The banks of the mighty Chao Phraya are bursting with new luxury residential projects, but are overseas investors – put off by the political unrest – prepared to take the plunge?
Although the military takeover in May last year largely affected the residential market in Bangkok, prompting many developers to postpone new project launch in the first half of 2014, the high-end segment, especially on the city’s snaking Chao Phraya River, has been surprisingly resilient.
“The luxury condominium market wasn’t significantly impacted by political instability in Thailand,” says Risinee Sarikaputra, director of research and consultancy at property advisory firm Knight Frank Thailand. “This can be proven by the increasing prices of luxury condominiums in Bangkok.”
She adds that approximately 74 percent of luxury riverside units on the market had been sold by the start of December. The majority of these have been mixed-use mega-projects, with cumulative financing amounting to billions of dollars, including Menam Residences, the 350-unit Capella Hotel and Residences; and the 20-acre IconSiam complex on the upscale Charoen Nakhon Road, by joint venture partners Magnolia Quality Development Corporation, Siam Piwat and Charoen Pokhphan Group. IconSiam has to date also set a domestic development record, with a total project value of THB50 billion (USD1.54 billion).
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“Chao Phraya River is the final development frontier in Bangkok and it would be naive not to pursue these opportunities,” says Billion P. Lai, chief executive of Canapaya Property Co. Ltd, which last month began construction of its 224-unit ‘super luxury’ condominium in the Rama 3 area along the river, with a total project value of THB4 billion (USD122 million).
Another luxury property that has recently caught the attention of affluent local and foreign investors alike is the multibillion Chao Phraya Estate project by Country Group Development. The prime riverside estate will include the Four Seasons Private Residences Bangkok at Chao Phraya,
The colossal budgets of all these riverfront developments have seemingly made an impact on land prices in the city, and an upcoming tax policy on land usage could potentially create more demand for high-end residential projects in the city centre. The resale value of these properties, in particular, is expected significantly increase in the coming years.
“Rising land prices mean that a new condominium project will be more expensive than the completed condominium buildings,” Risinee says. “This will help push up the resale condominium prices in the prime locations such as Chao Phraya.”
She predicts that investors will see this as a lucrative opportunity since properties in the prime districts of Bangkok offer not only better yield, but also stronger capital appreciation.
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Mark Price, CEO of property services firm Savills Thailand, believes there are two major reasons why the Chao Phraya area has become the preferred investment location of the country’s top developers: the availability of prime redevelopment plots and the improvements in transport facilities.
“There are very few prime sites for development within the central business district, whereas there are many redevelopment sites alongside the river,” he explains. “Secondly, aside from the views and old Bangkok river life, which in itself is appealing, particularly to foreign buyers, the mass transportation links are being extended which will afford better connectivity between the river and the traditional CBD.”
Demand for these upcoming projects comes from both foreign and Thai buyers, with a 20:80 ratio, according to Risinee, and given the anticipated improved political conditions this year, she expects the level of foreign investment to reach 30 percent in 2015.
Still, some remain cautious about the sustainability of demand from international buyers, citing the market’s long-term ability to cope with instability, as well as the Kingdom’s lingering political woes.
“Currently, we are not seeing the overseas demand we need in order to support the volume of new stock coming to market,” Price says. “Although it seems Mainland Chinese buyers are a new trend, we still find that some of our clients in markets like Hong Kong and Singapore are wary of the political situation and are sitting on the sidelines for the time being.
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“The current government, whilst perceived by the traditional Bangkok elite, to be doing a good ‘clean-up job’ is still viewed with scepticism overseas. There is a need for the military government to roll out a major public relations programme aimed at foreign investors in order to give them the confidence to return to the local market.”
Overseas investment aside – and given the political situation remains relatively stable – the robust and increasing prices of luxury residential developments situated along the banks of the Chao Phraya River, coupled with strong demand from local investors, look set to aid the domestic market and its overall recovery.
“Location is the core of a great residential development and it is difficult to find land plots in a prime location for development nowadays,” Risinee says. “This is why the Chao Phraya is the new location of Bangkok luxury.”
5 NEW LUXURY RESIDENCES NEAR THE CHAO PHRAYA RIVER
What we say: Exclusively marketed by CBRE Thailand, the low-density Canapaya Residences began construction this January after being launched in April last year, and is set to be completed in Q4 2017. Claimed to be the first real ‘super luxury’ condominium project on Rama 3 Road, the property is easily accessible to the central business district as well as the city’s outskirts, via its own private yacht berthing facilities. The developer also notes that its location was chosen in strict adherence to Feng Shui design principles, dubbing the 57-storey project a ‘Metroasis’. Unit prices average at THB220,000 (USD6,700) per sqm.
What they say: “Our tagline is ‘Time for Life’. Bangkok is well known for its traffic jams, but being a part of a well-designed mixed-use development in the city centre means that our residents are able to earn back more personal time and spending it with family and friends, rather than being stuck in traffic,” according to Billion P. Lai, CEO of Canapaya Property Co. Ltd.
Magnolias Waterfront Residences at IconSiam
What we say: Less than a quarter since its launch in August 2014, the 70-storey Magnolias Waterfront Residences, slated for completion in 2017, had already sold 90 percent of its freehold units, with 20 percent of buyers coming from overseas, mostly from Singapore and Hong Kong. Future amenities of the IconSiam development are dubbed the ‘Seven Wonders at IconSiam’, comprising upscale residential, retail, leisure and mixed-use facilities, including the country’s first direct fibre-optic internet connection for a residential tower. Prices start from THB230,000 (USD7,200) per sqm on average.
What they say: “We fully expect our customers to benchmark our product promise with the finest residences available in New York, London, Tokyo, or Shanghai. For the first time ever in Thailand, we are able to combine three elements that propel these residences into a special global class: luxury design with world-class engineering; luxury lifestyle reflected in the building and individual residences; and a luxury environment located within IconSiam’s 20-acre plot,” says Thanawan Chaiwatana, managing director of The ICONSIAM Residences Corporation Ltd.
Menam Residences
What we say: Taking its name after the native term for river, the 294-unit Menam Residences, which was launched in November 2012, has been a hit with domestic and foreign buyers. Nearly 30 percent completed this month, the 54-storey luxury residential freehold tower has already sold more than 85 percent of its units, including 10 percent to non-Thai buyers, and some room types are no longer available. Scheduled to be completed in December 2016, Menam’s one-bedroom units, ranging from 44 sqm to 60 sqm in size, start from THB160,000 (USD4,000) per sqm, whilst a penthouse unit sells as high as THB220,000 (USD6,700) per sqm.
What they say: “Menam Residences’ design is inspired by the grandeur of the Chao Phraya River. The building takes inspiration from the form of a flying dragon in the sky and is destined to become one of the new landmarks on the riverbank,” comments Daecha Tangsin, CEO of Menam Residences Co. Ltd. “It also has a universal design concept, which means it is fully accessible and useable by adults, children and the elderly, as well as people with disabilities; five-star hotel service in partnership with the adjacent the Ramada Plaza Menam Riverside Hotel; and triple facilities, including lush gardens on the ground floor, recreational amenities on the 10th level, and a Sky Lounge on the 41st floor.”
U Delight Residence Riverfront Rama 3
What we say: Launched in February 2014, the freehold project began construction last November with a total value of THB3.73 billion (USD114 million). It will benefit from being situated in a desirable section of the Chao Phraya River along the main Rama III Road that has views of the Rama IV and Bhumibol bridges. With an expected completion date in June next year, the development has already sold more than half of its units, four percent of which were acquired by foreign investors. A 34-sqm unit averages THB90,000 (USD2,750) per sqm, with the price range starting at THB2.49 million (USD75,000).
What they say: “Our concept is inspired by the dream of the middle class who wish to own a prime condominium along Chao Phraya River,” says Apichart Siriphati, vice president for marketing of Grand Unity Development Co. Ltd. “The project consists of a big green area at the front entrance at the riverside. Our team planted different varieties of trees there since starting the project and hopefully the area will become a rich forest for all residents in years to come.”
Chao Phraya Estate
What we say: Just announced last month, the 355-unit riverfront property situated on Charoen Krung 64 in Sathorn features all corner units on a prime plot covering a total of 14.2 acres. Chao Phraya Estate will include the 73-storey branded residential tower with world-class facilities such as a private river lounge and amenities deck; the Capella Hotel Bangkok; and the Four Seasons Hotel Bangkok at Chao Phraya, plus the Four Seasons Club occupying Levels 64 through 66.
What they say: “With a global design team and consultants led by masterplan specialist Hamiltons International, the Four Seasons Private Residences Bangkok at Chao Phraya River development at the heart of Chao Phraya Estate is slated to become one of Bangkok’s newest ultra-luxury landmarks. More details of the estate, including its total development budget, will be announced in the coming weeks,” says Country Group’s CEO Ben Taechaubol.
Source: www.property-report.com
