PROPERTY BANGKOK REPORT:
The housing situation in Thailand is looking bleak for homeowners who are paying mortgages off. More jobs are going and unemployment is starting to increase. The government has helped the workers by their 200baht per each social welfare worker fund but this is only a temporary measure. The Red shirts of Thaksin are mobilizing to upset the Country even more so the country could find themselves in more of a mess. Is it a good time to buy---only if you have adequate funds and buy a condo but do your homework first.
IS PROPERTY STILL A GOOD INVESTMENT IN BANGKOK AND THAILAND?
Amburaya plans B3bn projects on Koh Samui
Bangkok Post Mar 16, 2008
Joint venture to also build Bangkok hotel The hotel and resort developer Amburaya plans to develop luxury villas and a resort worth a total of 3 billion baht on Koh Samui, in a joint venture with Dubai-based Nakheel, as well as a hotel opposite the National Stadium in Bangkok, says managing director Ashwani Bajaj. Bajaj: Revival likely by year-end The W Koh Samui Retreat & Residences is being built on a 65-rai site on Laem Sai near Mae Nam Beach and Bo Phut in the north of the island. It will include a 75-villa resort with room rates between US$600 and $700 a night, with 30 of the villas on the 38-rai site offered for sale through leasehold. The remaining 27 rai of freehold land would be developed for 17 villas priced at 70 million to 205 million baht. To be available to foreign buyers, the units would be sold with 90-year leasehold contracts, said Mr Bajaj.
"The project targets high-end buyers, who have felt less impact from the downturn," he said. "Despite a sales launch in the third quarter of 2008, when the signs of recession started, four units were booked by foreign buyers." He said the company was not worried about sales as it had its own cashflow for the investment. The project also has financial backing from Siam Commercial Bank. "By the end of the year, everyone will have adjusted and when the situation improves, they will seek an opportunity," he said. "Property values are likely to pick up when construction is nearly complete." The company has been marketing at a niche target through CB Richard Ellis as the project's sole agent. It expects to sell 70% of the project before construction is completed and targets a 50% occupancy rate for the resort in the first year and 70% within three years.
Construction of the resort is 50% complete and is scheduled to be completed by the first quarter of 2010, when it will be operated by W Hotels, part of the Starwood chain. Construction of the 2-billion-baht residential element is expected to be completed in the second half of 2010.
TheWKoh Samui Retreat & Residences will feature 75 villas at US$600-700 a night, with 30 to be owned through leasehold. The Samui project will be developed by Amburaya Properties Koh Samui, which has registered capital of 71 million baht. The company was set up in 2002, when it started buying the plots. The joint-venture firm is 51% held by Amburaya and 49% by Nakheel. Mr Bajaj said the company was also waiting for approval for an environmental impact assessment and a construction permit for Holiday Inn Express Siam, a new hotel with 300 rooms on a leasehold plot on Rama I Road opposite the National Stadium.
Construction is scheduled to start by mid-2009 and operations to begin in 2011 with a room rate of 2,000 to 2,500 baht a night.
"Hospitality will come back next year. Optimistically, it should be by the end of the year," said Mr Bajaj, a 40-year-old Indian who is fluent in Thai. His business is based in Thailand with another investment in Delhi, and it has Crowne Plaza as a shareholder. Currently, Amburaya has two hotels: Bel-Aire Princess, a 160-room Dusit Thani franchise that has operated for 17 years on Sukhumvit Soi 5, and Sheraton Pattaya, a 150-room hotel that has operated for four years.
"Our properties have different targets - the Bangkok site is aimed at the corporate market, Pattaya at Mice business and Samui at couples," he said. During the first two months of the year, he said the occupancy rate at his hotels in Bangkok and Pattaya dropped to 70-75%, from 90-95% in the same period last year, due to unfavourable economic sentiment.
.LAND AREAS: 1 rai = 4 ngarn = 400 wah2 = 1600 m2; 1 talang wah = wah2 = 4 m2; 1 acre = 2.53 rai & 1 ha = 6.25 rai
To date foreigners may own
- a unit in a registered Condominium
- a building (as distinct from its land)
- a registered leasehold of up to 30 years for all types of titled land (and/or buildings).
- a company can purchase land and buildings only.
- more than 49% of a condominium unless in Company form.If BOI status different
- foreigners can own land being not over 49% in a proper Business orientated company but cannot secure a mortgage. Under BOI can buy.
- if you invest 40m baht you can buy 1 Rai of land in Thailand outright
A 30-year lease can be a good idea with right to renewal to a freehold purchase, or a Thai company (7 PARTNERS) can be established with Thai majority shareholders. Foreigners only own 49% shares in a company but there are restrictions and rules to this as you must have a business running and audited. The other way is to lease for 30 years with R of R or to use an Usufract or superficies to assist you. We can assist you to make sure your company is safeguarded. Remember if you need advice ask us.
Beware as its not the first time when foreign Business partners have been cheated by Thai partners. It has happened a lot. Never have a limited Partnership in Thailand and make sure the Lawyer you use is straight and unbiased towards you? Go to www.chiangmailaw.com for any help or www.thaiexpatlaw.com
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WHEN TO PAY FOR YOUR PROPERTY
1/. Never pay deposit or booking fee over the Internet. See what you buy first
2/. Look at progress payment reports when, & how much
3/. Check the builder before you sign
4/. Talk to neighbours & others about the Moo Baan or buildings.
5/. Have a person on site to inspect interim work for you
6/. Do not be bullied into progress payments before work completed. If so then some middle man is getting his cut.
7/. When in doubt ask. Seek advice
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If you have a property to rent, sell or lease in Thailand then WRITE TO US as we can advertise for you in our hardcopy news in Chiangmai . BANGKOK REAL ESTATE Please go to : www.bangkokrealty.biz