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