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Thonburi-region

Analysis of land value and condominium prices along the Southern Purple Line following the expropriation of the train, driving up land prices on the Thonburi region

InvestMan would like to introduce our readers to the Southern Purple Line Train Project, from Tao Poon – Rat Burana. The royal decree has been announced 6 August, 2020 late last year and is currently a subject of debate among affected people – between people who currently live in the area subjected for expropriation and are forced to relocate and those who live in the neighborhood which will benefit from better public transportation and the increasing property values. particularly Thonburi regions. Nevertheless, we would like to put this issue aside and go into detail of this project which is set to go ahead. Also analyze the trend of land’s prices along the train stations for this project.  The project is expected to begin construction in August 2021 and launch by 2026.   Project details Project route –       The route of this Purple Line Project will start at the MRT’s interchange, Chalong Ratchatham at Tao Poon Station which is an elevated road along Kor.8 road across Bang Sue canal then continue into an underground structure under the Army Ordnance Department. The route then leads to the right onto Military Road passing through Kiakkai intersection, then entering Samsen Road. The route will turn left onto Phra Sumen Road through Bowon Niwet Temple and Ratchadamnoen Road before entering Mahachai Road. The route then leads under the Chao Phraya River near Phra Prajadhipok Bridge before entering Prajadhipok Road which leads under Wong-wian-Yai Intersection. The line will then lead back to above the ground elevated structure running along the middle of Suksawat Road through Dao Khanong intersection, then cross the bridge over Rama 2 intersection, passing through Pracha Uthit intersection. The path will cross the Chalerm Mahanakorn Expressway and end at Khru Nai. Total project distance of 23.6 kilometers:        12.6 kilometers underground structure        11 kilometers above elevated structure Stations:  10 underground stations – Ratthasapa Station Si Yan Station Wachira Payaban Station National Library Station Bang Khun Phrom Station Pan Fah Station Sam Yot Station Saphan Phutt Station Wongwian Yai Station Samre Station 7 elevated stations – Dao Khanong Station Bang Pakaeo Station Bang Pakok Station Rama 9 Bridge Station Rat Burana Station Phra Pradaeng Station Khru Nai Station Train garage         Located adjacent to Kanchanaphisek Road next to Bang Phli-Suksawat toll gate on the inbound side Parking building       “Park and Ride” buildings located at Bang Pakok Station and Rat Burana Station, accommodating the total of 3,850 cars Our team had conducted a survey in the several areas we had determined the estimated prices of land in 2017-2019. Rise in land prices        Our team had conducted a survey in the several areas we had determined the estimated prices of land in 2017-2019 before the official announcement of the project. By selecting the 3 stations that we have data to analyze and compare before and after the announcement of the project. Let’s see how much prices have gone up. Land prices around the station: – Bang Pa Kaew station (adjacent to Suksawat Road), land price as appraised in 2017, 115,000 baht / square wa. Currently, the price is 140,000-170,000 baht / square wa. Value appreciated by 22%-28%. – Bang Pa Kok station (adjacent to Suksawat Road), land price as appraised in 2017, 120,000 baht / square wa. Currently, the price is 150,000-180,000 baht / square wa. Value appreciated by 25%-42%. – Bang Kru Nai station(adjacent to Suksawat Road), land price as appraised in 2017, 70,000 baht / square wa. Currently, the price is 80,000-100,000 baht / square wa. Value appreciated by 5.7%-6.7%. Overall, land prices have increased by 32% over the past three years, or at a rate of 11% per year, which is considered to be a significant growth in values.          From the survey, it is found that new condominiums within the area of the 3 analyzed stations which are set to be launched for sale as per below. – Dao Ka Nong station (new project), land price as appraised in 2017, 67,000-69,000 baht / square meter. Currently, the price is 70,000-75,000 baht / square meter. Value appreciated by 4.5%-8.7%. – Bang Pa Kaew Nong station, land price as appraised in 2017, 63,000-67,000 baht / square meter. Currently, the price is 67,000-70,000 baht / square meter. Value appreciated by 4.4%-6.3%. – Bang Pa Kok station, land price as appraised in 2017, 70,000-75,000 baht / square meter. Currently, the price is 74,000-80,000 baht / square meter. Value appreciated by 5.7%-6.7%.          As you can see, the difference in prices for land and condominium is as significant, which is largely due to the announcement of this upcoming project. Credit to news and information sources : Mass Rapid Transit Authority of Thailand

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Songkhla Lake

3 Billion Baht!! – Construction Project of Bridge over Songkhla Lake

Recently, there has been an emerging news that has caught many people’s attention reported by Bangkok Biz; the possibility of constructing a new bridge over Songkhla Lake connecting Songkhla and Phatthalung Provinces. At last, the Ministry of Transport has issued an update on the current status and progress of the project. InvestMaN would like to take this opportunity to inform our readers more about the brief details of this project. Background story           At present, along Songkhla Lake, there are two bridges connecting the 2 provinces; Cha-Lae Bridge and Chalerm Phrakiat 80th Anniversary Bridge. The former is old and deteriorated. Due to the long distance between the two bridges, spanning about 50 kilometers apart, people living in the area at the middle of the lake would take up to six hours to travel. Therefore, the local residents and local authorities have been calling for a new bridge to be built over the lake which would ease their convenience. Project details Connect between Koh Yai Sub-district, Kra Sae Sin District, Songkhla Province and Chong Than Sub-district, Khao Chaison District, Phatthalung Province. The total distance is not yet known. Construction budget identified at approximately 3 billion baht. The environmental impact study is currently underway and is expected to be completed by April 2021 before construction.  The design is assumed to be a suspension bridge.  Thank you Google Map Impact This new bridge will be able to reduce the travel distance by more than 80 kilometers, reducing the travel time by approximately 2 hours. Help promote tourism attraction of Songkhla Lake area for both Phatthalung and Songkhla sides. Create more jobs and incomes for the locals.         This project will definitely enhance transportation routes between the two provinces which have experienced an increase in the number of traveling vehicles in recent years. This is considered to be very good news for the people of Songkhla and Phatthalung. It has been a long time since the region has seen a project of this caliber. Let’s also hope that it will help stimulate the tourism industry in both provinces which have so much to offer when it comes to tourist attractions with abundant natural resources. Before going forward with the public project’s construction of this magnitude, an in-depth study of the project feasibility must be performed in order to ensure the intended outcome, a possible impact on the environmental aspect. These studies include an analysis of the project location and site selection. Prospec Appraisal is happy to provide services and consultations for land appraisal or even business valuation for owners. Moreover, we also offer additional service on project feasibility study and site selection.  Credit source of information : Bangkokbiznews

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Hotel businesses

Hotel businesses – Industry most affected by COVID-19

InvestMaN takes our readers to get to know more about hotel business – the most worrying business right now since the beginning of COVID-19 pandemic, as reported by source – Bangkok Biz Thailand is one of the most famous destinations for international tourists. It is therefore not surprising that Thailand relies so heavily on the tourism industry to drive the country. As a result, the country is extremely affected by the epidemic. Occupancy rate has fallen drastically as international travelling continues to be restricted. Revenue from providing catering venues for banquets and conferences is a lost cause, in contrast to the relatively high operation cost of running a hotel business. Colliers International Thailand has revealed the results of the hotel business survey regarding the effects of hotel operation which includes the adapting of strategies in order to see the businesses through the time of hardship. Temporarily shut down or closed permanently Renting units as state quarantine facilities Monthly rent similarly to service apartment When talking about Thailand’s tourism & hospitality industry, people often think of the popular attractions such as beaches and mountains, while overlooking Bangkok implicitly. Hence, InvestMaN would like to bring your attention to hotels specifically located in Bangkok which are facing an even bigger crisis than anywhere else in the country. The most obvious difference is the target group of customers/guests. Hotels & resorts located in famous tourist destinations down south welcome the mixed proportion of foreign and Thai tourists. Government loosening the lock down and encouraging locals to travel in the country does help hotel business at tourist attractions to stay afloat. The same thing cannot be said for hotels in Bangkok, particularly, luxury tiers which tend to rely almost entirely on foreign/international guests regardless of the pandemic situation. As a result, we have already witnessed the closure of several hotels in the capital. Appraisers’ view also asserts that the impact of COVID-19 is a temporary transformational uncertainty. Therefore, we make little emphasis on the situation as a factor which could drive down price. Nevertheless, the selling price may be lower due to the owner’s willingness to liquidate. An opportunity is there for investors in this period. However, factors affecting the long-term change may be in terms of investors who have to accept lower yields than they used to be. As according to the formula V = I / R, if the value does not decrease much, income is less. Therefore, the rate of return has to be reduced accordingly. Prospec Appraisal provides consultation regarding hotel business operators who are consolidating assets for accounting purposes or planning to acquire or liquidate business. We also provide appraisal/valuation services for hotels and other types of businesses. Thanks to the news source: Bangkok Biz 

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New ideas of land use by real estate companies. Will changes in land usage affect land values?

New ideas of land use by real estate companies. Will changes in land usage affect land values?

  Since the Covid-19 outbreak early last year, many businesses have gone through strategic adjustments, coming up with new business plans to acclimate into this New Normal Era. Every industry has been hit hard, including real estate.           Today, InvestMaN would like to share an idea of Pruksa Company, one of the biggest real estate development groups in Thailand. According to Bangkok Biz news, Pruksa Real Estate Public Company Limited has revealed a plan to turn this crisis into an opportunity in the making. The company is planning to develop its land bank, initially subject for condominium projects, instead turning them into Urban Street Market, targeting the new generation. Residential projects are to be put on halt due to the current over-supply of the condo market and the poor economy since the pandemic.           The company does not emphasize on generating income from this project. It is more of conducting short-term experiment/pilot testing to better understand the new generation of people who have turned their attention to online marketplace and e-commerce businesses. This idea also encouraged the growing popularity of the flea market trend among Thais, in which we have witnessed many successful flea markets around today. This business model might be the answer to business owners looking for a small storefront location that customers can easily access.          Aside from the main objective of this business model, InvestMaN view this move as a great visionary planning by the management. In addition to the opportunity to do something different, this also helps the company avoid the increase in subjected real estate tax if its land bank remains unused. Understanding the changing in customer behavior can help them develop projects that genuinely reach young people.         For anyone who is holding on to land but yet to decide on the development, Prospec Appraisal provides consultation regarding the feasibility study of land development, which is based on the principle of fundamental valuation. Credit source : Bangkok Biz

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Will hotels' new strategies

Will hotels’ new strategies – operate monthly rental campaigns – affect the rental apartment business?

Based on Prachachat Business, Thai tourism industry is still far from recovery from damages done by COVID. Hotel businesses are not yet out of the crisis. It is estimated that there will be around 20% of the supply of hotels in 20 provinces that still rely heavily on international tourists. However, due to the ongoing situation of COVID, tourists continue to be restricted from travelling across countries. In order to help soften the damage, the government has passed on a policy promoting domestic tourism, encouraging people to travel and spend in the country. The Tourism Authority of Thailand (TAT) states that in 2020, Thai hotel businesses across the country were fighting for survival in which the average occupancy rate for hotels nationwide varied from low 27,87% to 29.62%. When looking on a regional basis, the areas that were hit hardest was Bangkok region, with an average occupancy of just 27.28%. Meanwhile, the southern region of the country had seen an average occupancy of 21.43.%. On the other hand, the central and eastern regions are not far better off. The area which seems to be least affected was the northern and northeast region, with an average occupancy rate above the crisis benchmark. This was explained by their primary customer base being the mainly domestic market, unlike other regions. InvestMaN then takes our readers to see the current hotel business situation. The competition for price war is as fierce as ever! Since the latest lockdown was lifted, renowned luxury hotels of 5-6 stars have been lowering down their rate to attract guests. This negatively impacts the 3-4 star hotel, which not only has been affected by COVID, find themselve competing with luxury hotels. New potential competitors have just entered the market. Prior to COVID situation in 2017-2018, the growth rate of foreign tourists was surging at record high, hence, encouraging more entrepreneurs into investing and developing more luxury hotels to accommodate the rising number of tourists. Many constructions were scheduled for completion by 2020, but the COVID outbreak has caused several projects to be delayed. Once COVID is well behind us, we could witness fierce competition in the tourism sector. Thai people have already begun travelling domestically ever since the loosening of the lockdown period. Tourism provinces close to the metropolitan area such as Pattaya, Cha Am, Hua Hin are looking lively again after a long time. New strategy – monthly rental In making up for loss of revenue, some operators of luxury hotels in Bangkok have offered long-term rental or monthly rental, which is 50% off compared to the rate per night. This would put these hotels directly in competition with serviced apartments and luxury condos in the city. Serviced apartments and luxury condos will be on the lookout for hotels which offer far more superior services; cleaning, electricity, drinking water and etc. Perfect time to catch a break and renovate Additionally, some hotels use this as an opportunity to close down operations temporarily in order to renovate and upgrade hotels, getting prepared for the post-COVID period in which foreign tourists are expected to come flooding into Thailand. In terms of property valuation, we only view COVID as a temporary concern that would not affect the property value in the long run. For hotels’ operators wishing to learn the rental and appraisal value in order to request credit for improvement or extension of the hotels, visit Prospec Appraisal. We are here to help! Source: Prachachat

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Laos durian

Laos durian by Chinese investors pose threat to Thailand’s durian market

Recently, we have seen the movement of foreign capital investment in and out of the country as well as throughout the Asian region. These investment activities may directly and indirectly affect the economic structure of our home. One of the top agricultural products in Thailand when it comes to the subject for export is nothing but durian. Recently, we have seen the continual rise of durian prices in the country despite the fact that they are domestic products. Suddenly, durian has become less affordable. This is because Thai durian farm operators have their head turn to the bigger market with much higher demand and spending power – China. However, things might change in the future with the current competition from countries in the same region such as Malaysia and the Philippines as well as certain future competitors – Laos. This may force durian agricultural operators and exporters seeking a new strategy to cope with the rise in competition, as a result, affects the durian price domestically. This brings us to today’s hot topic of discussion recently. Thansettakij source has revealed regarding chinese investors receiving 30,000 acres of land as concessions from the Laos government for one particular purpose – cultivate durians for export to China. This is viewed by the Laos government as a move which could promote entrepeneurialship and the agricultural sector for export to foreign countries. This could create thousands more jobs as well as generate income for people in a country which have seen more goods coming in and out. We have witnessed the continued growth of the durian import business in China which creates business opportunities. Hence, there is a high probability that Thailand will be facing escalating competition in Southeast Asia sooner than later when this land concession plan of 20,000 – 30,000 rai takes shape. With a terrain and geography that is similar to Thailand but much cheaper labor cost, Laos could pose a considerable threat to the Thai’s durian exporting business. Another thing that gives Laos a clear advantage is the current Free Trade Agreement in place which waives any import tariffs between Laos and several trading countries, including China, the largest consumer market. This could finally give the country a leverage in developing its agricultural industry in the future. Before carrying out an investment of this magnitude, an in-depth study of the project feasibility must be performed in order to ensure the intended outcome. These studies include an analysis of the project location and site selection. With the increasing demand of land for agricultural purposes, land prices could rise depending on locations. Therefore, land holders or one intending to acquire one for agriculture should keep a close watch on the values before any transaction. Prospec Appraisal is happy to provide services and consultations for land valuation or even business valuation for owners. Moreover, we also offer additional service on feasibility study and site selection. Source: Thansettakij

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Logistic & Warehouse Booming Since COVID-19!

Logistic & Warehouse Booming Since COVID-19!

 Ever since the breaking of COVID-19 last year, the negative impact of the pandemic has had on the economy was the only topic being discussed, as far as people are concerned. Many businesses and sectors are disrupted, more or less. However, there is a silver lining to occurrence as well, and that is the e-commerce online business. This should not come as a surprise, considering that it was trending for sometime before COVID came along. Both entrepreneurs and consumers have their heads turn towards this kind of business due to the growing digital world we are living in. It is fair to say that COVID-19 arrived at the right time to instigate the growth of e-commerce businesses.  InvestMaN wants our readers to think of a different light on the COVID experience. Try looking at this incident as a crisis but also an opportunity in the making, the beginning of something new, by taking these growing businesses as an example of the new frontier of businesses.  News source, Bangkok Biz, has revealed how the e-commerce business appears to be one of a few types of business to have been positively impacted by COVID compared to the overall Thai’s economy. The e-commerce / online shopping business posted a value of 2.2 billion baht in 2020, an all time high. It grew by 35% in comparison to a year earlier. This was largely due to how Online trading has become an imperative part of everyday life, under the Work-From-Home policy. For this reason, another business benefiting from this new found trend is the logistics, factory and warehouse business. The continued surge of e-commerce sectors has created increasing demand for storage and warehouse spaces. Colliers International has stated that large operators are renting more than 100,000 square meters of warehouse and factory spaces despite the COVID impact on the business. This does not take into account an additional demand from international customers such as chinese entrepreneurs, heavily concentrated in the Eastern Economic Corridor area. These extra demands will likely result in the increase of rental prices for storage spaces. The significance of the rising price will mainly depend on the location. Warehouses in Bangkok can command north of 200 baht per square meter at present. Operators are already preparing to develop and expand more storage spaces and warehouses to cater the surging need in the market.       People holding onto a piece of land, therefore, shall not overlook this type of business when planning on property development. Nevertheless, the important part of the process is an in-depth study of the project feasibility and site selection analysis, before executing any large development. With the rising value of this property type, some existing owners might be looking to sell their businesses for capital gain. Now, the question is how much is the gain?  Prospec Appraisal is here to provide services and consultation for warehouse valuation, which is classified as a large type of property, requiring appraisers with specific expertise in the area. Source: Bangkok Biz

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Super Tower

From “Super Tower” to “G Garden”

Back again with another article regarding the new real estate tax structure that has a direct impact on the companies developing projects! Remember last time InvestMaN brought up the topic about how Pruksa, a giant property development company, as an example of how lands are being used, now that the new tax regulation is in effect. Today, we have one more story that people are keeping a close watch, which could also be connected to with the new tax structure as well. Rewinding back to 2018, there was a lot of talk about an enormous project led by Grand Canal Land Public Company (G Land) called, “The Super Tower”. A plan on developing a skyscraper of 125 floors and 615 meters in height. of this building when completed. Once completed, it would be the tallest building in Thailand and the ASEAN region. The project value was expected to cost more than 18 billion baht. After a long period of silence since the news first broke out. We must say goodbye to this highly anticipated project! After the Central Pattana Public Company acquired G Land including 73 rai of land behind Central Rama 9 department store, the location of this project, the new ownership has prompted a change in the land development plan, according to the latest news report by Thansettakij. The idea of ​​a high rise building has been completely scrapped off making way for the “G Garden” project, which would mainly focused on supporting agricultural business. The concept of Urban Farming & Farmer’s Connect or vegetable garden in the heart of the city, serving as a trading point of agricultural products where farmers and consumers are brought together. In addition to the main purpose, the project is also classified as a mixed use type whereby space is reserved for development of public urban leisure areas for people of all ages. Essentially, it can be considered as a mini park. InvestMaN sees the idea as a rather innovative and unique development idea when taking into account its urban location on the contrary to the intended function. It is likely to receive a positive response from the Bangkokers who have been more demanding for more green space in recent times. This plan is the answer to urbanizing eco-friendly projects. Speaking of the reasons behind the changes from the initial development plan, COVID-19, undoubtedly played a big role. However, InvestMaN believes this is another prime example of land use changes after a restructural of real estate tax earlier this year. Land owners are now looking to develop agricultural projects, in a hope to reduce the property tax rate. Now, many people might begin to wonder if the value of the land could change when usage changes. Based on the appraiser’s aspect, the highest and best use of the land, the temporary use of the land for specific purposes or certain benefits will not affect the potential of the land. On the contrary, it could be viewed as a positivity if the usage achieved its intended objective, resulting in higher land value. Property can always be converted for maximum benefit, such as a condominium or commercial buildings in the future when economic conditions are more conducive. For anyone who is holding on to land but yet to decide on the development plan, Prospec Appraisal provides consultation regarding the feasibility study of land development, which is based on the principle of fundamental valuation – Highest and Best Use. Furthermore, our wide range of services cover the valuation of all types of real estate. Credit source: Thansettakij

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Land prices around Lam Sali Interchange Station, Bang Kapi - Orange Line Soaring through the Roof!

Land prices around Lam Sali Interchange Station, Bang Kapi – Orange Line Soaring through the Roof!

 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.

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