In discussions with the SEPCO Asia Group PLC who are restructuring Lersuang's Tamarind Hills, thephuketinsider has learned of plans to expand rehab plans to Turtle Cove, Plantation Kamala Phase 2, and the Pornsawan Grand Tower in Phuket Town. SEPCO has formed a new company Radical PLC. The company is planning to enter the SET (Stock Exchange of Thailand) over the next few years.
Mai Khao's Turtle Cove is another of Lersuang's condominium projects which has been stalled, partially completed and then stopped for a number of years stranding purchasers and seeing the land on which reportedly lays mortgaged to outside interests when the company become insolvent.
Kamala's Plantation project in which the initial phase was completed and handed over has a second phase on 34 rai which was planned to have condominiums and villas which had some site and villa construction prior to running into cash flow problems, and ended up in tight credit issues with a financial institution. Work has been stopped for an extended period of time, while the area surrounding it has developed into some of the island's most expensive real estate.
Phuket Town's Pornsawan Grand Tower Project consists of 72 condos in a ten story tower with shopping and commercial space on the lower levels. Radical PLC will only pursue part of the redevelopment of condos and some commercial space.
Radical has tapped into financing sources with the Government Savings Bank (GSB), MFC Asset Management PLC (whose major shareholders are Thai Military Bank (TMB), Government Savings Bank, and the Thai Ministry of Finance. It will also be sourcing private equity for the Pornsawan project.
There remains no news for purchasers at the Lersuang Groups failed Infinity Heights and Lersuang Village projects. We have received a number of buyer comments and emails from mothballed developments including Purnavarna, Stoney Monday, Baan Talay in Layan and the two other Lersuang Projects but these appear to all be on hold at the moment.
Clearly we are now seeing a tipping point over the past few months where Thai investment banks and lenders are seeing the light at the end of the tunnel for Phuket's residential market and are looking at placements mostly back of local firms or established businessmen with previous track records. It's a significant shift in what had been an industry which at the resort grade real estate level had been dominated by foreigners is now seeing take up by Thai's who have access to local debt and equity.
One of today's emerging debt market's are the petro dollar driven Islamic Finance Funds. Aside from a logical base in the Middle East, the UK, and in Asia counties such as Malaysia, Indonesia, now Thailand is seeing these unique products emerge. Within this country we have already seen some property projects source funding in this arena.
There continues to be many idiosyncrasies to the operations and principals vary much from traditional bank or private equity funding. Fundamentally Islamic Sharia law forbids lending for profit so cannot charge interest, wide disclosure is required and sectors such as those involved gambling, and alcohol are not allowed. Due to the unique situation return thresholds are lower then most market rate and common methods to work within a rigid framework are leasing, or the sharing of profit and losses.
This risk adverse mandate has somewhat sheltered the sector from the current financial crises and poses an attractive source of funding. Going into the next decade as oil rich countries continue to have excess liquidity the modern Islamic Financing industry is set to become a major play it the financial markets.
In the latest development of the financial scandal involved Rakesh Saxena a new link has been reported in the local media between former Phuket property developer Malaysian national Valentino who had been arrested in a Phang Nga property case and is not thought to be evading the law after being released on bail.
Valentino who had been accused of fraud with land titles on Phang Nga's Koh Yao island was charged with encroachment and illegal documentation. The case played a significant role in the financial failure of the Bangkok Bank of Commerce and the latest connection is Saxena who was recently extradited back to Thailand from Canada.
Thai listed Charn Issara has announced the launch of seven new units in Phase 4 at luxury development Sri Panwa. Priced from US$6 million and above; in a move signaling a strategic opportunity in the currently dwindling luxury villa market for the island. During the current challenging economic and political climate there has been a significant lack of upscale property launches this year and demand has been driven into the resale market.
There was an increase in the hotel private pool villas last December with 23 units in 1 and 2 bedroom configurations which were retained by the developer and operated as part of the exiting hotel. The hotel now operates 41 pool villas as a resort operation along with a residential estate.
For the past few month's since doing a piece on the launch of the residential and commercial development Explorer Phuket I couldn't help but notice that despite the colorful hoarding and marketing materials on the high profile site in Cherngtalay, that no work was underway.
We have clarified with the developer and the update is a sales launch will be done in February of next year. Infrastructure will commence in 2010 and take one year to complete. The project which has commercial spaces, condos and villas will be built in phases.
Bangtao's Mandala luxury condominium project has adopted a trendsetting completion launch strategy aimed at offering purchasers fully completed units to move into. Comprised of 24 total units with 18 spacious two bedrooms with a total internal area of 190 square meters and 6 three bedroom condos up to 270 square meters with private pools for the top end penthouses. Prices start at THB 17.5 million baht for two bedroom condominiums.
A show unit is now finished and is ready to view and the developer who also completed the adjacent Baan Mandala villa project will complete the first building in March and remainder by June of next year. One of Phuket's highest quality builders DCM has done the project construction.
Located near to the beach which plays host to Laguna Beach Resort, the nearby Tawan Properties Saisawan and John Gold's Casuarina Shores resort apartments. The marketing tactic looks timely as many purchaser's are now electing to look at the secondary market or completed projects as a priority with concerns on taking on any development risk in what has been uneasy economic times.
One of Phuket's highest profile default ridden developments Tamarind Hills has been restructured and is in the process of project rehabilitation according to new Managing Director Dr. Metta Visessombat who also heads the energy group Sepco Asia. thephuketinsider spoke to Dr. Metta today at the companies new offices on Ban Don Road in Cherngtalay and was updated on the current status of play.
Tamarind Hills which was developed and managed by Lersuang Group has now changed name to Tamarind Hills Layan Co. Ltd; with the former management now fully resigned. Comprised of 142 condominium units of which a total 80 had been sold previously. Designed and launched in two phases with 54 in the first part of which 30 were sold, and 24 units remaining for sale. Phase 2 of 88 units with 50 sold and 38 still for sale.
A sales relaunch is planned for mid December with the remaining units in Phase 1 (24 condos) for sale. Arrangements for financing have been made with the Government Savings Bank who will be bridging loans to recover the ownership of the land which had been secured by third party interests and fund construction to completion. Existing buyers have been offered the ability to retain their units though a premium of 15-20% over the original price in a financial workout scenario. The majority of purchasers have consented to the remedial measures with strident controls of funding and accountability on place. The new developer is now looking at completion and handover starting in April of next year of the initial condos.
The Lersuang Group whose unfinished projects in Phuket include Lersuang Village, Infinity Heights, and Turtle Cove along with another development in Hua Hin were unavailable to comment on this news story. Buyers in Tamarind Hills at launch funded payments into offshore accounts reportedly under the custody of the now defunct Lighthouse Group of Hong Kong. There remains a number of answered questions with the original developers as to the disposition of funds paid to them and also the other mothballed projects. Additionally the situation of a developer who has allegedly transacted land on which they had sold units continues to create unease for many of the purchasers.
From our discussions with Dr. Metta it appears that the current rescue plan has been painstaking methodical and at face value looks to reach some closure for purchasers who bought property and have been in a state of flux for a number of years. There remains no clarity on the status of the other three developments which are tied into separate entities; but the situation does amplify the need for anyone contemplating buying property to seek qualified legal advice.
Bali is indeed buzzing these days and iconic designer label Bvlgari and the property developers have announced plans for 5 luxury residential villas adjacent to their already open jet set resort. Priced from US$6 million and up, the design is being handled by Antonio Citterio.
Bvlgari operates as a joint venture with Marriott International and is somewhat independently positioned as is their Ritz-Carlton brand. Despite the hangover from the GFC (global financial crises) there continues to be wealthy high net worth individuals seeking resort homes worth multiples of millions.
In the resurging Island of the Gods Bali, real estate has continued to make headway and is now positioned as a key competitor to Phuket in terms of overseas buyers.
Thailand's largest annual property awards were held on the weekend by the leading real estate publication Property Report Thailand with Raimon Land's The Heights and Allan Zeman's Andara scoring awards. With over 1000 nominations this year and 450 people in attendance at the Grand Hyatt Bangkok the two projects won in the categories for Best Condominium Thailand and Best Villa Development Phuket and Thailand respectively.
Andara also won in the Best Architectural Design, with CBRE named as Best International Agent as well as top website and Indigo rounding out the independents. All together the night belonged to Andara who bagged 4 awards for its landmark Millionaire's Mile project which has changed the face of Kamala property.
Publisher Ensign Media who deliver the high quality glossy Property Report Thailand and sister publication for the Singapore/Malaysia/Indonesia market continue to be a leading source of information on the industry and continue to do a great job in promoting real estate in Phuket to a global marketplace.
