Phuket Property: Bangkok developers expand upcountry

PHUKET: Hit hard by high waters and high competition, many developers in the property market of Bangkok and its suburbs are now expanding their portfolios to include more upcountry projects.

Real estate markets that stand to gain the most from such a trend include Phuket, Pattaya, Chon Buri, Hua Hin, Khao Yai and Chiang Mai.

Leading property firms investing in these provinces include Pruksa Real Estate, Sansiri, LPN Development, Property Perfect, Land & Houses, Quality Houses, SC Asset Corporation, Sena Development, Charn Issarra Development, Supalai and NC Housing.

While the latest trend will mean increased competition for local developers, it will also mean that home-buyers upcountry will have more choices of quality residences at competitive prices.

According to a survey by The Nation, popular locations for expansion by leading firms are still the major tourist destinations. However, there is also growing interest in Khon Kaen, Udon Thani, Haad Yai, Ayutthaya, Nakhon Pathom and Nakhon Ratchasima, where top developers are likely to make inroads this year since such locations have sufficient population bases and lifestyle offerings similar to Bangkok.

After its successful launch of the dCondo project in Phuket, Sansiri is looking to launch a second project (condo in Kathu) this year. Phuket is the second upcountry location for Sansiri after Hua Hin.

Sansiri President Srettha Thavisin said, “Our dCondo Phuket targets local buyers rather than foreigners because many Thais from other provinces move to work in Phuket. They need to buy homes at reasonable prices.”

Land & Houses Senior Executive Vice President Naporn Soonthornchitcha-roen said Land & House had operated upcountry for more than 10 years but mostly in tourist destinations such as Phuket, Hua Hin and Chiang Mai.

Now the company is interested in expanding into populous provinces with urban lifestyles. Namely, it is looking into developing a residential project in Udon Thani province following the success of its projects in Khon Kaen.

Sena Development Director Kessara Thanyalakpark said that after last year’s flood disaster, demand for a second home on the Eastern Seaboard was growing strongly. As a result, the company decided to acquire land in Pattaya for a mixed-use project that combines housing, retail, a hotel, and serviced apartments.

Supalai Managing director Atip Bichanond said his company aims to increase the proportion of upcountry sales to 10 per cent by 2015. It is interested in developing residential projects in new destinations in both the South and the Northeast.

At present, Supalai is developing projects in Phuket, Bangkok, Khon Kaen and Chiang Mai.

Meanwhile, a source at a property agency in Phuket said the expansion of leading Bangkok-based developers would directly affect provincial developers since “top firms” can develop with greater cost efficiency through supply and material sourcing, and thus allow them to offer lower prices than local companies.

For example, Pruksa Real Estate launched townhouses in Phuket last year priced under two million baht per unit. The project sold out within three months. Sansiri’s dCondo project offered prices below 3mn baht per unit in the fourth quarter of last year. That project sold out within one month.

The success of these two projects shows there is a strong demand in Phuket for homes costing less than 3mn baht.

This revelation has forced property developers to diversify their offerings, beyond the high-end market and into the realm of cheaper first homes.

— The Nation & Phuket Gazette