Casavela to offer 6% yields

Builder embarks on Samui project after selling out Clover estate

When Aquarius chief executive Yongyuth Chaipromprasert quit as Plus Property Partner's head in 2005, to set up a real estate development company to tap niche sectors not served by big developers, he was prepared to compete aggressively.

"My first project was The Clover, a middle-class medium-rise condominium on Soi Thonglor," he recalls. "When we launched in 2005, the market was very quiet after undergoing a correction, with many projects suffering a glut of supply from the 2002-2004 condo explosion on Sukhumvit".

"But Clover drew very strong sales because it was priced about Bt60,000, with its smallest unit going for Bt1.9 million," he says. "Everyone else was priced much higher and the market for the top end had fallen out."

To compete, Yongyuth offered small units with 2.4 ceiling heights to reduce construction cost and make units more affordable to mid-range buyers.

In time, The Clover, with about 500 units, was fully booked. Buyers can move into the project when it is built in 12 months from now. Resale prices had surged meanwhile by 40 per cent to Bt85,000 a square metre, he says.

Yongyuth has moved on to a number of new projects, serving land owners who require professional team to run their real estate operations. He is now busy with two new companies.

The first is with Prueksa, a listed property firm to construct two condominium projects in Bangkok sometime this year. The sites at Rat Burana, Thon Buri and Rachadapisek off Suthisarn, are estimated to be worth about Bt2.5 billion.

He is also currently finishing up a project in Samui called Casavela, a beachfront "hotel-condominium" at Laem Satt Beach, on he southeast side of the island.

In all, he is building 32 large units from 2-bedroom units from 150 square metres each to 3-bedroom units from 220 square metres each.

He is selling the fully furnished apartments from Bt13 million-Bt19 million, or roughly for Bt85,000 a square metre. "Our company succeeds because we provide more personalised service to clients and offer buyers competitive pricing, that is lower than the competition."

While many properties on Samui target foreigners with million-dollar-homes (Bt40 million), Aquarius is largely catering to local buyers. "Our buyers are 70-80 per cent Thai," with the remainder being mostly British, German or Scandinavians," he says.

"Because we are more local, we are less affected by the recent negative fall-out from the new regulations for foreign ownership," he adds.

But Yongyuth is critical of the deterioration in the business climate by fiscal authorities, that until lately have been more prudent in encouraging overseas investment.

"Regardless of who is in government, the ultimate responsibility is for them to foster consumer confidence," he said. "Confidence is the most vital quality that is missing today. Without it, even people with plenty of cash are reluctant won't buy homes as they fear for their future."

Casavela has been fortunate because of its modest size. About 70 per cent of the units are booked, he said leaving about a dozen units.

"Mind you this is more of an investment vehicle rather than purely housing product. Casavela is not meant for retirees wishing to live here permanently. For them, there are other places in Samui to choose from."

"Our is a hotel-condominium arrangement where buyers will receive a minimum 6-per-cent guarantee rental income annually for three years. Of course they also get to use the unit for 60 days a year."

The set-up is almost like the leasehold arrangements for villas and condos at Phuket resorts such as Laguana and Marriott.

The difference is the units are freehold here and there remains some longer-term concerns over how legal matters apply to buyers and sellers who have to work together after the purchase agreement is transacted.

Itthi C Tan

Thailand News
The Nation Thailand
Friday January 26, 2007