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<img alt="A co-working space. Phichat Phruksarojanakun/Shutterstock" src="/documents/10204/0/shutterstock_1051332527-%281%29-compressor.jpg/a1f82c72-e90b-46b3-9c34-f11b7acb9aaf?t=1546499130165" style="width: 1400px; height: 640px;" />Sand in your toes, a light sea breeze ... It wasn’t too long ago that the cliché of a coworking space in Asia centred on dreadlocked digital nomads island-hopping through a professional gap year. And while small business owner-operators can still plug in from a beach shack in Canggu to confer with their factory in Guangdong whilst managing sales in Atlanta, research by Colliers reveals the share of freelancers and independent workers using flexible workspaces dropped by 15 percent over the three years ending in 2017. It’s not that fewer are living the laptop life; no, the flexible workspace market has exploded in Asia-Pacific over the past five years thanks to the enthusiasm of far bigger players on both the supply and demand sides. Big international operators are moving aggressively into the region, including WeWork, which opened its 200th location globally in Singapore in 2017 and is sending its coworking tentacles across Southeast Asia. Major property owners are getting into the act, partnering with flex-space companies and launching their own brands. Governments, noting the benefits of entrepreneurs to their economies, are adding their backing. And multinationals, employing what is referred to as a hub-and-spoke or core/flex approach, now consider flexible spaces an integral piece of their permanent operations, either locating entirely in such real estate or shipping younger, more mobile departments to such “off-sites”. Taken together, it’s little surprise that JLL Research found flexible space stock across Asia-Pacific charting a compound annual growth rate from 2014 to 2017 of 35.7 percent (compared with 25.7 percent in the United States and 21.6 percent in Europe), and the total stock managed by major operators growing by 150 percent. <div class="pull-quotes-container">Everyone is familiar with the dotcom-boom-era ping pong tables, in-house baristas, and—for the luckiest ducks—free beer. They’ve been joined by a sophisticated suite of options appealing to a more diverse, and increasingly corporate, clientele</div> Thailand alone has seen coworking spaces grow from four in 2012 to 132 in 2017—a figure expected to increase by 25 percent in 2018, according to Phattarachai Taweewong, senior manager at Colliers. By 2030, JLL predicts flexible space to comprise 30 percent of corporate commercial property portfolios across Asia-Pacific. Everyone is familiar with the dotcom-boom-era ping pong tables, in-house baristas, and—for the luckiest ducks—free beer. Such mancave perks haven’t gone the way of AOL IMs in this generation, but they’ve been joined by a sophisticated suite of options appealing to a more diverse, and increasingly corporate, clientele. More than letting networking happen organically, flexible work firms are purposefully creating programming and designing interiors to facilitate interaction. Hubba, Thailand’s homegrown first coworking space, has four distinct outlets in Bangkok each catering to different fields, from tech start-ups to artisans and craftsmen. Hubba offers a spectrum of useful seminars (Powerpoint pointers, customer-journey mapping), as well as personalized assistance with management, staffing, and even design. Spaces, another popular player in Bangkok, prides itself on style and flexibility, letting clients reserve anything from a locker to an enclosed area for a team. Their Chamchuri Square location won Best Co Working Space Development at the Property Guru Thailand Property Awards 2018—just a little piece of the global coworking operator founded in Amsterdam in October 2008. “And then Lehman Brothers collapsed,” the founders write on their website. “We thought this would be the end of it for us. But actually, we fit right in that spirit of age. Because of the crisis, everybody was re-thinking work.” <img alt="Artist’s impression of Spaces Chamchuri Square, winner of Best Co Working Space Development at the 13th PropertyGuru Thailand Property Awards" src="/documents/10204/0/SPACES-CHAMCHURI-SQUARE-%281%29-compressor+%281%29.jpg/bd56bf05-7b44-4009-9903-5c9fdcf5eaab?t=1546499897860" /> The Executive Centre (TEC), a pioneering Hong Kong-based flexible space provider founded in 1994 by Paul Salnikow, who had been seeking short-term office space for a Japanese firm expanding to London, credits the GFC as a gamechanger. “Prior to the financial crisis, TEC interacted with multinationals only when they were opening an office in far-flung locations,” says Pebble Lee, global public relations manager. Today, in Hong Kong alone, 67 percent of their clients are multinationals, including Apple, Morgan Stanley, Facebook and Twitter. TEC now has 20,000 members in Grade A offices in CBDs across 30 markets, having added 23 locations in 2017, and is expecting 30 percent annual growth from 2018. Beyond such prestige fittings as height-adjustable standing desks by 9AM, Herman Miller chairs, and Timothy Oulton furnishing, TEC is about all about innovation, their Hong Kong headquarters a “test kitchen—a place to trial new design concepts, products, and technologies,” Lee says. However, potential barriers belie the stunning growth of coworking spaces in the region. “Corporate culture in Asia tends to be more hierarchical, and not always in sync with the casual, flexible atmosphere,” says JLL research. “According to one industry observer, ‘In many markets across Asia Pacific, space is a reflection of status.’ Large organizations place high value on retaining brand identity and culture. Such concerns, along with the need to protect trade secrets and secure IT infrastructure, must be addressed.” It’s why the most sophisticated players act not only as builders, gatekeepers, event-planners and consultants, but also full-time IT departments, and in the case of WeWork, corporate fit-out contractors and developer partners. <img alt="The common areas at a WeWork co-working space in Sanlitun, Beijing" src="/documents/10204/0/20180522_WeWork_Sanlitun_-_Common_Areas-7-compressor.jpg/602f832b-9c5c-47ea-afd9-2ca967c54ca6?t=1546500194327" /> And those developers are coming in hot. A handful of large landlords control the supply (in Singapore’s CBD, the 15 largest landlords control 75 percent of Grade A office buildings; in Hong Kong East, three landlords run 80 percent of office buildings), entering the flex-space market themselves. Swire in Hong Kong—which has created its own brand, Blueprint, and inked deals with WeWork and The Great Room—and Ascendas in Singapore, says JLL, have realized they “can add value to their buildings and maintain or even extend their relationships with tenants by offering a diverse portfolio of core and flex space.” Even hotels have followed suit, looking at their business centers as community lounges, particularly in cities not recognized as regional commercial capitals. In Yangon, Shangri-La Group has opened a branch of FlySpaces. The new Shangri-La Hotel, Colombo, has a gorgeous new space called Co-nnect, with pods, private offices, meeting rooms with smart boards for both hotel guests and residents of the capital looking for a prestigious address to conduct business. <a href="http://property-report.com/detail/-/blogs/better-together-making-the-most-of-mixed-use-developmen-4" target="_blank">More: Making the most of mixed-use developments</a> While it’s easy to be cynical about the corporatisation of what was once considered a hippy-dippy industry, you might say global expansion has brought the coworking market full-circle. In a recent survey by TEC, members say they value their community as defined by connecting, networking, and collaboration. The firm will soon roll out a client portal, MyTEC, enabling members worldwide to connect directly, give advice, help grow their businesses, and maybe start new ones. The way they might have found common ground while chilling in hammocks in a wired-up beach shack. It may not be sand-between-the-toes, but it is pie-in-the-sky community-minded. And isn’t that the whole point? This article originally appeared in <a href="https://magzter.com/TH/PropertyGuru-International-(Thailand)-Co.,Ltd/Property-Report/Business/" target="_blank">Issue No. 151</a> of PropertyGuru Property Report Magazine

Common grounds: the year in co-working spaces

<img alt="The Golden Bridge is lifted by two giant hands in the tourist resort on Ba Na Hill in Danang, Vietnam. Quang nguyen vinh/Shutterstock" src="/documents/10204/0/shutterstock_1152454088-compressor.jpg/4f08053b-085b-4c75-8a7c-2949990f1434?t=1546414490784" style="width: 1400px; height: 640px;" />Secondary markets may not offer the same dynamic business environment as Asia’s major cities. But with Chinese money pouring into the region and sunny seaside resorts developing into worthy digital hubs they offer fertile ground for big returns. In Cambodia, secondary markets have grabbed international headlines in the past year. Sihanoukville, on the southern coast, has been the poster-child for Chinese investment. Also growing in appeal is Poipet, a lesser-known city bordering Thailand. Speak to any tourist or expat who has at some point crossed the border into Poipet, and they’ll rarely have anything good to say about the place. In the absence of any real industry, Poipet has long been synonymous with rip-off merchants, scammers, gamblers, and other unsavoury sorts—a place where visitors cannot wait to leave and where respectable businesses fear to tread. But things appear to be changing. Since economic zones were launched, and a railway line linking Bangkok to Poipet and Phnom Penh completed last July, the city’s property market has taken a surprising turn. “Many investors from the outside are eyeing Poipet as a great investment destination,” says Hor Kunthea, CEO of Sokha Residences Group. Poipet, with its 30 odd casinos and a growing manufacturing industry, is seeing an expanding Chinese and Korean expat community, mirroring the early rumblings of Sihanoukville’s growth spurt. Sixteen real estate projects were completed in 2017, putting more than 1,500 units onto the market. Adding to this, Poipet governor San Sean Ho has announced the government will build a golf course, an artificial river, a giant garden, and floating market. <div class="pull-quotes-container">In Sihanoukville, the market continues to ride its own investment boom. The sleepy town has undergone immense transformation from a faded backwater to a town jacked up on Chinese cash</div> In more established Sihanoukville, the market continues to ride its own investment boom. The sleepy town has undergone immense transformation from a faded backwater to a town jacked up on Chinese cash. Sotharoth Som, managing director of KHCN Investment and Development Co., Ltd, the developer of the 43-storey Seagate Suite project in Sihanoukville, reports rental prices across the board have gone up five to 10 times, with those closer to the city centre being most expensive. Som says foreign investors, mainly from China, are driving the boom, as they “seek the opportunity to obtain higher rental yields than what is offered in their home countries, along with capital appreciation and low barriers to entry.” <img alt="Sihanoukville’s Best Residential Development, according to the PropertyGuru Cambodia Property Awards 2018, is The Seagate Suite" src="/documents/10204/0/The-Seagate-Suite-by-KHCN-Investment-and-Development-Co-Ltd-won-Best-Residential-Development-%28Sihanoukville%29-at-the-Cambodia-Property-Awards-2018-for-web-151-compressor.jpg/140feb7c-54d2-4699-b8b8-c9545624ce84?t=1546416006849" /> “The Sihanoukville market has emerged as an alternative condominium hub to the Phnom Penh market,” adds Som, pointing out, however, that compared to Phnom Penh, it is still in its infancy. Elsewhere in Asia, secondary cities are similarly enjoying Chinese-powered boosts as ties with the country strengthen. In the Philippines, warmer relations with China have seen developers benefit from rising demand from Chinese employees and investors, while partnerships between Filipino and foreign developers are expected to increase. <img alt="Artist’s impression of The Courtyard at the Residences at The Sheraton Cebu Mactan Resort by Appleone Mactan Inc. (AMI), which took home the prize for Best Luxury Condo Development (Cebu) at the Philippines Property Awards 2018" src="/documents/10204/0/The-Residences-at-the-Sheraton-Cebu-Mactan-Resort-by-AppleOne-Mactan-Inc.-%28AMI%29-won-Best-Luxury-Condo-Development-%28Cebu%29-at-the-Philippines-Property-Awards-2018-%282%29-compressor.jpg/369bf1c1-12b0-4670-96f9-b52428e516d8?t=1546415703153" /> “Leasing of condominiums in the secondary market remains strong, resulting in lower vacancy and arresting the decline in rents,” states a recent market update by Colliers International, a real estate services company. “Developers should look at housing opportunities in Cebu, Pampanga, and Laguna as offshore gaming firms have started to operate in these locations,” the company advises. Quite like Poipet, Davao City on the southern Philippine island of Mindanao is emerging an unlikely investment haven. The president’s former mayoral city once had a reputation for gun crime; today, property prices are rising. Units on Davao’s Dahican Beach, for example, now sell for PHP10,000 (USD185) to PHP12,000 per square metre compared with PHP1,000 and PHP1,500 per square metre in 2015.  “They know that locators from outside are scrambling for any available space here in the city, not only because the President is from here, but because movement of businesses into Davao City has been going on for several years now,” Adrian Tamayo, a Mindanao expert, told the Business Mirror. Meanwhile in Da Nang, Vietnam, holiday homes and tourism-related properties are in high demand. The city’s latest attraction, a 150-metre golden bridge cradled by two enormous stone hands jutting out of the rocky highlands, has become a social media sensation.  <a href="http://www.property-report.com/detail/-/blogs/rising-dragon-boom-times-continue-in-vietnam-real-esta-3" target="_blank">More: Boom times continue in Vietnam real estate</a> “The main supply [in Da Nang] is in the hospitality and tourism segment,” according to Peter Frieske, founder and managing director of Central Vietnam Realty. Tourism, he says, is rising sharply and analysts predict it will continue to do so.  Currently one of the top destinations for Chinese and South Korean visitors in Vietnam,  Da Nang received more than five million visitors in the first seven months of 2018—up 30 percent over the same period in 2017, according to the Da Nang tourism department. Of this figure, more than 1.8 million were foreign arrivals, which are up by 54 percent. “The majority of developers are building resorts, with property for sale or condotel villas that are in some way offered with management programmes focusing on returns on investment rather than lifestyle residential properties. When it comes to quality residential projects, the supply is very low,” points out Frieske, adding this is due to the lack of industry in such places. In Phuket where the market has languished in recent years—year-on-year sales dropped 36 percent in 2017—analysts are optimistic 2018 might yield better results. <img alt="The Botanica Luxury Villas won the highly competitive Best Villa Development (Phuket) category at the 2018 Propertyguru Thailand Property Awards" src="/documents/10204/0/Best-Villa-Development-%28Phuket%29-winner-for-2018-is-Botanica-Luxury-Villas-by-Botanica-Luxury-Phuket-Co.%2C-Ltd-for-web-151-compressor.jpg/0d1c6751-6bf3-4c63-8430-4b92cde23c40?t=1546415949403" /> Knight Frank’s Lalita Siriboon, associate director of research, says Phuket’s condominium market is expected to improve in line with Thailand’s economy and as the expat population on the island grows. “Demand across the market will continue to be driven upwards by international homebuyers, investors, and expatriates, especially those from Mainland China, Russia, and Australia. Besides, we expected to see a larger portion of buyers from South Korea,” she says, adding there are also government efforts to raise the profile of Phuket as a digital hub and “Smart City,” which is forecast to boost real estate in Phuket by 2020 when the project is to be completed. Unlike capital cities where business and industry will always give people a reason to live there, the jury is still out on Asia’s secondary markets. As it is, investors need to carefully decide whether these “capital contenders” really are a place to call home, or just precariously thriving off clever marketing. This article originally appeared in <a href="https://magzter.com/TH/PropertyGuru-International-(Thailand)-Co.,Ltd/Property-Report/Business/" target="_blank">Issue No. 151</a> of PropertyGuru Property Report Magazine

2018: the year in secondary property markets

<img alt="One of the top winners at the 2018 Asia Property Awards (Malaysia) is LBS Bina Group, whose LBS Skylake Residence won Best Mass Market Development (Condo) among other honours" src="/documents/10204/0/LBS-Skylake-Residence%2C-won-Best-Mass-Market-Development-%28Condo%29-for-web-compressor.jpg/ce043b3a-f941-4e8e-8c3f-88cb5bba93bb?t=1546244522761" style="width: 1000px; height: 667px;" />Spanning roughly a third of the earth’s landmass, the Asia-Pacific region is home to more than 60 percent of the world’s population—and its rapidly growing cities are beginning to feel the pinch.   The urgent need to create quality affordable housing on limited land has become a defining issue across the region, where soaring property prices and stagnating incomes have left many struggling for a place to call home.   But 2018 brought several breakthroughs on this critical front. Recent elections ushered in new administrations in Hong Kong, New Zealand, and Malaysia, all promising to cure their respective housing crises as a top priority.   Innovative design and urban planning firms have cropped up across Asia, breathing new life into mass housing developments and putting sustainability front and centre.   Singapore’s public housing scheme, created in the 1960s, still shines as the region’s gold standard. Today, more than 90 percent of the city-state’s 5.6 million residents are homeowners. While the Singapore model isn’t easily exportable, many of its neighbours are finding their own unique solutions.   Malaysia suffers no shortage of innovative developers; with more land and lower costs than neighbouring Singapore, the Southeast Asian nation seems to be enjoying a steady emergence from its years-long property malaise.   <a href="http://www.property-report.com/detail/-/blogs/better-together-making-the-most-of-mixed-use-developmen-4" target="_blank">More: Making the most of mixed-use developments</a> Political headwinds may have helped. In May, Malaysian voters decisively ousted the administration of former Prime Minister Najib Razak, who was deeply embroiled in the 1MDB embezzlement scandal. The new government of Mohammad Mahathir, who returned to power at the age of 93 on a promise of cleaning up corruption and shoring up investor confidence, swiftly began a wholesale undoing of Najib’s policies.  Home-grown firms were more than ready for change, and have seized the opportunity. LBS Bina Group, based in Kuala Lumpur, is among the most prolific when it comes to creating large scale, community-oriented housing, launching successful projects in the Klang Valley, Johor, and Kuala Selangor.   LBS Bina swept this year’s Property Guru Asia Property Awards, recognized as Malaysia’s Best Developer and making off with a cache of other honours for innovation in mass-market condominiums, corporate social responsibility, and sustainability.   Having already gained a strong foothold, the firm now seeks to lead the way by lowering construction costs through an industrialized building system of pre-cast concrete that reduces the need for labour. Ong Wei Ling, a spokesperson for LBS Bina, says the method results in “cleaner, neater, and safer construction sites” completed in a fraction of the time, “helping developers deliver value to investors or buyers awaiting their dream home.”  Other firms such as UEM Sunrise Berhad, one of Malaysia’s largest developers, and OCR Berhad Group have been among the most strident designers of affordable housing, the latter serving as project manager for the massive Yayasan Pahang development in Mukim Penor. Once completed, it is expected to create roughly 25,000 units. <img alt="Citiesto by Kien A Corporation won Best Affordable Condo Development (Ho Chi Minh City) at this year’s Propertyguru Vietnam Property Awards" src="/documents/10204/0/Citiesto-by-KIEN-A-Corporation-for-web-151-compressor.jpg/e31235f8-535d-4ba9-bff8-7a3d7b04126e?t=1546244571355" /> Smaller than the U.S. state of Rhode Island, with nearly seven times the population, Hong Kong is home to about 7.4 million people crammed into 2,754 square kilometres packed with high-rises divvied up into miniscule units. Year after year, this semi-autonomous region of China is named one of the most expensive cities in the world, a vital gateway between East and West that costs an average of USD28,000 per square meter.  “The Hong Kong problem is quite unique and is complicated by the fact that Hong Kong just doesn’t have enough land,” says David Ji, director and head of research and consultancy for greater China at Knight Frank. “They have to squeeze as much out of it as they can.” This conundrum has put Hong Kong’s policymakers in the uncomfortable position of having to either create new landmasses or convert older properties for new use.   <img alt="Topped by an exclusive rooftop garden, Star Polaris 23 by Borey Peng Huoth Group won Best Affordable Condo Development in Phnom Penh this year" src="/documents/10204/0/Star-Polaris-23-by-Borey-Peng-Huoth-Group-for-web-compressor.jpg/6ecefbf3-e21a-4c56-b225-1a0cc998322b?t=1546244589690" /> Chief Executive Carrie Lam, who assumed the territory’s highest office in 2017, has said solving the city’s housing crisis is among her top priorities. While plans to build affordable housing on roughly 1,700 hectares of artificial islands—a project called Lantau Tomorrow Vision—have come under criticism, she may have few viable alternatives to land reclamation. Property experts say Lam has made strides with long-term housing goals, but is bound to face opposition because she has yet to come up with short-term solutions to help the many Hong Kongers who need homes now.   “A comprehensive proposal has been tabled, which has never happened before, and as a long-term proposal this is a positive step,” says Ji. “But all these measures are planned far in the future, we’re looking at five to 10 years down the line, and buyers still find it difficult to get on the property ladder.” While prices have risen for 20 consecutive months, Ji says he expects some relief by year’s end.   <div class="pull-quotes-container">People are rethinking affordable housing—not as a burden that nobody wants to build, but trying to put affordable housing into private developers’ plans</div> Several governments in the Asia-Pacific have also moved to limit foreign ownership—due in part to concerns about Chinese expansionism—but experts say these policies are misguided. New Zealand’s recent ban on foreign residential sales prompted the International Monetary Fund to warn that the policy was discriminatory.   When Malaysian premier Mahathir suggested curbing foreign ownership of units in the USD100 billion Forest City project, the idea sent a chill through the investment community. “Permitting foreign investors to buy new housing obviously increases demand for housing,” says Brendan Coates, a fellow at Melbourne-based think tank the Grattan Institute, “but supply also increases if foreign investors enable developers to build more housing than otherwise.”   China’s own reform of land and financial policies are working to keep investors well within its borders. Outbound capital limits have led many Chinese to invest closer to home, while land use regulations have been altered to require a percentage of mixed-income housing on large scale property developments to meet growing demand.   “I think in the greater China region, people are rethinking affordable housing—not as a burden that nobody wants to build, but trying to put affordable housing into private developers’ plans,” says Ji, of Knight Frank. “The trend is changing from ‘whoever pays the highest price gets the land,’ to a more targeted, controlled use of property.”  This issue originally appeared in <a href="https://magzter.com/TH/PropertyGuru-International-(Thailand)-Co.,Ltd/Property-Report/Business/" target="_blank">Issue No. 151</a> of PropertyGuru Property Report Magazine

Affordable housing sets the agenda in Asia-Pacific

<img alt="The lake at Celadon City, winner of multiple PropertyGuru Vietnam Property Awards this year, including Best Mixed Use Landscape Architectural Design" src="/documents/10204/0/Sustainability-year-end-special-151-for-web-compressor.jpg/f63c772c-a71a-4a89-bcde-b2cab331756b?t=1545891457562" style="width: 1000px; height: 667px;" /> Ten years ago, sprawling conurbations like Saigon or Manila—notorious for their infrastructure and environmental challenges—weren’t obvious destinations for seeking out bastions of sustainability. Today, these cities are seeing the rise of world-class projects displaying green credentials, enticing middle-class apartment-seekers who are forming an increasingly sizeable tranche of society in Vietnam and the Philippines. By 2020, Vietnam’s average annual per capita income is predicted to almost double, from USD1,735 in 2016 to USD3,400. With its large population of citizens under 35 transitioning from a primarily rural economy to an urban one, Vietnam’s property market is proving a lucrative environment for developers, tenants, and both local and foreign buyers, with investors from China, South Korea, Singapore and Malaysia pumping huge sums into the building sector. In Ho Chi Minh City, two companies are paving the way for sustainable real estate. Gamuda Land, the property development arm of Malaysia’s leading engineering and construction group, started building its 82-hectare Celadon City in 2010, making it the first nature-inspired enclave within this traffic-choked megalopolis.  Prioritising sustainable living from the outset, Gamuda introduced such innovations as a rain harvesting system that utilises energy-efficient water tanks to collect rainfall around the property and transfer water to irrigation areas. The integrated township in Tan Phu district, home to 7,300 apartments across four precincts that can accommodate 25,000 people, won the Best Mixed Use Landscape Architectural Design gong at the PropertyGuru Vietnam awards this year. <a href="http://property-report.com/detail/-/blogs/can-green-buildings-turn-the-tide-in-climate-acti-10" target="_blank">More: Can green buildings turn the tide in climate action?</a> “Celadon City has more than 16 hectares dedicated to lush parklands [that afford] residents the privilege of enjoying nature,” says communications executive Tran Nam Phuong, adding that the Cultural Village, Central Park, the Celadon Sports & Resort Club, and other gathering places within the property offer a sense of community. It’s a concept that’s proven influential, as demand for green living spaces are increasing.  A similar success story is Gamuda City, another landmark project in Southern Hanoi, which confronted the Yen So lake area’s chronic water pollution, garbage disposal, and sewage issues head on. Far beyond building a condo, the development effected the complete rehabilitation of a polluted suburban wasteland, leading to significant public health benefits. Making major inroads into HCMC’s sustainable building boom is CapitaLand Vietnam, whose luxurious, 102-room D1MENSION development in Cau Kho is the first boutique housing development in Saigon—one among CapitaLand’s 13 green estates in the city. Themed projects including De La Sol, D2eight, and d’Edge Thao Dien offer new condominium alternatives to young professionals. “CapitaLand remains committed to building a greener future for Vietnam,” says CEO Chen Lian Pang. “Lowering our environmental footprint creates value for our stakeholders. We incorporate environmental sustainability in all stages of a project, [from] design and construction to operations.” A key wealth creator in the country, the Singapore-headquartered company—which scooped 13 PropertyGuru Vietnam awards this year, including Best Developer, Best Condo, and Special Recognition for Sustainable Development—has built almost 5,000 apartments across six other cities, from Halong to Nha Trang. <img alt="Winner of Best Green Development at this year’s Propertyguru Asia Property Awards (Sri Lanka), Clearpoint Residencies Rajagiriya come with self-sustaining gardens instead of ordinary balconies" src="/documents/10204/0/Clearpoint-Residencies%2C-Rajagiriya%2C-Sri-Lanka-by-Maga-Engineering-%28Pvt%29-Ltd-%26-Milroy-Perera-Associates-%28Pvt%29-Ltd.-won-Best-Green-Development-%282%29-compressor.jpg/98d681e9-5b00-41ed-9632-44756bcba7ae?t=1545891791227" /> In Metro Manila—another densely populated Southeast Asian city with a burgeoning  middle- and affluent class—Taguig-based ArthaLand is a home-grown leader in marrying sustainable credentials with cutting-edge architecture. The property arm of the Century Pacific group has carved a niche in the Philippine market by exclusively focusing on properties that adhere to global and national standards in green buildings. Being the only development in the Philippines to have received the coveted gold certification in the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) program, its flagship dual-towered Arya Residences in Bonifacio Global City is a milestone in the country for its design and eco-friendly features. Arya Residences’ construction naturally channels the breeze, its balconies and ledges lending natural shade into the units, adding meaningful outdoor space even as daylight reaches 75 percent into the indoors. Interiors are decorated using paints and resins with low volatile organic compound emissions, while built-in fixtures and appliances deploy advanced technology to reduce environmental impact and usage cost. Winning this year’s “Special Recognition in Sustainable Development” at the PropertyGuru Philippines Property Awards, ArthaLand emphasises human advantages. Arya Residences encourages its residents to live a more environmentally conscious, cost-efficient, and healthy lifestyle. Their advertising tagline,  “Green is the new luxury”, is echoed by Raymond Rufino, chairman of the Philippine Green Building Council. “[Sustainability should be more than just achieving efficiency and cost-effectiveness for your property,” says Rufino. “The new frontier for green buildings is improving the health and wellbeing of the people who live, work and play [within your property]. This is a more powerful argument to support going green.” Angie de Villa-Lacson, ArthaLand president and CEO, stresses sustainable architecture has a ripple effect not just for residents, but the property sector at large. “Standardising green measures is a major step in encouraging developers to take sustainability seriously,” she says. “Greening should go beyond landscape and waste management. To fully reap the benefit of sustainability, developers should be able to measure the inputs and outputs of our buildings’ eco-friendly features.” <div class="pull-quotes-container">There has never been a better time for investors to go green. And with developers around Asia adopting sustainable practices,the real estate scene in the region has rarely looked more mindful</div> Further west, Sri Lanka is proving another sustainability powerhouse, largely due to Maga Engineering, the country’s largest construction company whose work covers healthcare, hospitality, transport, and water supply. As the builders of the world’s tallest vertical garden and the first LEED Platinum-rated clothing factory, Maga comes forearmed with impressive green credentials. Its Clearpoint Residencies in the Colombo suburb of Rajagiraya is its most forward-looking residential project to date. Clearpoint’s 171 apartments come with a self-sustaining garden instead of a balcony; its planted terraces and tree plantations absorb sound, boost oxygen levels, provide shade, and reduce heat. Other eco-boasts include cross-ventilated apartments, solar panels, and an automated drip-irrigation system that keeps terraces watered.  “Each apartment functions as its own microhabitat, creating a synergy between occupants and their environment,” says sustainability director Mega Kularatne, pointing out that while Clearpoint demonstrably occupies the high-end housing category, innovations inside and outside the building—including waste water recycling which reduces main water usage by 45 percent—actually serve to reduce homeowners’ maintenance costs. With the future of the planet a pressing concern, there has never been a better time for investors to go green. And with developers around Asia adopting more sustainable practices, the real estate scene in the region has rarely looked more mindful. This article originally appeared in <a href="https://www.magzter.com/TH/PropertyGuru-International-(Thailand)-Co.,Ltd/Property-Report/Business/" target="_blank">Issue No. 151</a> of PropertyGuru Property Report Magazine

Innovative firms blaze trail for sustainable real estate in Asia

<img alt="M+S Pte Ltd took home a multitude of awards at the South east Asia Property Awards (Singapore) 2016, including Best Mixed-Use Development for the sprawling Marina One Project" src="/documents/10204/0/MIXED-USE-YEAR-END-SPECIAL-FOR-WEB-compressor.jpg/db78649c-3ab0-45c5-ba02-a715c4bc87a7?t=1545888548740" style="width: 1010px; height: 667px;" />From Singapore to Ho Chi Minh City, Southeast Asian developers are seeing the benefits of mingling business with pleasure. Self-contained communities that offer residences, retail, offices, and green spaces are emerging as the new development paradigm across a region where old ideas of city zoning are being eroded by vertical mixed-use mega-projects.   Singapore’s newly opened Marina One residential and office development has added a tropical, green heart to the CBD in the form of a 65,000-square-foot garden designed in collaboration between Ingenhoven Architects and landscape specialists ICN Design.   Jakarta’s District 8, a development of 11 towers across 4.8 hectares of the Sudirman Central Business District, has also reached completion. Developed by the Agung Sedayu Group, it brings residences and a public park right into the heart of South Jakarta’s financial zone.  In Bangkok, TCC Group’s One Bangkok (in partnership with Golden Land and Frasers Property Limited) is a USD3.5 billion development that covers an area one third the size of the adjacent Lumphini Park and encompasses living and work space for 60,000 people, including residential buildings, office towers, retail zones, and publicly accessible parks and green spaces.   “Vertical communities often deal with the high density mandated for many Asian city centres,” says Ping Jiang, the design principal at EID architecture. His firm designed the 320-metre-tall OCT XI'AN International Centre (OXIC) in Xi’an, China, where parks, piazza-style common areas, and even terrace streets are positioned over multiple storeys of two skyscrapers.    <a href="http://property-report.com/detail/-/blogs/amid-urban-sprawl-and-overpopulation-indonesia-turns-to-model-mixed-use-complex-5" target="_blank">More: Amid urban sprawl, Indonesia turns to model mixed-use complexes</a> In contrast to sprawling development, Jiang points out, “vertical communities create synergy between different uses and foster dynamic neighbourhoods. By integrating business, leisure, retail, and residential spaces, the design of a vertical community is strategically organised to create a vibrant, permeable urban destination to live, work, and visit.”   Analysts at JLL real-estate services predict vertical living solutions will dominate the Asian market. “As cities become more developed, and densities become higher, it makes sense to build more mixed-use developments,” says Regina Lim, head of capital markets research, Southeast Asia.   “Mixed-use developments bring together complementary uses,” she continues. “Retail shops benefit from the natural catchment of offices or hotels or apartments while the residents and workers enjoy the convenience. As maintenance management schemes become more sophisticated, they allow effective property management of these integrated projects. Apartments with these amenities sell well.”  But not all trends in Asian mixed-use are vertical. Throughout the Philippines, developers continue to favour township-style projects, for which huge land footprints provide fertile ground to design integrated communities from the ground up.   Megaworld Corporation has long been at the forefront of building from scratch new towns whose components stretch from serviced condominiums and rows of townhouses to malls, leisure facilities, and shopping districts.   <img alt="A view of Le Quest, winner of Best Mixed Use Development at the PropertyGuru Asia Property Awards (Singapore) 2018" src="/documents/10204/0/Le-Quest-compressor+2.jpg/8c40fe6e-596e-48e9-b638-7300655f2415?t=1545889041719" /> This year alone, Megaworld has announced new residential and commercial developments for its townships in Manila, Pampanga, Pasig City, and Bacolod City, while also rolling out a “smart township” initiative to future-proof its existing townships.   Starting with Davao Park District, the “iTownship” programme will see the 11-hectare development fitted with fibre optic infrastructure, bike lanes and rental systems, LED-powered lighting and signage, solar-powered street lamps, and vertical open spaces and gardens.  While townships have traditionally been confined to once rural areas, UAA Kinming Group’s New Manila Bay – City of Pearl is being developed on a huge tract of reclaimed land along Manila’s shoreline. Projected to open in 2024, City of Pearl broke ground in August 2017 and, when completed, will take up 407 hectares of reclaimed land and connect directly to Roxas Boulevard, a major thoroughfare.   For comparison, Thailand’s under-construction One Bangkok mixed-use project—itself a huge project for a capital city centre—covers just 18 hectares. “There are many townships in Asia, but those townships are in the middle of nowhere,” says Nicholas Ho, deputy managing director of Ho & Partners Architects, the Hong Kong-based lead designer of the project. “This township is extremely prime in terms of its location—it’s right smack in the middle of town, with 360-degree views.”  Ho reveals that retail, in the form of a three-kilometre riverfront shopping strip, is not “just a mall” but engages with the central park and the riverside, “so that it becomes a thematic integrated entertainment complex.”  Similarly in Vietnam, Ho Chi Minh City’s Thu Thiem New Urban Area will cover a vast 657-hectare site across the Saigon River from the central District 1. Touted as the capital’s new financial zone, it will not only encompass office towers for some 217,000 employees, but also enough residential units for a population of 145,000.    It’s not only in urban areas, however, where ambitious mixed-use projects are breaking the mould. On the tree-lined shores of Phuket’s Kamala Beach, the USD67.5 million luxury MontAzure development comprises hotel-managed condos, a lifestyle mall, a 200-room InterContinental Hotel, and Cafe del Mar, which is already part of the development's unique beachfront attractions.   <div class="pull-quotes-container">We are spoiled by the compactness of urbanisation, a precursor of mixed-use design. Urbanisation has happened on a global scale and it’s all because we crave connectivity</div> “Developers are realising that if they build a core concept, it adds value to the project, rather than simply selling parcels of land,” says Martin Palleros, founder and director of Tierra Design and the architect behind The Residences at MontAzure. “It’s all about what you can offer the community, and not just in terms of the property components,” he adds.   Nicholas Ho believes that driving Asia’s demand for such integrated developments is an urge to feel connected. “In Asian society, people crave for connectivity a lot more than the rest of the world,” he explains. “We are spoiled by the compactness of urbanisation, a precursor of mixed-use design. Urbanisation has happened on a global scale and it’s all because we crave connectivity.”  Successful mixed-use schemes have the capacity to create diverse, vibrant neighbourhoods in which people can live, work, and socialize. They bring round-the-clock life to central business districts. They provide private land parcels with pedestrian-friendly solutions and interlink disparate downtown neighbourhoods.   Ho predicts this integrated, community-driven approach to development will gradually become the new normal. “The future of mixed-use is going to shift the existing paradigm,” he says. “We will gradually move from the two extremes of urbanisation, urban and suburban, towards one. The walls of living and work spaces are coming down.”  This article originally appeared in <a href="https://www.magzter.com/TH/PropertyGuru-International-(Thailand)-Co.,Ltd/Property-Report/Business/" target="_blank">Issue No. 151</a> of PropertyGuru Property Report Magazine

Better together: making the most of mixed-use developments

Thailand real estate: relentless, expensive, and highly desirable

<img alt="" src="/documents/10204/0/Thailand+lead+image+2.jpg/fa21d8ab-ab6b-428e-ba4e-9fb5614f7802?t=1506489408522" style="width: 1081px; height: 549px;" /> For Australians, the phrase ‘the lucky country’ has strong resonance. The nickname, coined by author Donald Horne in his novel of the same name, has been used to describe the Antipodean nation’s weather, lifestyle and is often invoked to describe its good fortune from gold rushes to economic booms. Despite its roots Down Under, the description could just as easily be applied to Thailand: a nation whose spectacular natural attributes, incredible cuisine and long-established cache as one of the world’s most appealing places to live has enabled its property market to ride out storms and setbacks that might have floored those in other countries. “Thailand’s infrastructure, accessibility, and general reputation for being a laid-back leisure destination are still vastly superior to other neighbouring countries,” says Andrew Gulbrandson, research head at JLL Thailand. “While certain destinations within Thailand may become less popular, it’s difficult to envision a scenario where Thailand’s desirability as a place to invest substantially decreases.” Indeed, the country’s reputation for being Teflon-coated when it comes to deflecting troublesome news, events and economic tidings is as resonant as ever. In August 2016, bombs exploded in the tourist hubs of Hua Hin and Phuket while last October saw the passing of King Bhumibol Adulyadej, the nation’s much revered monarch. This year has, by Thai standards at least, been relatively light on potentially seismic events. However, the military-run government, in power since a coup in 2014, preside over an economy that continues to be lacklustre. The economy will expand 3.3 percent a year on average from 2017 to 2019, according to the World Bank, the weakest among eight developing Southeast Asian nations. Given all this you could be forgiven for thinking that the country’s once-thriving real estate sector might be showing signs of lethargy, if not out and out fatigue. Not so, say analysts, experts and developers, pointing to booming demand for luxury property in the capital Bangkok and healthy interest from investors, both foreign and Thai, in popular secondary markets such as the paradise islands of Phuket and Koh Samui and the well-located beach resort of Hua Hin.    <a href="http://property-report.com/detail/-/blogs/what-you-missed-at-the-propertyguru-thailand-real-estate-summit-20-3" target="_blank">More: What you missed at the PropertyGuru Thailand Real Estate Summit 2017</a>   In Bangkok, growth in the condominium market remained strong last year. According to Knight Frank’s “Asia Pacific Residential Review”, published earlier this year, more than 52,000 new units were added in 2016 bringing the total to 435,805. But with demand at 315,393 units, the take-up rate recorded a three percentage-point drop to 72.4 percent. Contrastingly, take-up in the sub-prime and prime segments increased by more than four percentage points to 75.4 percent – indicative of the current rude health of the luxury residential market in the city. High-end condominiums are rising with the regularity of a ticking metronome. The striking MahaNakhon building – a mixed-use tower (Thailand’s tallest tower) that features leading international restaurants, hospitality and a luxury residential component with management by Ritz-Carlton – is the most noticeable manifestation of the ongoing penchant for new high-end real estate, while other new projects vie for the attention of super-rich investors. Prime central areas in the city are rising in price with properties selling for up to THB300,000 (USD8,421) per sq metre.  At super-luxe residential projects, such as the Ritz-Carlton Residences at MahaNakhon and 98 Wireless by respected Thai developer Sansiri, price tags are truly eye-watering. Units at the Ritz-Carlton Residences are priced from THB45 million to more than THB300 million while prices average about THB550,000 per square metre at 98 Wireless. Still, these asking prices pale in comparison with the city-record THB650,000 per square metre that was paid in March for the penthouse unit at Mandarin Oriental Bangkok Residences, winner of Best Condo Development at the Thailand Property Awards 2016. Such opulence may not come cheap but strong uptake from buyers proves that there’s a market for it.  “Freehold ownership of Thailand’s tallest tower is truly a unique selling point,” says Kipsan Beck, managing director of MahaNakhon. “Buyers have indicated that they appreciate the design and specifications, mixed-use lifestyle benefits of having everything at their doorstep and the wide range of facilities and quality standards throughout.”    <div class="pull-quotes-container">Prices for new luxury units have risen to the point where it does not make sense for renters</div>   Developers and analysts are also reporting high levels of interest in luxury real estate elsewhere in the city’s central areas, even in the light of rocketing purchase prices and low to non-existent yield potential.  “Investors eyeing the luxury condo market should not expect any rental yield from new projects,” says Gulbrandson. “Prices for new luxury units have risen to the point where it does not make sense for renters.” The absence of any significant buy-to-let benefits (at least at the highest end of the markets) could be looked upon as a disincentive to buyers. So too could the surge in land values. These factors, as well as an expected glut of supply in the condominium market, meanwhile, has prompted some – including, most recently, Supachai Panitchpakdi, a former director-general of the World Trade Organization – to speculate about a possible property bubble. Experts, however, point to a range of advantages which bolster Bangkok’s reputation as a safe and stable place to invest.  Notably, the city still offers decent value for money. According to globalpropertyguide.com, property prices in the world’s top real estate markets like the US, UK and other Asian hotspots like Singapore and Hong Kong are between two to six times more expensive than Thailand.   <img alt="Hua Hin's proximity to Bangkok makes it a seriously convenient place for investors" src="/documents/10204/0/Thailand+templs.jpg/97cdbb82-6021-4c9a-817a-70df5c118609?t=1506487485611" style="width: 740px; height: 416px;" />   Analysts also point to the absence of punitive stamp duties for foreign nationals such as those found in Singapore and Hong Kong and the liquidity of developers and the selectivity of banks in approving mortgages as positive indicators. And, of course, also appealing are the perks that come from living in a city with myriad lifestyle benefits and easy access to the rest of Thailand and the world.  “Any suggestion of a bubble falls somewhere on the spectrum between ill-informed and irresponsible,” says Gulbrandson. “Bubbles can be created by many conditions, but most notably loose financing and massive speculative development, neither of which are present in the Bangkok market.” While Bangkok is by far the liveliest market in the country, sector conditions elsewhere in the tropical nation are also looking more promising than they have done for a while.  The sector in Phuket is beginning to pick up momentum after a soft few years where various ructions including the collapse of the Russian rouble, the worldwide slump in oil prices and the fallout from the UK’s Brexit vote took their toll on investor confidence.  Agents, however, are reporting an uptick in interest – especially in the resale market. And while there’s scant scope for new projects on the built up prime strip of coastline on the west of Thailand’s biggest island, inland areas such as Pasak and Kathu and quieter coastal enclaves such as Rawai in the south of the island are developing fast. Observers note a strong Thai flavour to the resurgence of the Phuket market, with home-grown developers and investors taking up the slack as interest from international buyers dwindles for the moment. “The positive response from the local market has been pleasantly surprising,” says Setthapol Boottho, executive director of MontAzure, whose Twinpalms Residences and Estates at MontAzure near Kamala beach are among the most exclusive of the new developments on the island.    <div class="pull-quotes-container">Many more experienced Thai investors realise the value of having a balanced property portfolio so they are looking further afield for better returns and capital appreciation</div>   The THB2.2 billion project, which is part of the larger mixed-use MontAzure development, comprises and condo and villas on one of the final plots of land on the island with direct beachfront access. “Thai buyers are far more discerning now in terms of design, quality and yield,” he adds. “Many more experienced Thai investors realise the value of having a balanced property portfolio so they are looking further afield for better returns and capital appreciation.” The high-end segment on Thailand’s star island is also expected to be boosted by the recent extension to its international airport, which increased capacity from 6.5 million to 12.5 million passengers a year.   <a href="http://property-report.com/detail/-/blogs/in-thailand-empty-nesters-find-their-luxe-forever-ho-16" target="_blank">More: In fast-aging Thailand, empty nesters find their luxe forever homes</a>   “The airport facility itself will be a vast improvement on the customer experience which is important in the luxury segment,” Setthapol says. “It also means that more destinations are accessible which should broaden the market across all segments – high end and mass market. These markets co-exist in many celebrated destinations like Hawaii, and Bali, where there are a variety of locations with different segment appeal.” Over on the east coast of the country, in popular destinations like Koh Samui and Hua Hin, investment opportunities also abound. Although complaints of overdevelopment in certain areas of Samui, as well as an oversupply in poorly-constructed developments, are founded, agents are reporting generous yields of between 6 to 14 percent on luxury property. The emergence of Lamai, the island’s second-largest resort area, and the fact that there is still plentiful room for quality new projects are among other factors fuelling optimism. “If certain development plans around the island do end up being confirmed and put into place then huge changes could be seen in specific areas with many new investment opportunities,” says George Willoughby of Form Realty. Despite a slight slowdown over the past few quarters, the market in Hua Hin remains relatively stable.    <img alt="Phuket continues to lure tourists and investors alike due to its winning combination of big city amenities and stunning tropical shores" src="/documents/10204/0/Thailand+beachs.jpg/7a5ddf22-316f-4ed3-b896-b76bbb3f4cc4?t=1506487552596" style="width: 740px; height: 493px;" />   According to Knight Frank Thailand research, the total supply at Q1 2017 stands at 23,584 units, with no new projects being launched yet in 2017. Approximately 1,000 to 3,000 new units were launched over the past few years, but the research notes that future supply will grow at a slower rate, especially in the luxury segments as premium real estate in the coastal town becomes scarce.  The sector there is expected to expand, however, in the next three to four years thanks to the government’s plan to develop a high-speed rail connection from Bangkok to Hua Hin. Further encouragement to the real estate market nationwide came in March 2017 when Apisak Tantivorawong, minister of finance, said that the government was considering amending property legislation to allow investors to lease property for 50 years, with the option of renewing the contract for a further 49. Under present regulations, businesses are permitted to take out 30-year leases with the option of extending for another 30 years.  “That would be a real game-changer,” says Robert Krupica of leading Thai international law firm Hughes Krupica. “Foreign villa buyers would benefit immensely from the longer tenure and the longer lease terms will be very positive for mixed use and commercial developments where the asset can be amortised over a longer period.” To those unfamiliar with Thailand, its paradoxes may seem disquieting. However, with value for money, high quality developments continuing to enhance the sky-high appeal of its property market, it’s hardly surprising that the nation continues to ride out its storms.    <h4>Chiang Mai continues to struggle</h4> Thailand’s second-largest city has long been considered a poor relation to Bangkok and southern markets like Phuket when it comes to investment in real estate. And condo and housing supply in the northern capital remain weak despite new transport network development projects such as a second international airport and a 184-kilometre inter-city motorway between Chiang Mai and Chiang Rai. According to the Real Estate Information Centre (REIC), the monthly absorption rate of the low-rise housing supply in the city declined to an average of 3.6 percent in the third quarter of 2015, down from 5.3 percent. Samma Kitsin, director general of the REIC, says the ambitious transport plans will have minimal impact on the property market as the projects are unlikely to be completed in the near-distant future.   <h4>Phuket’s inland appeal</h4> Although its beachfront areas are undoubtedly Phuket’s hottest investment hubs, urban zones inland such as Phuket Town and Kathu District are increasingly on the radar for developers and investors. While beachfront property is undoubtedly attractive, it comes at a premium. Buyers can expect to shell out up to THB110,000 per sqm for some high-end condos on the island’s most prized stretches of shoreline. Prices per sqm are around half that inland, while improving road links to the airport and a host of new retail options further enhance the appeal of areas such as Kathu.  “We are seeing a lot of activity in Kathu District presently and that’s liable to be an ongoing trend due to the opening of new retail options such as Blue Pearl and the King Power duty free complex,” says Robert Krupica of Hughes Krupica.   <h2>What to buy</h2> <h3>Bangkok </h3> <h4>The Residences at Mandarin Oriental, Bangkok</h4> <h4><img alt="" src="/documents/10204/0/THE+RESIDENCES+AT+MANDARIN+ORIENTAL.jpg/8bfea135-0b05-4a4c-a413-11ed8c6077a7?t=1506658041113" style="width: 740px; height: 481px;" /> </h4>   Developer: MQDC Magnolia Quality Development Corporation Size: 128-165 sqm Number of units: 146 Price: USD10,026-15,750 per sqm Location: Charoenakorn Road Completion date: 2018 X-factor: Direct connection to BTS Gold line   <h4>749 Residence</h4> <h4><img alt="" src="/documents/10204/0/749+%281%29.jpg/1005fbee-4f9c-4d54-b64a-9df6088bffb3?t=1506658078141" style="width: 740px; height: 639px;" /> </h4>   Developer: Pannaphat Development Co Ltd Size (avg): 155.76 sqm Number of units: 7 Price (avg): USD1.9 million  Location: Sukhumvit 49 Completion date: 2017 X-factor: Private parking spaces for 4-5 cars   <h3>Phuket</h3> <h4>Twinpalms Residences MontAzure</h4> <img alt="" src="/documents/10204/0/TWINPALMS+RESIDENCES+MONTAZURE+%282%29.jpg/e563133c-0dd2-4482-9166-8d82517087b1?t=1506658151562" style="width: 740px; height: 444px;" />   Developer: MontAzure Size: 70-400 sqm Number of units: 75 Price: USD380,000-2.6 million Location: Kamala Beach, Phuket Completion date: 2018 X-factor: Beachfront landscaped gardens   <h3>Samui</h3> <h4>uniQue</h4> <img alt="" src="/documents/10204/0/UNIQUE+%281%29.jpg/4d26bfc7-deea-49f9-b273-f4943ac68599?t=1506658215152" style="width: 740px; height: 493px;" />   Developer: Q71 Development Co Ltd Size (avg): 100 sqm Number of units: 96 Price (avg): USD344,000  Location: Bho Phut, Koh Samui Completion date: 2017 X-factor: proximity to island pier and Fishermen’s Village   <h3>Hua Hin</h3> <h4>MahaSamutr </h4> <img alt="" src="/documents/10204/0/MAHASAMUTR+%282%29.jpg/cfb31423-ea2a-4439-840f-d8d3d38928d4?t=1506658249696" style="width: 740px; height: 503px;" />   Developer: PACE Development Size: 447-587 sqm  Number of units: 80 Price: Starts at USD1.4 million Location: Soi 112 Huana Tuptai Road, Hua HIn Completion date: 2017 (Phase 1) X-factor: Asia’s largest lagoon   <h3>Chiang Mai</h3> <h4>The Sanctum</h4> <img alt="" src="/documents/10204/0/THE+SANCTUM+%281%29.jpg/5c233828-c05c-427c-80b6-94dfd1511c15?t=1506658302268" style="width: 740px; height: 423px;" />   Developer: Sanctum Co Ltd Size (avg): 730 sqm Number of units: 6 Price: USD1.45-1.82 million Location: Hang Dong, Chiang Mai Completion date: 2017 X-factor: Sophisticated security features including biometric door locks and a nuclear fallout shelter   This article originally appeared in <a href="https://www.magzter.com/TH/PropertyGuru-International-(Thailand)-Co.,Ltd/Property-Report/Business/" target="_blank">Issue No. 143 of PropertyGuru Property Report Magazine</a>

For Australians, the phrase ‘the lucky country’ has strong resonance. The nickname, coined by author Donald Horne in his novel of the same name, has been used to describe the Antipodean nation’s weather, lifestyle and is often invoked to describe its good fortune from gold rushes to economic booms.

Despite its roots Down Under, the description could just as easily be applied to Thailand: a nation whose spectacular natural attributes, incredible cuisine and long-established cache as one of the world’s most appealing places to live has enabled its property market to ride out storms and setbacks that might have floored those in other countries.

“Thailand’s infrastructure, accessibility, and general reputation for being a laid-back leisure destination are still vastly superior to other neighbouring countries,” says Andrew Gulbrandson, research head at JLL Thailand. “While certain destinations within Thailand may become less popular, it’s difficult to envision a scenario where Thailand’s desirability as a place to invest substantially decreases.”

Indeed, the country’s reputation for being Teflon-coated when it comes to deflecting troublesome news, events and economic tidings is as resonant as ever. In August 2016, bombs exploded in the tourist hubs of Hua Hin and Phuket while last October saw the passing of King Bhumibol Adulyadej, the nation’s much revered monarch.

This year has, by Thai standards at least, been relatively light on potentially seismic events. However, the military-run government, in power since a coup in 2014, preside over an economy that continues to be lacklustre. The economy will expand 3.3 percent a year on average from 2017 to 2019, according to the World Bank, the weakest among eight developing Southeast Asian nations.

Given all this you could be forgiven for thinking that the country’s once-thriving real estate sector might be showing signs of lethargy, if not out and out fatigue. Not so, say analysts, experts and developers, pointing to booming demand for luxury property in the capital Bangkok and healthy interest from investors, both foreign and Thai, in popular secondary markets such as the paradise islands of Phuket and Koh Samui and the well-located beach resort of Hua Hin.

More: What you missed at the PropertyGuru Thailand Real Estate Summit 2017

In Bangkok, growth in the condominium market remained strong last year. According to Knight Frank’s “Asia Pacific Residential Review”, published earlier this year, more than 52,000 new units were added in 2016 bringing the total to 435,805. But with demand at 315,393 units, the take-up rate recorded a three percentage-point drop to 72.4 percent.

Contrastingly, take-up in the sub-prime and prime segments increased by more than four percentage points to 75.4 percent – indicative of the current rude health of the luxury residential market in the city.

High-end condominiums are rising with the regularity of a ticking metronome. The striking MahaNakhon building – a mixed-use tower (Thailand’s tallest tower) that features leading international restaurants, hospitality and a luxury residential component with management by Ritz-Carlton – is the most noticeable manifestation of the ongoing penchant for new high-end real estate, while other new projects vie for the attention of super-rich investors. Prime central areas in the city are rising in price with properties selling for up to THB300,000 (USD8,421) per sq metre.

At super-luxe residential projects, such as the Ritz-Carlton Residences at MahaNakhon and 98 Wireless by respected Thai developer Sansiri, price tags are truly eye-watering. Units at the Ritz-Carlton Residences are priced from THB45 million to more than THB300 million while prices average about THB550,000 per square metre at 98 Wireless. Still, these asking prices pale in comparison with the city-record THB650,000 per square metre that was paid in March for the penthouse unit at Mandarin Oriental Bangkok Residences, winner of Best Condo Development at the Thailand Property Awards 2016.

Such opulence may not come cheap but strong uptake from buyers proves that there’s a market for it.

“Freehold ownership of Thailand’s tallest tower is truly a unique selling point,” says Kipsan Beck, managing director of MahaNakhon. “Buyers have indicated that they appreciate the design and specifications, mixed-use lifestyle benefits of having everything at their doorstep and the wide range of facilities and quality standards throughout.”

Prices for new luxury units have risen to the point where it does not make sense for renters

Developers and analysts are also reporting high levels of interest in luxury real estate elsewhere in the city’s central areas, even in the light of rocketing purchase prices and low to non-existent yield potential.

“Investors eyeing the luxury condo market should not expect any rental yield from new projects,” says Gulbrandson. “Prices for new luxury units have risen to the point where it does not make sense for renters.”

The absence of any significant buy-to-let benefits (at least at the highest end of the markets) could be looked upon as a disincentive to buyers. So too could the surge in land values. These factors, as well as an expected glut of supply in the condominium market, meanwhile, has prompted some – including, most recently, Supachai Panitchpakdi, a former director-general of the World Trade Organization – to speculate about a possible property bubble.

Experts, however, point to a range of advantages which bolster Bangkok’s reputation as a safe and stable place to invest.

Notably, the city still offers decent value for money. According to globalpropertyguide.com, property prices in the world’s top real estate markets like the US, UK and other Asian hotspots like Singapore and Hong Kong are between two to six times more expensive than Thailand.

Hua Hin's proximity to Bangkok makes it a seriously convenient place for investors

Analysts also point to the absence of punitive stamp duties for foreign nationals such as those found in Singapore and Hong Kong and the liquidity of developers and the selectivity of banks in approving mortgages as positive indicators. And, of course, also appealing are the perks that come from living in a city with myriad lifestyle benefits and easy access to the rest of Thailand and the world.

“Any suggestion of a bubble falls somewhere on the spectrum between ill-informed and irresponsible,” says Gulbrandson. “Bubbles can be created by many conditions, but most notably loose financing and massive speculative development, neither of which are present in the Bangkok market.”

While Bangkok is by far the liveliest market in the country, sector conditions elsewhere in the tropical nation are also looking more promising than they have done for a while.

The sector in Phuket is beginning to pick up momentum after a soft few years where various ructions including the collapse of the Russian rouble, the worldwide slump in oil prices and the fallout from the UK’s Brexit vote took their toll on investor confidence.

Agents, however, are reporting an uptick in interest – especially in the resale market. And while there’s scant scope for new projects on the built up prime strip of coastline on the west of Thailand’s biggest island, inland areas such as Pasak and Kathu and quieter coastal enclaves such as Rawai in the south of the island are developing fast.

Observers note a strong Thai flavour to the resurgence of the Phuket market, with home-grown developers and investors taking up the slack as interest from international buyers dwindles for the moment.

“The positive response from the local market has been pleasantly surprising,” says Setthapol Boottho, executive director of MontAzure, whose Twinpalms Residences and Estates at MontAzure near Kamala beach are among the most exclusive of the new developments on the island.

Many more experienced Thai investors realise the value of having a balanced property portfolio so they are looking further afield for better returns and capital appreciation

The THB2.2 billion project, which is part of the larger mixed-use MontAzure development, comprises and condo and villas on one of the final plots of land on the island with direct beachfront access.

“Thai buyers are far more discerning now in terms of design, quality and yield,” he adds. “Many more experienced Thai investors realise the value of having a balanced property portfolio so they are looking further afield for better returns and capital appreciation.”

The high-end segment on Thailand’s star island is also expected to be boosted by the recent extension to its international airport, which increased capacity from 6.5 million to 12.5 million passengers a year.

More: In fast-aging Thailand, empty nesters find their luxe forever homes

“The airport facility itself will be a vast improvement on the customer experience which is important in the luxury segment,” Setthapol says. “It also means that more destinations are accessible which should broaden the market across all segments – high end and mass market. These markets co-exist in many celebrated destinations like Hawaii, and Bali, where there are a variety of locations with different segment appeal.”

Over on the east coast of the country, in popular destinations like Koh Samui and Hua Hin, investment opportunities also abound.

Although complaints of overdevelopment in certain areas of Samui, as well as an oversupply in poorly-constructed developments, are founded, agents are reporting generous yields of between 6 to 14 percent on luxury property. The emergence of Lamai, the island’s second-largest resort area, and the fact that there is still plentiful room for quality new projects are among other factors fuelling optimism.

“If certain development plans around the island do end up being confirmed and put into place then huge changes could be seen in specific areas with many new investment opportunities,” says George Willoughby of Form Realty.

Despite a slight slowdown over the past few quarters, the market in Hua Hin remains relatively stable.

Phuket continues to lure tourists and investors alike due to its winning combination of big city amenities and stunning tropical shores

According to Knight Frank Thailand research, the total supply at Q1 2017 stands at 23,584 units, with no new projects being launched yet in 2017. Approximately 1,000 to 3,000 new units were launched over the past few years, but the research notes that future supply will grow at a slower rate, especially in the luxury segments as premium real estate in the coastal town becomes scarce.

The sector there is expected to expand, however, in the next three to four years thanks to the government’s plan to develop a high-speed rail connection from Bangkok to Hua Hin.

Further encouragement to the real estate market nationwide came in March 2017 when Apisak Tantivorawong, minister of finance, said that the government was considering amending property legislation to allow investors to lease property for 50 years, with the option of renewing the contract for a further 49. Under present regulations, businesses are permitted to take out 30-year leases with the option of extending for another 30 years.

“That would be a real game-changer,” says Robert Krupica of leading Thai international law firm Hughes Krupica. “Foreign villa buyers would benefit immensely from the longer tenure and the longer lease terms will be very positive for mixed use and commercial developments where the asset can be amortised over a longer period.”

To those unfamiliar with Thailand, its paradoxes may seem disquieting. However, with value for money, high quality developments continuing to enhance the sky-high appeal of its property market, it’s hardly surprising that the nation continues to ride out its storms.

Chiang Mai continues to struggle

Thailand’s second-largest city has long been considered a poor relation to Bangkok and southern markets like Phuket when it comes to investment in real estate. And condo and housing supply in the northern capital remain weak despite new transport network development projects such as a second international airport and a 184-kilometre inter-city motorway between Chiang Mai and Chiang Rai. According to the Real Estate Information Centre (REIC), the monthly absorption rate of the low-rise housing supply in the city declined to an average of 3.6 percent in the third quarter of 2015, down from 5.3 percent. Samma Kitsin, director general of the REIC, says the ambitious transport plans will have minimal impact on the property market as the projects are unlikely to be completed in the near-distant future.

Phuket’s inland appeal

Although its beachfront areas are undoubtedly Phuket’s hottest investment hubs, urban zones inland such as Phuket Town and Kathu District are increasingly on the radar for developers and investors. While beachfront property is undoubtedly attractive, it comes at a premium. Buyers can expect to shell out up to THB110,000 per sqm for some high-end condos on the island’s most prized stretches of shoreline. Prices per sqm are around half that inland, while improving road links to the airport and a host of new retail options further enhance the appeal of areas such as Kathu. “We are seeing a lot of activity in Kathu District presently and that’s liable to be an ongoing trend due to the opening of new retail options such as Blue Pearl and the King Power duty free complex,” says Robert Krupica of Hughes Krupica.

What to buy

Bangkok

The Residences at Mandarin Oriental, Bangkok

Developer: MQDC Magnolia Quality Development Corporation
Size: 128-165 sqm
Number of units: 146
Price: USD10,026-15,750 per sqm
Location: Charoenakorn Road
Completion date: 2018
X-factor: Direct connection to BTS Gold line

749 Residence

Developer: Pannaphat Development Co Ltd
Size (avg): 155.76 sqm
Number of units: 7
Price (avg): USD1.9 million
Location: Sukhumvit 49
Completion date: 2017
X-factor: Private parking spaces for 4-5 cars

Phuket

Twinpalms Residences MontAzure

Developer: MontAzure
Size: 70-400 sqm
Number of units: 75
Price: USD380,000-2.6 million
Location: Kamala Beach, Phuket
Completion date: 2018
X-factor: Beachfront landscaped gardens

Samui

uniQue

Developer: Q71 Development Co Ltd
Size (avg): 100 sqm
Number of units: 96
Price (avg): USD344,000
Location: Bho Phut, Koh Samui
Completion date: 2017
X-factor: proximity to island pier and Fishermen’s Village

Hua Hin

MahaSamutr

Developer: PACE Development
Size: 447-587 sqm
Number of units: 80
Price: Starts at USD1.4 million
Location: Soi 112 Huana Tuptai Road, Hua HIn
Completion date: 2017 (Phase 1)
X-factor: Asia’s largest lagoon

Chiang Mai

The Sanctum

Developer: Sanctum Co Ltd
Size (avg): 730 sqm
Number of units: 6
Price: USD1.45-1.82 million
Location: Hang Dong, Chiang Mai
Completion date: 2017
X-factor: Sophisticated security features including biometric door locks and a nuclear fallout shelter

This article originally appeared in Issue No. 143 of PropertyGuru Property Report Magazine

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