Central Group grabs Ploenchit Road for record-breaking 16 million baht per square metre

The land price per square wah in the heart of Bangkok is set to smash records, with Central Group snatching up a plot on Ploenchit Road from the Sukosol family at 4 million baht per square wa (16 million baht per square metre).

This coveted three-rai plot, formerly the Morakot parking lot nestled between Central Chidlom and Soi Somkid, has been a hot topic among developers since 2018. An insider source revealed that the Sukosol family resisted previous offers but a new player has entered the game: the relentless rise in land and building taxes.

The game-changer came with the implementation of the land and building tax in 2020, now reaching its full-rate collection this year. Additionally, new appraisal prices introduced last year are nudging even the most stubborn landlords to reconsider their holdings.

The Treasury Department’s latest bombshell indicates a staggering 11% surge in the appraisal price of land on Ploenchit Road for 2023 to 2026, soaring to 1 million baht per square wa from the previous 900,000 baht (2016 to 2022). This seismic shift means that a 3-rai plot (4,800 square metres) on Ploenchit Road, with an appraisal price of 1.2 billion baht, would be slapped with a colossal 7.2 million baht tax bill.

Wutthiphon Taworntawat, the managing director of commercial property developer UHG, revealed how the land and building tax has landlords across the city scrambling. Some are offering discounts of 30 to 40% from their initial asking prices, opening up opportunities for shrewd investors.

Phattarachai Taweewong, research and communication director at property consultant Colliers Thailand, unveiled the shifting landscape. Prime locations are witnessing a trend towards leasing lands or joint venture developments as landowners think twice before parting with their valuable plots. The central business district remains a hotspot, with developers undeterred by soaring prices, reported Bangkok Post.

Annual increase

In Sathon, land transactions closed at a staggering 2 million baht per square wa in late 2022, a sharp rise from the 2017 deal at 1.45 million baht. Meanwhile, prime Sukhumvit zones are witnessing a 10% annual increase, with some Thong Lor deals hitting a historic 2.86 million baht per square wa.

Colliers reported a whopping 26% surge in the value of land and building transactions nationwide for the first three quarters of 2023, reaching an impressive 780 billion baht. Despite a pandemic-induced slowdown in 2022, the property market is roaring back to life, with developers setting their sights on outer city locations and new mass transit lines.

Photo courtesy of Bangkok Post