Sunday, August 31, 2008

Boathouse taps affordability


Boathouse taps affordability


HUA HIN : Speed and adaptability help in any game of life, and the developers of Boathouse Hua Hin have applied this by introducing lower-priced townhouses in tune with the current cautious mood.

Praphaisith Tankeyura, managing director of the Cha-am based 80-rai development bordering Hua Hin beach, said that instead of building 13-million-baht villas he has subdivided the land for townhouses.

The development will now feature 5.3-million-baht two-storey houses on its 24-square-wah plots closest to the sea along with 4.7-million-baht three-storey houses on 35-square-wah plots further from the sea.

There will also be semi-detached duplex houses on 46 to 66 sq wah plots, which will be priced between 5.6 and 7.9 million baht, depending on their proximity to the sea.

Reflecting a cost-conscious shift in investor sentiment over the last three years, the cheaper units are selling best.

Among locals _ who love the seaside town and make up 70% of buyers _ the strategy is also working well. Mr Praphaisith admits, though, that his company has had less success in Dubai and among Thais in New York.

In the United States, he found that parents are still attached to Hua Hin but their children ''are already Americanised''.

''They no longer want to stay in Hua Hin or Thailand,'' he said.

Two-storey houses on 24-square-wah plots closest to the sea will sell for 5.3 million baht.

In Dubai, promising leads turned out to be speculators unwilling to place a 30% down payment.

Mr Praphaisith's next target is Singapore, where he plans to participate in a marketing event in October.

But in all overseas markets, he says he faces a perception of economic and political problems that has kept foreigners away from all of Thailand's sectors.

''Overseas investors are nervous about Thailand,'' he said. ''They don't understand the real situation. As we are Thai, we know that Thaksin comes and goes, governments come and go, but the system is still here and still works.''

If this hurdle can be overcome, he claims his development can attract buyers through occupying a different niche to other resorts such as Phuket, where medium- and low-priced developments have suffered.

He dismisses Koh Samui as hamstrung by poor town planning. ''It will be a mess in future,'' he said.

Nor does he see a threat in Pattaya's continuing success.

''The buyers are not the family type,'' he said. ''It's a different market. Hua Hin is family-oriented plus you have a lot of golf courses, a lot of cultural attractions. We have good food and restaurants too.''

He claims Boathouse Hua Hin also has an edge over other developments because it obtained its land a few years ago at only three million baht a rai _ rather than at the 50-million-baht price tag prime plots carry today.

''Our condominiums are selling for less than 100,000 baht a square metre. On the top floor it's around 90,000 baht (a square metre). On the lower floor it's around 60,000 baht,'' he said.

The advantages of starting early carry into construction.

''When we signed the contract with Christiani and Nielsen to develop the infrastructure, one barrel of oil was only 37 dollars,'' he said.

As with many developments in the current inflationary context, Boathouse Hua Hin is being built with a focus on costs and with the application of value engineering to increase construction efficiency.

The potential risks of overlooking such considerations, says Mr Praphaisith, are illustrated by a Bangkok-based property company that failed to lock in construction costs before selling 70% to 80% of its units.

Mr Praphaisith said he hoped that all of Boathouse Hua Hin's 40 townhouses and duplex houses would be sold this year. Construction of these relatively simple structures should then start next year and finish by the end of 2009.

The selling of units in two more condominium buildings would then be launched, with construction starting once 40% are sold.

He added that Boathouse Hua Hin was launched with an 800-million-baht bank loan _ in addition to 720 million in cash _ and that he hoped 500 million baht would be repaid to the bank by the end of this year when units in the project's Condominium C will be transferred to buyers.

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