtien area and most of them were focusing more on mid-range to low-end buyers, so the average price in this area is lowest in Pattaya city.

most of the condominium projects launched in Pattaya city during the past 18 months were focused more on the mid to low end of the market, so the average price of all locations is lower, compared to the price in 2010.

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Pattaya city condominium rePort market | H2 2012 BEACH fRoNTAgE ANd HEIgHT of CoNdomINIumS EffECT oN pRICE, H2 2012
AvERAgE SEllINg pRICE (THB / Sq m.) BEACHfRoNT 110,000 oTHER AREA 67,890 HIgH RISE (> 8 storey) 70,420 56,000 58,950 67,500 104,700 43,000 42,000 61,300 69,550 low RISE (< 8 storey) 62,500 43,200 51,650 42,000 41,000

loCATIoN Wongamat Pattaya Pratumnak Jomtien na Jomtien

AvERAgE SEllINg pRICE (THB / Sq m.) 67,655 56,750 56,000 46,100 58,950

Source : Colliers international thailand research

Beach frontage is the key driver in attracting higher prices for luxury condominiums. Prices can rise by over 100% when a project is located by the beach, especially in the Wongamat and na Jomtien areas. the average selling price of a high-rise project is higher than that of a low-rise, due to the increased construction costs, and the privilege of

having a sea view from all units also attracts a premium. However, certain low-rise projects with an emphasis on facilities such as a large themed lagoon swimming pool or amenities similar to a resort will often command higher pricing.

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Pattaya city condominium rePort market | H2 2012 SummARy 2012 ANd foRECAST 2013
the condominium market in Pattaya has remained robust over the last 18 months following the solid performance of 2011. Jomtien is the most popular area for many foreign and thai buyers looking to buy a second home in close proximity to the beach at an affordable price. Most of the projects launched throughout 2012 and in the coming months are focusing on the mid-price to low-end market. on visitors coming from countries within the euro zone. emphasis should be placed by developers on the domestic market with an increasing disposable income and a new found fondness for Pattaya following the flooding in many areas in 2011.

Some water park projects were under construction and expected to be completed in 2013 - 2014, such as Cartoon network amazone Pattaya, Jomtien, in particular, runs the risk of oversupply to investors looking for ramayana Water Park. in addition, nusasiri Plc. also plans to develop strong yields and high capital appreciation. as a lifestyle choice and for 300 rai of land along Sukhumvit road in na Jomtien, it plans to develop an end-user, Jomtien can offer some very attractive properties at a new condo project and a new housing development. approximately affordable prices, particularly along Jomtien Second Road. 100 rai of land will be used to develop a water park and plaza called the Grand kingdom. When all projects are completed, many thai and foreign Foreigners and thais are almost equal in number as buyers, which tourists will be attracted and the property market in Pattaya city could be assists developers in selling out projects 100% based on quotas. more popular. However, the ongoing eu debt crisis issues will have a negative impact

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Pattaya city condominium rePort market | H2 2012

AppENdIX

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Pattaya city condominium rePort market | H2 2012 zoNINg

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Pattaya city condominium rePort market | H2 2012

Pattaya is a city located on the east coast of the Gulf of thailand about 165 km southeast of Bangkok. it is within, but not under the jurisdiction of amphoe Bang Lamung in the province of Chonburi. the city of Pattaya is a self-governing municipality that covers the whole tambon of nong Prue, na klua, parts of Huai yai and nong Pla Lai. it is located within the heavily industrialized eastern Seaboard zone, along with Sri racha, Laem Chabang and Chon Buri. it has a population of 556,916 and covers an area of 49.37 Sq km. Pattaya city occupies most of the coastline of Banglamung (one of the 11 districts that comprise Chonburi Province). it is divided into a larger northern section that spans the areas to the east of naklua beach (the northernmost beach) and Pattaya beach (the main beach), plus the Buddha Hill headland (immediately south of Pattaya beach), and a smaller southern section covering the area to the east of Jomtien beach, which lies directly south of Buddha Hill. the report covers the Pattaya city area as well as na Jomtien and a distinction is made between Pattaya city and Pattaya bay which constitutes part of the overall area under consideration. Pattaya city can be divided into five zones for the purposes of this report. Below is a summary of each zone.

5. NA jomTIEN
na Jomtien beach is south of Jomtien and partially does not have a beachfront road and is less developed as a result. the main road connection is Sukhumvit road, which is located between 5001,000 meters from the beach, this area extends to Ban amphoe beach in Sattahip district. Note: The report covers residential areas located on or west of Sukhumvit road.

1. woNg AmAT
this is the area to the north of Pattaya nua and is considered a more peaceful, up-market location and a relatively new setting for condominium development. Wong Amat beach is considered the finest in Pattaya and boasts several of the higher end luxury hotels and condominiums. Limited beachfront land should ensure that prices increase in tandem with the popularity of this area from both thais and foreigners.

2. pATTAyA
this area is considered as the city centre. the section of beach from Central road south to the harbour runs adjacent the core of Pattayas abundant nightlife area. Pattaya nua and klang are the areas favoured by asian visitors, especially Chinese & korean. a large number of expats employees also prefer this location due to easy access of the main highways. the area of South Pattaya is popular among middle eastern, South asian and russian visitors. the area along Soi 15 Second road is enjoying resurgence in popularity amongst buyers.

3. pRATumNAK
Located to the south of Pattaya and bordering Jomtien, Pratumnak is considered a quiet residential area with a mix of luxury villas, high and low rise condominiums. Pratumnak area features two beaches, Cosy Beach and Haad u thong which are popular with russian and Scandinavian visitors. restrictions on condo development, limited availability of land and desirability of the area should ensure that property prices in Pratumnak will steadily rise.

4. jomTIEN

Jomtien beach is about 1 km south of Pratumnak Hill. the locale is home to many high-rise condominiums, beach front hotels, shops and restaurants. the area at the beginning of Jomtien is considered busier, while the area located at the end of this beach known as na Jomtien is considered to be much more peaceful and less congested.

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Pattaya city condominium rePort market | H2 2012 CollIERS INTERNATIoNAl THAIlANd mANAgEmENT TEAm
Pattaya oFFiCe mark Bowling | Senior Sales manager Supannee Starojitski | Senior Business development Manager / Office Manager Hua Hin oFFiCe Sunchai kooakachai | associate director ProJeCt SaLeS & marketinG monchai orawongpaisan | associate director reSidentiaL SaLeS & LeaSinG napaswan Chotephard | manager adViSory SerViCeS | HoSPitaLity Jean marc Garret | director retaiL SerViCeS asharawan Wachananont | associate director reSearCH Surachet kongcheep | Senior manager oFFiCe SerViCeS nattawan radomyos | Senior manager induStriaL SerViCeS narumon rodsiravoraphat | associate director adViSory SerViCeS napatr tienchutima | associate director reaL eState manaGement SerViCeS thanasit tonsatcha | associate director inVeStment SerViCeS nukarn Suwatikul | associate director Wasan rattanakijjanukul | Senior manager VaLuation & adViSory SerViCeS Phachsanun Phormthananunta | director Wanida Suksuwan | associate director

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RESEARCHER: thailand Surachet kongcheep Senior manager | research EmAIl surachet.kongcheep@colliers.com

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