.....Adverse worldwide economic trading conditions are having an impact in many areas of the Thai market.
Even the best of developers is not immune as evidenced by changes within the ranks and plans of developer of the year Raimon Land.
The Raimon board have voted in Hubert Viriot as chief executive following the resignation of Nigel Cornick at the start of March. More locally, Jonathan Atkins, VP for Sales in Pattaya, has left the company, we understand.
Raimon have decided to put on hold all new projects planned for this year, due mainly to the global economic crisis, they say in a report published in The Nation.
Marketing director Henri Young said plans to build three projects – Amalfi, at Phuket, 185 Rajdamri in Bangkok’s central business district, and The Edge condominium project at Pattaya – have been shelved until the economy recovers.
The company has to be cautious with new investment over the next 12 months, he said. Raimon may begin work on the delayed projects over the next two years, if matters improve.
Raimon Land’s decision to back away from new projects this year contrasts sharply with plans by many other developers to go ahead with new projects because they believe Bangkok’s property market has improved since the final quarter of 2008.
“Starting new projects this year is very tough,” Young said. “We have to borrow money from banks because each project needs investment of at least Bt2-3bn and we don’t have enough cash. And as everyone knows, banks nowadays are very cautious when lending to customers. They require pre-sales of at least 40 to 50 per cent of total project value. It is very difficult for us to achieve that figure in the economic situation. So, we don't think that we will start our new projects this year.”
Young said an alternative means of starting the new projects as planned was to seek partners. Raimon Land is talking with a number of foreign investors who remain interested in investing in Thailand and are looking for a price reduction. These investors have to wait for the proper time to invest, as well, he said.
Consumers are avoiding spending because of a lack of confidence in the economic situation. While there may still be demand for units in the
Bt1-2m price range, projects with prices ranging from Bt5-8m are very tough, he added.
Raimon Land has yet to see severe liquidity problems among its clients. Those in the company’s existing residential projects still have the ability to meet installments. However, it has seen slow sales in on-going new projects, and is currently unable to predict its revenue this year.
Raimon Land’s projects which still have units for sale include Northpoint (pictured) and The Loft Southshore.
Young said the company was looking for new strategies to accelerate sales this year. It will consider customers’ needs and select its real target group before deciding how it will speed up sales.
“We want to accelerate sales, but we can’t,” Young said. “It is not easy to offer sales promotions and get a good response immediately because of fierce competition in the market. However, we have plenty of time for the existing projects, so we’re not too concerned.”
l In the wake of this Raimon have been proactive locally by sponsoring a seminar called Approaches to Bolster Tourism and Real Estate Sectors in Pattaya, which, as the name suggests, was to discuss strategies for boosting development here.
This was due to be held on Friday, March 27 which coincided with REm going to press. Raimon’s Henri Young was due to take part in a roundtable discussion on The Roles of Real Estate and Tourism Businesses to Boost Pattaya’s Economy as part of the seminar.
Guest speakers for the event included Weerasak Kowsurat, Chairman of TAT (the Tourism Authority of Thailand); Vittaya Khunpluem, Chonburi Mayor; and Ittipol Khunpleum, Pattaya City Mayor. Ω
Footnote: REm has requested an interview with an executive from Raimon Land. If successful, we hope to feature this in our next issue (May).

Bargain hunters enter the market

Foreign investors are confident that it is a good time to buy Thai property, both in Bangkok and up country, according to a survey conducted for the daily newspaper, The Nation.
Price declines on land and residential projects have prompted some foreigners to expand their investments in the country’s property market, especially condominiums, the survey says.
Some have shown a strong interest in buying depressed assets, which are going for 20 to 30 per cent less than last year. Interest is also being shown in land for developing residential projects, as prices are down 10 to 20 per cent compared to last year.
Hub Soon Global Corporation Singapore subsidiary United Motor Works (Siam) has set up a joint venture with Chiwathai, called Chiwathai Hub Soon, to develop a low-rise condominium project. The company also plans to buy undeveloped land and take over existing residential projects worth nearly Bt1bn this year and next, director Henry Heng said.
Property management firm Akando, whose clients include Lizmans Property Fund, plans to take over a residential project on Rama IX Road in the capital worth Bt2bn this year. The project is under construction but the owner wants to sell. This follows Akando’s purchase of three other Bangkok condominium projects last year.
The company has a strong interest in buying or taking over property projects, with land and residential prices having dropped significantly.