Property developers are up in arms back of the 5% capital gains tax for property to be reintroduced in 2010. The controversial tax was repealed in April 2007 back of measures to stimulate the economy.
Back of a large outcry from the private sector the new tax will only be applied to property investments made within 5 years from purchase to address speculation concerns.
Real estate in Malaysia has been gaining in popularity with overseas investors especially from Singapore and Hong Kong as bank debt is available and attractive rental yields in CBD markets such as Kuala Lumpur.
Back of a recent interview by Greg Lowe with Thai listed property firm Raimon Land's Chief Executive Hubert Virot in the Bangkok Post the group is looking to shift its primary focus away from foreign buyers and targeting domestic buyers.
While it has closed it's overseas sales operation in Russia, the broader Thai market condo market with buyers in the 28-40 year old range is the strategic goal. Much has been written about the 15 billion 838 unit The River condominium project, which now has hit over 60% in sales.
While it's largest shareholder IFA Hotels and Resorts has provided bridge financing during the restructuring of the company, 40% of overheads have been trimmed with marketing budgets decreased to 4% of turnover versus the previous 11%.
The Middle East IFA group which is Kuwait based bought out the troubled Dubai World affiliate Isthitmar Hotels shareholding in Raimon in Q3 of this year. Another investment from now defunct Lehman Brothers was repurchased during the year.
From a macro picture Raimon is dramatically changing it's business profile and has made signals that it may look to strategic partners for some projects. The group has prime Greenfield development sites such as The Amalfi which is adjacent to Amanpuri in Phuket and Bangkok's 185 on Rajadamri and another in the CBD's Ploenchit area.
Raimon appears to be coming to the reality that many other larger developers who have been hit by cash flow issues with that while the local Bangkok domestic market is recovering that the mass overseas investors are currently missing in action and there are now clear signs of them returning anytime soon.
For market watchers, the question remains is how Raimon will be able to manage the considerable transition to compete with many of the large volume Thai listed property firms. Second is what will the future be for those significant prime land banks of properties currently taking as siesta on the groups balance sheet?
In the latest installment of the south's Almost Famous ocean front condo project Kata Rocks as added in celebrity interior designer Kelly Hoppen to the team, with leading architect Adrian McCarroll from Original Vision and Discovery Channel's Man vs. Wild star Edward Bear Grylls purchasing a premium penthouse.
Based in the UK's Notting Hill (same place but not the movie) she has worked with leading personalities Jude Law, Elton John and David Beckham. In addition Kelly is the author of the book “East Meets West: Global Design for Contemporary Interiors”.
Its good to see a growing emphasis not only on leading architects coming to Phuket but now the all important interior designers which will up the ante with perhaps more cohesive execution then was seen in the developing years of old.
The current Thai Government incentive of tax deductions up to THB 300,000 for purchases of property and transfers may not be extended according to Finance Minister Korn Chatikavanij.
While other stimulus packages may be extended which are aimed at low income earners, it's been reported that the renewal of the property incentive is unlikely. A number of purchasers are now expediting transactions in order to beat the end of year deadline.
Cambodia's first private island resort Song Saa Island Resort has sold over 50% of it's units in just two weeks since formal launch. We spoke to developer Rory Hunter who was in Phuket for an industry event organized by CBRE and learned more about the development.
With 14 resort villas comprised of 9 one bedroom units at US$200,000 and 5 two bedroom villas for US$450,000 since it's full marketing started a few weeks ago eight units have be sold, with the greatest movement in the larger, more expensive product. The offering is a lifestyle resort managed concept with 10% guaranteed returns in the first 3 years, and afterwards a split of 50% to owners, 10% reserve for maintenance and 40% retained by the operator. Owners have 30 day free usage a year, only paying utility charges during their stays.
In the Cambodia property market only leasehold is available to foreigners though its on a single 99 year term. Opening of the resort is set for Q2, 2011. Expected room rates for the resort will be US$400 for 1 bedrooms and US$650 for 2 bedroom. Access is through Sihanoukville via a 30 minute boat ride or there will be a Cessna seaplane access.
With substantially lower land and building costs then Phuket there looks to be much development activity on the horizon especially the nearby Koh Rong archipelago where land is currently available in large blocks with white sand beaches.
One of the regions fastest growing property market's China has announced though its Land Ministry that measures will be taken to slow down the overheated property market which has currently risen sharply on market speculation. It's been reported that residential projects in smaller cities will be restricted to 7 hectares, medium size cities at 14 hectares and bigger cities to 20 hectares.
In the past there were no implications or limitations on the size of land and the corresponding development. Regional property continues to rise back of Hong Kong, China and Singapore leading the way. Bangkok fueled mainly through domestic demand has seen recovery in the 3rd quarter and expectations for further increases in the 4th quarter of the year.
The Chairman and Managing Director of Land and Houses Anant Asavabhokhin is ranked Thailand's richest man in terms of an estimated asset value of THB 15.9 billon reported by Money and Banking Magazine. Results of the story show that the Top 100 list increased wealth by THB 56 billon despite an ongoing recession and political crises.
Coming in at number 2 was the owner of Preuska Real Estate Thongma Vijitpongpun at THB 15.83 billion. By family wealth the Maeleenonts topped the list with THB 25.87 billion. Also included at 4th place was the Central Group's Chirathivat family totaling in with THB 13.29 billion.
Surprise by surprise deposed Prime Minister Thaksin Shinawatra's family only ranked 38th at a meager THB 588.81 million, though of course the figures are based on officially documented shareholding.
The allure of private islands remains one of those sought after properties and now Cambodia's Song Saa Island is offering property opportunities in this exciting new market. The development has 14 one and two bedroom units with pricing starting from US$200,000 (approximately THB 6.7 million). There is a guaranteed yield of 10% for the first 3 years.
CBRE is handling sales and marketing, with a product launch tonight at Twinpalms Catch Beach Club. There remains a buzz on beachfront and island property in southern Cambodia so expectations are to see property offerings very soon.
Leading Thailand hospitality firm Amari Hotels and Resorts have launched a mixed use project in Hua Hin under the groups property development arm Amari Estates. First in the works is the Hua Hin Amari Residence which is targeting the condo hotel market. Development plans have reportedly also called for a project in Phuket on a 50 rai plot.
The chain which is aggressively targeting expansion both in Thailand and internationally underwent a recent rebranding by leading agency Keen Media and will be launching new midscale, upscale and luxury brands aimed at creating a greater diversity of consumer and industry recognition.
While condo hotels have gone by the wayside in the US and Europe, they continue to stay in vogue in much of Asia's current bull run property markets.
