It’s time for Invest:MaN to begin the exploration of the land surrounding the upcoming Lam Sali Interchange Station, located on Ramkhamhaeng Road, an important area of Eastern Bangkok. Let’s see how the land price will vary once the future skytrain projects – orange, yellow and brown lines come to meet at this intersection. Prices are expected to skyrocket once the projects materialise.
Lam Sali Station will serve as an interchanging station that converges 3 Skytrain lines: the orange line, ranges from the Cultural Center to Minburi stations, the yellow line from Ratchada – Ladprao intersection up until Srinakarin. The brown line starts from Khae Rai intersection to Lam Sali, along Ngamwongwan Road, connecting with Kaset-Nawamin Road, along the Prasert-Manukit Road. Construction progress is currently underway as the pedestrian skywalk and ground structure have already been established. Both orange and yellow stations are expected to be up and running around 2023 – 2024. As for the brown line, construction has not yet begun.
New condominium projects waiting in the wing! The absorption rate is also flexible. The trend continues to accelerate.
Invest:MaN sends a team to explore the subject area. Firstly, we have observed the trend of the residential condominium projects within the scope of 1 kilometer radius around the station. It is discovered that there are currently 5 projects which are either under construction or being sold. These projects are all operated by big-time property development companies namely; Pruksa, Origin, Sena and Chao Phraya. These projects combined for a total of 3,900 units approximately. Roughly 2,700 units, or 70% are either reserved or purchased. This results in the absorption rate of about 25 units per month, a very positive figure from the business standpoint. At this rate, it seems that the sales acceleration will continue to increase as the skytrain projects move closer to completion. Sales are projected to be ongoing for the next three and a half years. Nevertheless, the skytrain factor is likely to influence more purchases, hence, cut short the sales period to two years. In terms of the selling price, projects located next to the station are selling for 100,000 – 130,000 baht per square meter at the moment. Projects sitting on the main road of Ramkhamhaeng are selling for 80,000 – 100,000 baht per square meter. Finally, projects located in the alley within a radius of 200 meters are selling for 60,000 – 80,000 baht per square meter, which is still considered to be a competitive pricing in the market.
There are still many beautiful empty plots deeper into the alley, an opportunity for small time developers to swoop into the market.
According to the land use analysis of the surrounding area around Lam Sali, lands are designated as either orange or red colors zoning, which are classified as medium dense residential areas, with FAR 4.5 : 1 and commercial purposes with FAR 7 : 1 respectively. Empty plots are still available for development, particularly land located into the alleys. For development of residential condominiums, the selling price should start no more than 60,000 baht per square meter, in order to be competitive in the market. The distance of about 500 meters from the station which could be easily accessed by taxi is acceptable. Projects of these descriptions should be attractive among workers with the salary level of 25,000 baht and above. Based on our project development assumption, the cost of acquiring land within the alley for such development should not exceed 100,000 baht per square wah, in order for the project to be feasible. On the other hand, the land price should not exceed 300,000 baht per square wah, for development projects along the Ramkhamhaeng Road.
The land offering price is 1.5 times ahead of the development cost.
From the past appraisal data of land located on the Ramkhamhaeng-Srinakarin Road during the years 2017 – 2018, the appraised value ranges from 180,000 up to 280,000 baht per square wah. Land located in the alley was previously appraised from 65,000 to 95,000 baht per square wah.
From the land price survey, land located on the Ramkhamhaeng Road is offered for sale at approximately 390,000 to 470,000 baht per square wah, considered to be relatively high especially when compared with the cost of land with the potential of development at the minimum of 300,000 baht per square wah.
Meanwhile, the offering price of land located in the alley ranges from 65,000 to 190,000 baht per square wah. Similarly, the general offering prices are high when considering that the cost of land for development is determined at 100,000 baht per squ5are wah. In this regard, feasibility studies must be conducted in consideration of individual factors for the project development’s objectives, land width, land size, color zone plan, usage limitations, before any acquisition of land.
Overall, we rate the Lam Sali area as an area with great development potential, mainly due to the soon to come skytrain projects.
