Bright Outlook for Thai Properties - Tourist Destinations

The momentum of hotel investment in Thailand is likely to continue, supported by new buying opportunities, especially in tourist destinations, according to the property service consultant John Lang LaSalle.

Activity in Thailand is projected to increase as some counter-cyclical buying opportunities emerge, said Mike Batchelor, managing director for Asia's investment sales of Jones Lang LaSalle Hotels.

The political environment is more stable and trading is expected to rebound over the next 12 to 18 months, notwithstanding the impact of the recent flooding disaster in Bangkok.

Similar to Hong Kong and Singapore, some offshore and long-term Thai owners are looking to exit to redeploy elsewhere capital offshore.

Earlier in January, two Courtyard by Marriott hotel properties with a combined value of 3.8 billion baht in Phuket's Patong and Phetchaburi's Cha-am were up for sale.

In the past two years, JLL Hotels have successfully completed several high-profile transactions in Thailand including the Laguna Beach Resort Phuket, Dusit Thani Laguna Phuket, Baan Taling Ngam Samui and the Sofitel Silom Bangkok.

Mr Batchelor said so far the dislocation in the financial markets has not impacted underlying trading fundamentals in Thailand. This has reassured investors to a certain degree and underscored the attractiveness of high-quality, income-producing hotel real estate as an asset class.

"We expect single asset sales across the gateway markets of Bangkok, Phuket, Pattaya to be the main centres of activity following a similar pattern in 2011," he said.

On the global trend, JLL Hotels forecasts that the global hotel transaction volume will hold steady in 2012, with value exceeding US$31 billion, despite the continuing economic uncertainty.

The sentiment is especially bullish in the Asia-Pacific, where the hotel transaction volume is projected to reach $5 billion this year, similar to last year. Of this, Asia is projected to reach $3.5 billion as long-term owners continue to make strategic dispositions in Southeast Asia and bank-motivated sales gain traction in Japan.

http://www.bangkokpost.com/property/news/277742/jll-bright-outlook-for-continued-hotel-investment

Thailand Property Market Heats up!

MahaNakhon a hit abroad

Because of better sentiment among foreigners toward the elected government, the luxury developer Pace Development Co Ltd plans another roadshow in Hong Kong to pick up additional sales of at least 200 million baht for units at its high-end MahaNakhon project.

CEO Sorapoj Techakraisri said foreign property buyers' confidence in Thailand's economy and political situation had improved after the general election and formation of the new government, showing the country's political stability.

"They [foreign buyers] didn't care which party would become the new government, who would be the new prime minister or what the new policies would be," he said. "They just learned that we had a government from an election, a good sign for the country."

The company will have its second roadshow in Hong Kong next month to follow up new sales and expects to have at least 200 million baht after receiving many inquiries. The previous roadshow in Hong Kong last month recorded sales of 420 million baht for 10 units.

"Chinese buyers are interesting for us to tap, and we plan to talk with our sales agent about this segment," said Mr Sorapoj. "But they prefer one-on-one or private meetings to a roadshow because many of them are richer and want to stay unknown."

The company had 330 million baht in sales from eight units sold at another roadshow in Singapore. Total sales at both destinations of 750 million baht exceeded a target of 600 million baht, said Mr Sorapoj, a son of the major shareholders of the condominium leader L.P.N. Development.

With an investment of 14 billion baht, MahaNakhon will have 194 units worth 19 billion baht. It is 40% sold and sales are expected to reach 45% by the end of the year. Unit prices are 220,000 to 340,000 baht per square metre. Construction is to be completed in 2014.

"Better sales are helping us to make easier deals and to bargain better with banks that fund the project finance," said Mr Sorapoj. "By year-end we will complete a deal with the banks and hope to get the best terms amid rising interest rates."

In the year to date, the company had sales of 4.9 billion baht, up 60% from 2010. It has 20 units remaining for sale at Saladaeng Residences.

http://www.bangkokpost.com/property/news/253177/mahanakhon-a-hit-abroad

Rise in air passenger traffic - first half of 2011

Thailand's six major airports including Suvarnabhumi posted an 18.2% rise in passenger traffic in the first half of this year to 33.5 million, underscoring the country's position as one of the busiest in the region for civil aviation.

High double-digit growth will likely continue through the second half thanks largely to the expected absence of further domestic political turmoil that chased away foreign tourists over the past two-and-a-half years.

Industry analysts say travel demand in the high season, which begins in late October, will also likely expedite growth in passenger traffic.

Figures from Airports of Thailand Plc show international passenger throughput from January to June rose 20.5% year-on-year to 21.3 million, while domestic traffic increased by 14.4% to 12.2 million.

Rising in tandem with the increase in passenger numbers were flight frequencies. Combined takeoffs and landings rose 15.4% year-on-year in the first half to 223,381 _ 125,344 for international (up 16.4%) and 98,037 domestic (up 14.2%).

Cargo volume through the airports in the first half grew more slowly due to the weak global economy, by 3.18% to 706,438 tonnes _ 649,328 tonnes for international (up 2.74%) shipments and 57,110 tonnes domestic (up 8.45%).

Most traffic went through Bangkok's gateway Suvarnabhumi airport, which handled 15.6% more passengers in the first half to hit a record 23.99 million.

International passenger traffic rose 18.95% to 18.8 million while domestic traffic increased 4.9% to 5.2 million.

Suvarnabhumi handled 11.7% more takeoffs and landings year-on-year in the first half to a record 145,100 _ 106,798 international (up 14.3%) and 38,302 domestic (up 4.9%).

The airport handled 669,763 tonnes of freight, up 3.14% year-on-year, with international volume rising 2.82% to 643,478 tonnes and domestic shipments up 11.5% to 26,285 tonnes.

http://www.bangkokpost.com/business/aviation/250809/h1-traffic-growth-healthy

Public graft body steps into resort row

The Public Sector Anti-Corruption Commission is preparing to sue resort developers suspected of encroaching on protected land in the Khao Yai national park as well as any state officials found to have assisted them.

PACC secretary-general Ampon Wongsiri yesterday said the National Park, Wildlife and Plant Conservation Department had asked him to examine 22 land plots covering 250 rai near Tharn Thip waterfall in the Khao Yai National Park in Prachin Buri's Prachantakham district where officials have found evidence of encroachment.

Mr Ampon said influential individuals had used land rights documents to claim ownership of the plots.

Issuing land rights documents for forest reserve areas is prohibited by law. PACC will ask the Land Department and the Royal Forest Department to investigate.

Any land title deeds issued for areas in the Khao Yai national park will be revoked and authorities found to have been involved in issuing of the land documents will face legal action.

Meanwhile, Suthep Pawareswitthayalarn, chief of Nakhon Ratchasima's forest management bureau, said forestry officials yesterday finished searching 22 resorts suspected of encroaching on the Khao Phu Luang forest reserve in Wang Nam Khieo. Next week, authorities will begin to search a further 17 resorts suspected to have been built in protected areas of the Khao Phu Luang forest reserve.

http://www.bangkokpost.com/news/local/251460/public-graft-body-steps-into-resort-row

Wage Hike to add to Housing Cost, Thailand

Unit prices of self-built homes could increase by at least 8.2% if the minimum wage is increased to 300 baht a day as the new government has pledged, builders say.

Vibul: Builders to factor in new rates

A higher minimum wage would have twin impacts on the cost of constructing a house, said Vibul Chantradilokrat, president of the Home Builder Association (HBA). One would be an increase in labour costs, which account for 30% of the total, and the other on construction materials, the major cost at 70%.

Raising the minimum wage from 215 baht to 300 baht a day, or by 39.5%, would lift home prices in a range of 8.2% to 10.6%.

"We cannot estimate how much construction materials prices will rise, but they will definitely increase as the wages for production of construction materials will be revised up in line with the new government's policy," said Mr Vibul.

He said the higher unit prices were, the higher the increase in prices would be. Finished materials are used more to build smaller units than larger ones. Higher-priced units are mostly built by skilled labour.

"Homebuilders should carefully set unit prices as the new wage, if passed, will start on Jan 1 next year," said Mr Vibul. "Unit prices introduced today should factor in new rates, as a unit sold today will start construction no later than November and finish next year."

In labour costs for a self-built home, wages ranged from 215 baht to more than 300 baht a day for non-skilled and skilled labour. An increase in the minimum wage of 215 baht would cause a step-up increase in other wage rates. For example, from 215 to 300 baht, 250 to 320 baht and 275 to 325 baht.

From Aug 25-28, the HBA will hold its Home Builder 2011 event at the Queen Sirikit National Convention Center, where more than 40 builders will join with a sales target of 2.5 billion baht, up from 2.3 billion last year.

Highlights will include the 4G Home concept of good design, good consultation with architects and engineers, good content from landscape and interior architects, and good land profile.

Financial partners Siam Commercial Bank, Kasikornbank, the Government Housing Bank and Bangkok Asset Management Corporation will offer more than 1,000 plots of land with titles for building houses.

http://www.bangkokpost.com/property/news/250188/builders-say-wage-hike-would-add-to-housing-cost

Dow to build (PE) Rayong plant - Polyolefin Encapsulant Films

US-based Dow Chemical is planning a new petrochemical plant in Map Ta Phut, Rayong, to more than triple its production capacity of specialty films.

The new facility, for which the investment cost was not disclosed, will begin construction next year for the production of polyolefin (PE) encapsulant films, which are used in photovoltaic modules for solar power installations.

Another similar plant will be built in Schkopau, Germany, also in 2012, Dow said yesterday.

Together, these sites will significantly expand the company's ability to supply encapsulant films worldwide.

Jirasak Singmaneechai, Dow's country manager, said the new Map Ta Phut factory would support the company's strategy to enhance and expand its presence in Thailand. The factory will be Dow's largest manufacturing facility in Asia-Pacific and comes with access to a seaport, he added.

Dow Enlight PE films help improve the reliability and performance of finished photovoltaic (PV) modules and allow fast processing speeds to help module manufacturers lower their conversion costs.

Demand for PV modules has been growing at about 30% a year, said Brij Sinha, global market manager for photovoltaics and performance plastics.

Investments in renewable energies have continued to skyrocket, growing nearly a third to US$211 billion globally in 2010.

Solar pricing is now becoming competitive with other sources of electricity.

http://www.bangkokpost.com/business/economics/250568/dow-to-build-rayong-plant

Sansiri looking to build in luxury market - lack of supply

As new low-rise supply in the mid- to high-priced market is very limited, the listed developer Sansiri Plc (SIRI) will launch three-storey single houses priced over 10 million baht and four-storey townhouses priced 19 million baht this quarter.

An artist’s rendering of Sansiri’s 19-million-baht fourstorey townhouse, which will be the developer’s most expensive undertaking.

Manu Trakulwattanakit, the developer's executive vice-president for project management & product development, said the single houses would be developed under the Narasiri brand, which hasn't had a launch in three years.

The project is on a 15-rai site on Soi Yothin Pattana in Bung Kum district, 300 metres from presumed new prime minister Yingluck Shinawatra's house. It will comprise 60 units with plot sizes starting from 60 square wah and usable area starting at 270 sq metres, with a launch in September.

"Though three storeys may make the house look bulky, our design team made the units look bright and airy with a resort theme exterior," said Mr Manu.

Property consultant Agency for Real Estate Affairs (AREA) said the number of new single house units priced above 10 million baht launched in the first six months of 2011 accounted for 4.4% or 505 units of the total of 11,413 units.

New townhouse units priced higher than 10 million baht accounted for 1.9% of the total new townhouse supply in the period, making up 257 units from a total of 13,845. All were priced between 5-10 million baht.

This weekend it will launch 10 units of Residence Sukhumvit 65, a luxury four-storey townhouse project worth 170 million baht. The Sukhumvit Soi 65 project will be SIRI's first luxury townhouse offering.

During the first seven months of the year, SIRI had sales of 2.63 billion baht from seven townhouse projects, up from 1.74 billion baht in the same period last year.

SIRI plans to launch 23 new projects worth a combined 30 billion baht, comprising eight single house projects worth 10 billion baht, four townhouse projects worth 3 billion baht and 11 condo projects worth 17 billion baht.

In the first seven months of the year, it started seven projects: three single house projects, two townhouse projects and two condominium projects. The company recorded total sales of 12 billion baht in the first six months of 2011, up from 9 billion in the same period last year.

SIRI shares closed yesterday on the Stock Exchange of Thailand at 5.50 baht, up 10 satang, in total sale of 69.5 million baht.

http://www.bangkokpost.com/property/news/249866/sansiri-looking-to-build-in-luxury-market

Eco-friendly Map Ta Phut factories with increased safety standards

Community Partnership Initiative have provided a forum for Map Ta Phut business operators, their staff and local residents to discuss developments.

Sutha Hemsakul, head of the Payoon community near Rayong's Map Ta Phut industrial estate, is feeling a bit relieved as well as more confident in the safety standards and environmental protection measures of area factories.

He has been invited to observe local production processes and safety and prevention measures firsthand periodically throughout this year accompanied by other community representatives.

The Map Ta Phut industrial estate fell under a heavy attack from 2006-09 from non-governmental organisations and environmentalists alleging volatile organic compound emissions were pushing air pollution to unacceptable levels.

The dispute reached a climax in September 2009, when the Central Administrative Court issued an injunction suspending 76 projects until they met the requirements in Section 67 of the 2007 Constitution, which stipulated industrial projects had to undergo environmental and health impact assessments (EHIAs).

After several attempts by operators and Industry Ministry officials to seek court permission for the suspended projects to restart construction, almost all of them have been allowed to continue.

Only two - one belonging to PTT and the other to the Siam Cement Group (SCG) - are still pending EHIAs.

Leading industrial giants including PTT, Dow Chemical Thailand, BLCP Power, the Glow Group and SCG formed a new alliance in Map Ta Phut in June 2010.  The Community Partnership Initiative (CPI) is a far-reaching programme aimed at improving relations with communities and securing the success of future investment.

Called Pheuan Chumchon (Friends of the Community) in Thai, the programme focuses on improvements in the areas of safety, health and the environment to achieve higher standards than those required by law.

It also provides a vital link between the industrial sector and local communities for sharing knowledge, addressing critical issues and responding to community needs.

Veerasak Kositpaisal, the CPI's chairman as well as chief executive of PTT Chemicals, said that over the past year industry has grown more aware that the surrounding communities need more than just donations.

The CPI has called for mobile medical services and better understanding of the manufacturing process and safety standards of local plants in the short term.

In the long term, it will provide educational support and scholarships to community children.

There is also an ambitious plan to develop Map Ta Phut into an "eco-industrial town", with 270 rai reserved for green areas including the planting of 100,000 trees.

"Over the previous year, 58 industrial plants have joined the scheme out of 140 in Map Ta Phut and Ban Chang. In the long term, we hope to persuade almost everyone to participate, as we want to develop the project in a sustainable manner," said Mr Veerasak.

Monta Pranootnarapal, governor of the Industrial Estate Authority of Thailand, said the government has expressed support for the eco-industrial town plan and already approved 478 million baht in funding for the four-year project that began this year.

"This initiative will set a good example for sustainable industrial development, as Map Ta Phut is one of the world's leading petroleum and petrochemical estates," said Kan Trakulhoon, SCG's president and chief executive.

http://www.bangkokpost.com/business/economics/248965/big-business-with-a-heart

Make a Wish Foundation Thailand - upcoming Event in Bangkok

Four Seasons Hotel Bangkok will host "Super Kids for Super Moms", a buffet afternoon tea charity fashion show to raise money for the Make-A-Wish Foundation Thailand, which will take place at the hotel's lobby area on August 6 from 2pm.

Guests will enjoy a special buffet afternoon tea prepared by the hotel's pastry chef Stephane Calvet and his team, while child models - sons and daughters of celebrities and high society families - together with their mothers, will trot to the moods of autumn and winter collections by Burberry.

Among them are the children of Chartchai and Kunyarat Pladisai, Byron and Cindy Bishop, Edward and Methinee "Luk Ked" Sharples, Jamorn and Saraichat Jeeraphat, Sayam and Kristi Sethaputra, Chayada Lewchalermvongse, Janista Charoonsmith, Nicole Theriault, Pete and Wilailak Thongjua, and Rainer and Angelique Stampfer.

To add even more excitement to the show, Paye Srinarong of the famous Vie Trio will also be present to perform solo on violin - this time without his two sisters. Thailand's first and only classical crossover voice band Viva! Pop Opera, featuring five classically trained songbirds, will perform well-known pop classics and traditional light opera.

In addition, talented students from PlayAct, an academy of performing arts, will entertain guests with their dance and song show. L'Occitane will contribute a percentage of sales of various L'Occitane products sold at the event.

The charity event is presented by Four Seasons Hotel Bangkok in cooperation with British Fashions, importer of Burberry clothing and fashion accessories, Siam Commercial Bank, the International Herald Tribune and Hello magazine.

Tickets cost 1,500 baht, including a lucky dip with a chance to win meal vouchers for dining venues at various hotels, plus gift vouchers from Burberry and L'Occitane.

http://www.bangkokpost.com/lifestyle/family/248989/fun-fashion-for-a-good-cause

Japan keen to develop high-speed rail service

Japan is interested in developing a 230 billion baht high-speed train service from Bangkok to Chiang Mai and Rayong, says Supoj Saplom, permanent secretary of the Transport Ministry

Mr Supoj said he had learned about the interest at a meeting yesterday with Akira Yonezawa, deputy director-general for engineering affairs at Japan's Railway Bureau. The full line would be more than 800km long, he was told. The two met a day after a high-speed train accident in China that killed 35 people.

Mr Supoj said Japan was highly experienced in high-speed railways and its bullet trains had never had an accident.

In China a lightning strike caused a power outage that brought to a halt a high-speed train on an elevated track in the city of Wenzhou. Then another high-speed train smashed into the stalled one from behind, killing at least 38 people.

Thai transport and engineering authorities said they did not think a similar accident could occur here due to the Kingdom's higher safety standards.

That's because Thailand's electric railways - all inner city services in Bangkok - had dual power supplies, Mr Supoj said. Those supplies ensure a continued flow of electricity to trains in case of a breakdown in power supplies.

He added that if a train did stop, traffic control would see the problem and deactivate other trains fast enough to prevent a collision. Also, the intervals between Bangkok's electric trains are long enough for authorities to prevent rear-end collisions.

Mr Supoj cited the 15-minute interval between express trains on the Airport Rail Link system that connects inner Bangkok to Suvarnabhumi airport.

Still, Thai authorities will study the collision in China to improve safety measures for Thai railways, he said.

Suchatvee Suwansawat, dean of the Faculty of Engineering of King Mongkut's Institute of Technology Ladkrabang, said back-up power supplies in Thailand would make a similar collision unlikely, or even impossible. Besides, controllers of Bangkok's airport link, skytrain and subways would automatically cut power supplies to trains on a problematic track if a train stalled. He said that a failure of a safety-oriented power shutdown function might have been the reason for the collision in China.

Yuthana Thapcharoen, governor of the State Railway of Thailand, said that during a test run of the SRT's Airport Rail Link before it became fully operational, the power system had broken down and the link had automatically stopped all trains to prevent a collision.

"If the electricity system is really out of order, the SRT has a back-up plan," he said. "Its controllers can switch to manual mode or use a phone to communicate [before an accident occurs]."

http://www.bangkokpost.com/news/transport/248788/japan-keen-to-develop-high-speed-rail-service

Don Muang moves local flights to Terminal 1

The Airports of Thailand (AoT) will move all domestic service at Don Muang Airport to Terminal 1 on August 1.

Don Muang Terminal 1 will reopen to serve domestic passengers on August 1.

The move was delayed for two months due to lengthy discussions among related parties.

AoT has spent at least 13 million baht to refurbish Terminal 1, increasing the space by 40% for passengers and shopping outlets.

Terminal 1 used to serve international passengers when Don Muang Airport was fully operational. After Suvarnabhumi Airport opened in September 2006, Don Muang reserved Terminal 1 for international passengers of charter flights and private jets.

Once opened on August 1, Terminal 1 will be segmented into two parts: One for irregular international flights and the other for domestic airlines.

At present, airlines that offer domestic flights via Don Muang are Nok air, Orient Thai, Solar Air and Thai Regional Airlines, which operates small fleets with only eight seats per trip. It flies to five destinations; Bangkok to Buri Ram, Surin, Tak, Mae Sot and Phetchabun. The airline offers iPads as its inflight entertainment.

Terminal 1 will have the capacity to serve up to 10 million passengers a year or more than twice the present capacity of the domestic terminal.

After moving, other areas of the airport, including the former international terminal 2, domestic terminal and cargo areas, will be redesigned to serve AoT's new commercial projects. They are a maintenance centre for small and medium-sized aircraft, a flight-simulator training centre, a logistics centre, a warehouse for equipment and aircraft spare parts, a duty-free zone for imported luxury products such as cars to facilitate international exhibitions, and an exhibition centre.

http://www.bangkokpost.com/travel/news/248663/don-muang-moves-local-flights-to-terminal-1

FORD receives $509 million loan for Rayong production plant

Published: 08-Jul-2011

US-based auto-mobile manufacturer FORD MOTOR has secured a loan worth THB15.5 billion ($509 million) to support the development of it's new passenger car manufacturing plant in Rayong, Thailand.

The loan has been provided by Bangkok Bank, Tisco Bank and the Export-Import Bank of Thailand. The new Rayong facility which will have an annual production capacity of 150,000 units will strengthen its local production and export capabilities.

Construction work on the new facility, which is nearing completion, is expected to cost $450 million. Currently, the company is recruiting and training employees for production and maintenance ahead of the start of operations.

Ford Motor is also planning to buy components worth approximately $800 million per annum through the local supply chain.

The company has said that the facility was expected to generate up to 11,000 new jobs, including 2,200 directly from Ford and 8,800 indirectly through its local supplier and dealer networks.

http://www.worldconstructionnetwork.com/news/ford_receives_509_million_loan_for_rayong_production_plant_in_thailand_110708/