Apichart Chutrakul, Chief Executive Officer, Sansiri Public Company Limited (pictured), gave an EXCLUSIVE interview to Kanchana Paha, Thailand editor of DDproperty.com, ahead of his companys appearance at the PropertyGuru Thailand Property Show in Singapore this weekend.
Q. Looking back at the events of May 2014, we expected no dip in both property prices and demand. Did Sansiri see any decline in either prices or demand from local or overseas buyers?
A. Property is a long-term asset. Any short-term events or incidents like political issues will not have a strong impact on price or demand. Buying or investing in a property is a long-term will; whatever happens people still need a place to live, so some people dare taking a risk even during the worst situation. But of course it might affect buyers confidence for a certain period of time. Overseas buyers with good vision would understand that the incident in May was just a glitch in the timeline.
Q. Have you been forced to re-think your plans because of what can best be described as an unexpected rise in consumer confidence and demand for condominiums?
A. Wed rather stick to the plan, but what we would do is more on adapting the way we work. For example, we focus on how to get the EIA approve quicker, and also on our human resources rather than increasing the number of new project launches. Regarding demand for condominiums, it will be continuously increasing as people tend to prefer living a condo unit to a big house. Its safer, more convenient and more suitable with todays modern lifestyle.
Q. Do you share the worries of CBRE Thailand that there are too many one-bed condominiums in the midtown and suburban areas of Bangkok?
A. Not really. What CBRE has seen might be just one side of the story, while on the other side there is always demand for city condos. If you ask the new generation buyers what they would buy as their first property, most of them would go for a condo unit and it wont be a big one though. In terms of amount, it might sound a lot but not oversupply in my opinion.
Q. Do you also agree with their suggestion that there are not enough two- and three-bedroom units in central Bangkok that are of expatriate standard meaning they would be suitable to rent to expats?
A. I do agree. Expats, especially Americans and Europeans, prefer living in a bigger unit as they live with their families so the size theyre looking for always starts from two-bedrooms.
Q. Have you implemented any plans ahead of AEC 2015?
A. We have already expanded to major cities with high potential of labour influx, such as Chiang Mai, Chiang Rai, Khon Kaen, Udonthani, Hat Yai, or even in Phuket where theres a lot of people working in the hospitality field.
Q. Can you summarise the concept for both The Base and dCondo the projects you will be exhibiting with us this weekend in Singapore?
A. dCondo is designed for people of working age who prefer a small unit with basic facilities at affordable price point - starting around THB2 million - and also for new investors who want to try the market. The Base is the upgrade version with a bigger unit size but less unit numbers. Its more for foreign buyers who are quite familiar with life in Bangkok.
Q. Phuket resort properties, such as your own Baan Mai Khao, are regularly exhibited overseas but these developments are located in the centre of the island. What advantages would they have over resort properties or developments closer to the coast?
A. Unit sizes in these projects will be smaller so its suitable for investors or buyers who want to try the market. For investment, small units tend to rent out easier and in Phuket you can rent out to local expat workers who work in hospitality business and so on. I believe that the return on investment for resort properties is a bit lower than a city condo. Believe me, its not easy to rent out a THB20 million property!
Q. One question we often receive about properties in Phuket is rental yields. Firstly, what can investors really expect and secondly who are the typical tenants for these properties?
A. Better yields when considering price per square metre. The projects are in good locations with convenient access so theyre value for money. The main tenants are local expat workers including ASEAN workers who are looking for a good quality property for rent with limited budget. Also Russians and Scandinavians.
Q. Finally, what would you suggested to buyers who remain nervous about investing in Thailand property?
A. Thailand is an easy-living country and we take good care of foreigners. Foreigners have the same privilege in property buying as the Thai buyers. Most condos in Thailand are freehold unlike in Australia or other countries where properties are sold on a leasehold basis. Theres no annual property tax in Thailand, unless you rent it out. We pay only once during the unit transfer process.
Andrew Batt, International Group Editor ofPropertyGuru Group, edited this story. To contact him about this or other stories firstname.lastname@example.org