Market Research PAT TAYA C O N D O M I N I U M M A R K E T PATTAYA CONDOMINIUM MARKET OVERVIEW 1 st h A l f

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1 Market Research pattaya CONDOMINIUM market PATTAYA CONDOMINIUM MARKET OVERVIEW 1 st half 2009

colliers international THAILAND The Knowledge Report Pattaya CONDOMInIUM market 1 st half 2009 PATTAYA CONDOMINIUM MARKET OVERVIEW Market Indicators SUPPLY DEMAND take up rate average selling price

It is within, but not under the jurisdiction of Amphoe Bang Lamung in the province of Chonburi.

2 colliers international THAILAND The Knowledge Report Pattaya CONDOMInIUM market 1 st half 2009 PATTAYA CONDOMINIUM MARKET OVERVIEW Market Indicators SUPPLY DEMAND take up rate average selling price 1h h 2009F Pattaya is a city located on the east coast of the Gulf of Thailand about 165 km southeast of Bangkok. It is within, but not under the jurisdiction of Amphoe Bang Lamung in the province of Chonburi. The city of Pattaya is a self-governing municipality that covers the whole Tambon of Nong Prue, Na Klua, parts of Huai Yai and Nong Pla Lai. It is located within the heavily industrialized Eastern Seaboard zone, along with Sri Racha, Laem Chabang and Chon Buri. Pattaya is also the centre of the Pattaya-Chonburi Metropolitan Area, the conurbation in Chonburi Province. The real estate market is big business in Pattaya, especially property development. Many new buildings have gone up in recent years and some people think the market might be oversupplied. Some buildings are put up. There is also a market for villas, but its growth is limited. Greater Pattaya occupies most of the coastline of Banglamung (one of the 11 districts that comprise Chonburi Province). It is divided into a larger northern section that spans the areas to the east of Naklua Beach (the most northern beach) and Pattaya Beach (the main beach), plus the Buddha Hill headland (immediately south of Pattaya Beach), and a smaller southern section covering the area to the east of Jomtien Beach (which lies directly south of Buddha Hill), including Dongtan Beach. Jomtien s beaches are much broader and generally in better shape, and the atmosphere locally is more sedate and family-oriented than at Pattaya Beach. The real estate market is big business in Pattaya, especially property development. The key factor of success in developing a condominium in Pattaya is the developers. Larger developers can raise confidence among buyers thanks to their reputation and/or consutrction track record. Based on our experience, unsuccessful condominium projects are not developed professionally and we believe that there is an opportunity for strong new players to start developing true five-star residential projects in Pattaya.

3 2 Colliers International

Supply Trends Condominium Locations Our study is focused on the major areas of condominium accommodation in Pattaya, which can be subdivided into four main areas: 1.

4 Supply Trends Condominium Locations Our study is focused on the major areas of condominium accommodation in Pattaya, which can be subdivided into four main areas: 1. Wongamat: This is the area to the north of Pattaya Nua. It is considered a peaceful, more up-market location and is a relatively new area for condominium development. The current developments under construction in this area are Northpoint, The Cove, Ocean s Edge and many more. The condominium units in this precinct offer a total supply of 3,434 units. During the first half of 2009, there were four condominium project was added to the supply in the area. Table 1 : Supply Added in Wongamat Area, 1H 2009 No. Project Name Developer no. of Units 1 Near Beach Residence T K R Engineering and Supply Company Limited 59 2 Wongamat Privacy Condominium D Royal and Spa Condotel Company Limited 78 3 Wongamat Privacy Condominium C Royal and Spa Condotel Company Limited 76 4 View Talay Residence Condominium VI Siam Best Enterprise Company Limited Pattaya: This area is situated alongside the city centre. The section of beach from Central Road (Pattaya Klang) south to the harbour is adjacent to the core of Pattaya s abundant nightlife area. Many sections of the beach are covered by rented deckchairs run by local beverage vendors during daylight hours. Pattaya Nua and Klang are the areas favoured by Asian visitors, especially Chinese and Korean, while the area of South Pattaya is popular among Middle Eastern, South Asian and Russian visitors. Condominium projects in the vicinity include Northshore, Saratta and Nova Atrium to name just a few. The condominium units in this vicinity total 6,021 units. Three condominium projects were added to the supply in this area in 1H2009. Table 2 : Supply Added in Pattaya Area, 1H 2009 No. Project Name Developer no. of Units 1 The Paradise Residence Condominium Thanabutchai Realty Company Limited 78 2 Pattaya Klang Centre Point Condominium Central Pattaya Centre Point Company Limited The Pride Tower B Prinsiri Public Company Limited 79 Colliers International 3

3. Pratumnak: This area covers the main thoroughfare connecting Pattaya and Jomtien Beach. The recent trend in the area is the opening of many upscale restaurants along Thappraya Road.

5 3. Pratumnak: This area covers the main thoroughfare connecting Pattaya and Jomtien Beach. The recent trend in the area is the opening of many upscale restaurants along Thappraya Road. Despite this, there are many condominium units nearby; among them Royal Cliff Garden and Royal Beach Condotel have excellent reputations. This area is also very popular with Scandinavian and Russian visitors. Table 3 : Supply Added in Pratumnak Area, 1H 2009 No. Project Name Developer no. of Units 1 The Bay View II Condominium Haven Sky Holding Company Limited 37 2 Villa Norway Residence I Siam Ruby House Company Limited Jomtien: Jomtien beach is about 1 km south of Pratumnak Hill. The locale is home to many high-rise condominiums, beach front hotels, beaches, shops and restaurants. The area at the beginning of Jomtien is considered busy, while the area located at the end of this beach, called Na Jomtien, is considered peaceful and tranquil. There are many plots of vacant land available at Na Jomtien for future development. Table 4 : Supply Added in Jomtien Area, 1H 2009 No. Project Name Developer no. of Units 1 Avatara Condominium The Grand Iyara Company Limited 31 2 View Talay Residence Condominium IV Siam Best Enterprise Company Limited 79 4 Colliers International

The sharp increase in condominiums in Pattaya was found in 2006, up 18.06% over 2005. The growth rate of new supply is projected to average 9.96% per year from 2003 to 1H 2009.

6 Total Current Supply At the end of 2008, the supply of condominium units was approximately 39,555 units. From Jan-Jun 2009, approximately 847 units were added to the supply, bringing the current total supply of condominiums to approximately 40,402 units in Pattaya s condominium market. The sharp increase in condominiums in Pattaya was found in 2006, up 18.06% over The growth rate of new supply is projected to average 9.96% per year from 2003 to 1H Figure 1 : Supply of Pattaya Condominium Units, H 2009 The majority of condominium supply is in the Jomtien area, representing about 65% of the total, followed by the Pattaya and the Pratumnak areas, representing about 15% and 11%, respectively. Figure 2 : Supply of Pattaya Condominium Units by Location, 1H 2009 Colliers International 5

7 Future Supply Approximately 75 condominium projects with over 15,288 units will be launched in 2H2009 and beyond, with the majority in the Jomtien Beach area due to the availability of land and the favourable location close to the beach, as well as the high density in Pattaya. Future developments will shift to the Baan Amphoe and Bang Saray areas. Table 5 : Future Supply of Pattaya Condominium Projects, 2H f No. Project Name Location No. of Units Est. Completion 1 High Point Wongamat Avenue Residence Pattaya Maxx Central Pattaya Pattaya Beach Resort Pattaya TW Pattaya Klang Pattaya Vogue Pattaya Emerald Palace Pratumnak Nova Oceanview Pratumnak Phuview Talay Pratumnak Siam Oriental Twins Pratumnak View Talay Residence 5 Pratumnak Boulevard de Jomtien Jomtien Jens Apartment Jomtien Regatta Jomtien Thaiswai Residence Jomtien Sunrise Beach Villa Jomtien Park Royal Pratumnak The Urban Pattaya Pattaya Katilina Residence II Pratumnak North Point Wongamat Poom Patta Pattaya Laguna Heights Wongamat One Pattaya Height Pratumnak Suan Sawan Pattaya Jomtien Beach Mountain Jomtien Pattaya City Resort Pattaya The Sanctury Wongamat Wongamat TW Wongamat Beach Wongamat Royal Beach View Pratumnak La Royale Beach Jomtien The Montrari Jomtien Siam Ocean View Pratumnak Pattaya Heights Pratumnak Life Vela Casa Wongamat 355 Aug The Amber Royal Hill Condo Pratumnak 56 Dec LK Legend Pattaya Elegance Pratumnak Remark : The planned projects are based on reports from developers and may be subjected to delay. Source : Developers announcements and Colliers International Thailand Research 6 Colliers International

8 Table 5 : Future Supply of Pattaya Condominium Projects, 2H f No. Project Name Location No. of Units Est. Completion Year 38 On the hill Pratumnak TW Jomtien Beach Jomtien View Talay 7 Jomtien 2, Royal Residence 2 Jomtien Sunrise Royal Scandinavian Jomtien The Urban Suite Pattaya Sunset Boulevard Residence Pratumnak The Ocean Pearl (Phase 1) Pratumnak Tropical Dream Pratumnak The Cove Wongamat Tudor Court Pratumnak Diamand Suite Pattaya Ocean s Edge Wongamat The Park Jomtien Jomtien APUS Pattaya Tropicana Condotel Pratumnak City Garden Pattaya Pattaya City South Pattaya Pattaya Executive Residence 5 Pratumnak Jomtien Plaza Condominium Jomtien Jomtien Beach Penthouses Jomtien 78 Oct Waterfront Pratumnak Viewtalay Marina Beach Condominum Jomtien 1, Wongamat Wongamat Park Lane Jomtien The Pride 2 Pattaya Hyde Park Residence Pratumnak Saratta Residence Pattaya Eastpoint Condominium Pattaya The Ocean Pearl (Phase 2) Pratumnak AD Hyatt Wongamat The Loft Southshore Pratumnak W Tower Wongamat Reflection Jomtien Ananya Beachfront Condominium Wongamat Life Star City Tower Pattaya Ocean 1 Tower Jomtien The Chateau Pratumnak Remark : The planned projects are based on reports from developers and may be subjected to delay. Source : Developers announcements and Colliers International Thailand Research A total of 4,146 condominium units will be added to the supply in Pattaya, increasing the total by the end of 2009 to 43,701 units. Colliers International 7

Figure 3 : Future Supply of Pattaya Condominium Units, 2H2009-2012f Source: Colliers International Thailand Research Demand Trends International buyers are mostly tourists who visit Pattaya

9 Figure 3 : Future Supply of Pattaya Condominium Units, 2H f Source: Colliers International Thailand Research Demand Trends International buyers are mostly tourists who visit Pattaya regularly, with most of them looking for a good return on their investment in these projects. The following are the target tourists interested in buying Pattaya condominium units. Figure 4 : international tourists visiting pattaya, 2007 & 2008 Source : THA, TAT & Colliers International Thailand Research 8 Colliers International

10 1. Russians: Marketing agents and developers identify the main buyers as visitors from Russia. In 2007, 889,656 Russians visited Pattaya, up 84% over 2006, making them the leading market for the resort after only Thais, 1.51 million of whom checked into Pattaya hotels in However, the number of Russians visited Pattaya has declined in 2008 to 564,483 persons. Although Russians have been visiting Pattaya for more than a decade, only in the past two years have they started to buy up property in Pattaya and the trend is catching on. 2. Expat Market: Located in such centres as Hong Kong, Singapore, Tokyo, Bangkok, Phuket and Chiang Mai, the expat market is attracted by Pattaya s comparatively low land prices and cost of living. Knowing Asian markets well, they are particularly attracted by a potential yield of circa 9-11% on prime developments and spectacular rates of capital growth, which can be as high as 50%. 3. British: Before the Russians rushed into Pattaya s property picture, the main buyers were British visitors, many of them looking for a second home aboard and a retirement spot. 4. Scandinavians: Like the Russians, this group has proved a large and growing market for properties in Pattaya and the surrounding areas over the past two years. Another similarity is that sales to both Russian and Scandinavian buyers tend to be handled through their own national networks. travelling to the area, up 32% over The important factor behind Korean s love of Pattaya and as property buyers is their love of golf, as Pattaya has many golf courses in the surrounding area. 6. Middle East: The Middle East has potential in terms of property purchases in Pattaya, with visitors from the region up 25.08% over India: The number of Indian tourists visiting Pattaya is up 42% since Thailand: The attitude of Thais towards the resort is as a residential area and they take the following issues into consideration: - Location: A short distance from Bangkok, with a driving time of approximately one and a half. - Geographic area: They prefer to buy a resort property in a beach rather than a mountain area since the beach offers many sporting activities for the whole family. - Completed facilities: These should have restaurants, entertainment and shopping options. 5. Korean: Korean visitors tend to be interested in buying property in Pattaya due to the increasing number of tourists From 1-15 June 2009 the Land Department in Pattaya shows that the majority of condominium buyers are foreigners, representing 82% of the total, while just 18% of buyers are Thais. Figure 5 : Proportion of Thais and Foreign Buyers of Condominium Units in Pattaya, Jun 1-15, 2009 Colliers International 9

Approximately 319 second-hand condominium units were sold in the first half of June 2009, while 73 of the total 392 units sold were newly completed.

11 Approximately 319 second-hand condominium units were sold in the first half of June 2009, while 73 of the total 392 units sold were newly completed. Figure 6 : Demand for NEWLY Condominium PROJECTs and Second-Hand comdominium Projects among Thais and Foreigners, Jun 1-15, 2009 Condominium units in highest demand are those measuring less than 50 sq m, representing about 83% of the total, followed by those between 50 sq m and 99 sq m, representing 14%. Demand for units bigger than 100 sq m represents just 3% of the total. Figure 7 : Demand for Condominium in Pattaya by unit Size 10 Colliers International

We have measured the absorption of units in projects that were marketed during 2008 and applied this as a proxy for demand during the year. the end of 1Q2009.

A total of 12,479 condominium units in Pattaya were marketed in 2008, with the cumulative number of units sold 6,778 at Figure 8 : Demand for Condominium Units in Pattaya Source : Colliers

12 We have measured the absorption of units in projects that were marketed during 2008 and applied this as a proxy for demand during the year. the end of 1Q2009. Thus, there were approximately 5,701 units available for sale, making the cumulative selling rate of condominium units up until 1Q %. A total of 12,479 condominium units in Pattaya were marketed in 2008, with the cumulative number of units sold 6,778 at Figure 8 : Demand for Condominium Units in Pattaya Source : Colliers International Thailand Research Demand by Unit Type The most popular type of condominium unit in Pattaya is studio and 1-bedroom types, while the least favourite type is the bigger unit with three bedrooms. However, many units are still remaining due to the global recession, which slowed down the sales rate in the first half of Figure 9 : Demand for Pattaya Condominium by unit Size Source : Colliers International Thailand Research Colliers International 11

The Knowledge Report 1st Half 2009 Pattaya Condominium Market Demand by Location We have measured the absorption of units by location in newly launched projects

This area was followed by the Pratumnak and Pattaya areas, with 42.88% and 30.29%, respectively. The percentage sold in the Jomtien area was the lowest, at only 13.

Demand for condominium units in the Jomtien area showed to be the worst performance due to the high number of units currently available and over supply in the area.

13 The Knowledge Report 1st Half 2009 Pattaya Condominium Market Demand by Location We have measured the absorption of units by location in newly launched projects during the year and applied this as a proxy for demand by location. In 2008, the Wongamat area showed the highest absorption rate, with the percentage sold at 59.96%. This area was followed by the Pratumnak and Pattaya areas, with 42.88% and 30.29%, respectively. The percentage sold in the Jomtien area was the lowest, at only 13.98% of the total number of units launched in Demand for condominium units in the Jomtien area showed to be the worst performance due to the high number of units currently available and over supply in the area. In an economic downturn, all consumers, except those in the livefor-today segment, typically re-evaluate their consumption priorities. Figure 10 : sales proportion of Newly Launched Units in 2008 by Location Source : Colliers International Thailand Research 12 Colliers International

Price The sales price on all projects varies considerably, depending on the launch time, the project/unit design, level of interior finish, facilities, location and quality of the product.

14 Price The sales price on all projects varies considerably, depending on the launch time, the project/unit design, level of interior finish, facilities, location and quality of the product. The condominium market in Pattaya is attractive to both Thais and foreigners, due to its proximity to Bangkok and the number of completed facilities in the area. The key factor when purchasing property is location. It is significant to consider the property s surroundings, access and convenience of infrastructure. Pricing alone is not the top priority. Another critical element is timing and identifying the right property. The average sales price will vary according to location, building specifications and decoration. In order to clarify the price, we will focus on the following locations since condominium prices are a function of land prices, which depend on location. Table 6 : Average Selling Price of Condominium Units in Pattaya, 1H 2009 Area Wongamat Pattaya Pratumnak Jomtien Source : Colliers International Thailand Research Average selling price THB90, ,000 THB85, ,000 THB70, ,000 THB95, ,000 During the global recession, there has been some demand for Pattaya condominiums, although the majority of this demand is for self-use, rather than as an investment. From the data of the Department of Land, Pattaya, from Jun 1-15, 2009, it can be seen that the highest number of condominium units sold in Pattaya were those units with prices below THB 1 million, while the lowest numbers sold were those in the price range of above THB10 million. High-end properties, not only in Pattaya but in all areas, are seeing some of the largest declines. This is not surprising since the buyers in this sector of the market are typically cash rich, astute business people who know that they have a good chance of securing a better deal by holding off. In the low end of the market, mortgages can be harder to secure and, with this sector poised to become more crowded as prices decline, some time will likely need to pass before demand starts to pick up. Figure 11 : Demand for Pattaya Condominium by Price Range, Jun 1-15, 2009 Colliers International 13

15 Outlook: Facilities, activities and infrastructure in Pattaya has been developed continually, with many new developments to serve the residents. The retail market is complete as Avenue Pattaya and the Central Festival Pattaya Beach. Shopping centres make it convenient for the residents in terms of offering daily products and services. In addition, premium or luxurious products and services can be found in Pattaya, including international medical centres and schools. The key factor of success in developing a condominium in Pattaya is the developer, who should have proper funding and strong experience in condominium, residential or hotel developments. Larger developers can raise confidence among buyers thanks to their reputation and/or construction track record. A prime condominium site should be on the beachfront or a hillside site that offers sea views and beach access, also providing buyers with a level of privacy. The right products also need to be provided to meet the current trends in demand. Based on our experience, unsuccessful condominium projects are not developed professionally and we believe that there is an opportunity for strong new players to start developing true five-star residential projects in Pattaya. 294 offices in 61 countries on 6 continents USA 94 Canada 22 Latin America 17 Asia Pacific 64 EMEA 97 US$ 1.6 billion in annual revenue 1.1 Billion square feet under management 12,700 Professionals Contact information Notes The condominium rating used in our research is based solely on property ratings and the rates achieved obtained from market research. The rating system used in our report is not that of Colliers International. THAILAND: Patima Jeerapaet Managing Director Colliers International Bangkok Office: 17/F Ploenchit Center Klongtoey Bangkok Tel: Fax: Pattaya Office: 492/2 Thappraya Road Nongprue Banglamung Chonburi Tel: Fax: Risinee Sarikaputra Director Research This report and the figures shown herein has been prepared by Colliers International as a guide only. Any interested party seeking to rely on the contents should undertake its own enquiries as to the accuracy of the information. Colliers International does not guarantee, warrant the accuracy or represent the information contained in this document, and excludes unequivocally all inferred and implied terms, conditions and warranties arising out of this document, as well as all liability for loss and/or damage arising therefrom, including any loss of profits, business or anticipated savings. 14 Colliers International

16 This report and other research materials may be found on our website at Questions related to information herein should be directed to the Research Department at the number indicated above. This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. Colliers International is a worldwide affiliation of independently owned and operated companies.

PATTAYA CONDOMINIUM MARKET REPORT

PATTAYA CONDOMINIUM MARKET REPORT Pattaya C ity C ondominium M arke T 1 st H A L F 2010 colliers international THAILAND The Knowledge Report Pattaya City Condominium MarkeT 1 st HALF 2010 Executive Summary