RESEARCH & FORECAST REPORT

Bangkok | Condominium H2 2013

BANGKOK CONDOMINIUM MARKET H2 2013

Executive Summary
New launches in Q4 2013 were similar to the previous quarter, but the total of newly launched units in 2013 was approximately 51,150, or around 8% higher than in 2012. Approximately 34,550 new condominium units were completed and registered at the Department of Land in 2013; many condominium projects have delayed their completion date to 2014, due to labour shortage problems. The average take-up rate for condominium projects in Bangkok for Q4 2013 was approximately 58%, similar to previous quarters, but lower than the first half of 2013. The average-selling price for newly launched units in 2013 increased by around 20 - 40% over the average price of all condominium units that were launched in 2012, due to a range of factors affecting construction costs. However, because of the high amount of new supply, certain projects will do better than others. The well-known and reputable developers, especially listed developers, still achieved high take-up rates at their new projects.

MARKET INDICATORS
Q3 2013 - Q4 2013 SUPPLY NEW LAUNCHES PRICES PRICES

The areas around some BTS stations that are already operating along the new extension line became the hot locations for condominium development. Condominium prices are also staying higher than in the past one to two years. Political issues in Q4 2013 were a major concern for listed and non-listed developers in Thailand. Most developers postponed the launch of their new projects in December and some revised their plans for new projects that they expected to launch in 2014.

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Newly launched Newly launched condominium units from Q1 2011 - Q4 2013 by quarter

Source: Colliers International Thailand Research

New launches for Q4 2013 were still similar to the previous quarter with approximately 11,280 units launched onto the market. Approximately 98% of condominium units launched in the last quarter of 2013 were launched in October and November and some

condominium projects were postponed to 2014. Three new condominium projects were launched with a total of more than 1,000 units.

Newly launched condominium units in Q4 2013 by location

Source: Colliers International Thailand Research

Approximately 54% of new condominium units launched in Q4 2013 in Bangkok were located in the Suburban Bangkok area. Within the Urban Bangkok area, the City area showed the highest numbers with approximately 4,100 units or 36% of the total, followed by the Southern

Fringe area with around 8%. Most condominium projects launched in the Suburban Bangkok area are far from existing or under-construction extension sky train and subway lines.

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Supply Historical supply, H2 2013

Source: Department of Land, Colliers International Thailand Research

Around 17,510 new condominium units were completed and registered at the Department of Land in the last quarter of 2013 and approximately 34,550 units were completed and registered in 2013. The total existing supply for the whole of Bangkok is approximately 395,660 units. More than 75,000 units are scheduled to be completed in 2014, the highest

on record for the Thailand condominium market. This was because approximately 48,000 units were postponed from 2013, because of a lack of construction workers.

Historical supply by location, H2 2013

Source: Department of Land and Colliers International Thailand Research

Approximately 60%, or nearly 237,890 condominium units, are located in the Suburban Bangkok area, while more than 157,100 units are located in the area along the existing mass transit lines (BTS and MRT)

in the Urban Bangkok area. Within the Urban Bangkok area, the Northern Fringe contains the most units, followed by the City area with approximately 13 and 9% of the total supply, respectively.

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Future Supply Cumulative future supply scheduled to be completed from 2014 to 2017 by location in Urban Bangkok, as of H2 2013

Source: Colliers International Thailand Research Notes: 1. Supply does not include units in the Suburban Bangkok area. 2. Based on developers estimates of completion dates

Approximately 35,620 units are scheduled to be completed in the Urban Bangkok area in 2014. The Northern Fringe area continues as a main player in Urban Bangkok with approximately 14,280 units planned for completion in 2014. This is because many condominium projects were launched in this area during the past few years,

especially along Ratchadapisek Road and on the sub-roads off Ratchadapisek Road. Around 42,160 units are still expected to be completed in the Suburban Bangkok area in 2014. Many condominium projects postponed their completion date to 2014, due to a labour shortage.

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Demand Average take-up rate of newly launched units in Q4 2013 by location

Source: Colliers International Thailand Research

The average take-up rate for condominium projects in Bangkok for Q4 2013 was approximately 72%, the highest in the past few quarters. This was due to some condominium projects selling out within a few days of the official launch, especially condominium projects by listed

developers and those close to mass transit systems. The take-up rate in the Northen Fringe area is the highest, followed by the Southern Fringe Area.

Launches with high take-up rates in Q4 2013

Ananda Development Plc. launched two new projects in the last quarter of 2013 and achieved a high take-up rate after the official launches in October. Ideo Q Chula Samyan and Ideo Q Ratchathewi,

are first two new condominium projects that are joint ventures of Ananda Development Plc. and Mitsui Fudosan, a subsidiary of Japans Mitsui Group.

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Sukhumvit 24 Road became the hot location again after Lumpini Development Plc. launched their first luxury condominium project The Lumpini 24. This project is comprised of 1 to 3 bedroom units with starting prices of around THB170,000 psm. The other luxury

project on Sukhumvit 24 Road is Park 24 by Pround Real Estate Co.Ltd. They launched their first phase with approximately 837 of more than 2,000 units and also received a good welcome from buyers.

The Diplomat Sathorn by KPN Group Co.Ltd on Sathorn Road close to the BTS Surasak station with 192 units of one to three bedrooms. The

average price of this project is approximately THB200,000 psm or starting from around THB8 million per unit.

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Price Average selling prices of newly launched projects by location, Q4 2013

Source: Colliers International Thailand Research

The average selling price of condominium units launched in each quarter of2013 steadily increased from 2012. The average prices of new condominium units that were launched in the last quarter of 2013 are higher than the first quarter by around 40%. This is because many

luxury condominium projects with an average price higher than THB160,000 psm were launched in 2013, especially in the City area, while the average in the Suburban Bangkok area also continued to increase.

New condominium units launched between 2012 and 2013 by quarter and average selling price, Q4 2013

Source: Colliers International Thailand Research

Most of the condominium launches in the last quarter of 2013 yielded a selling price in the range of THB40,001 - 60,000 psm, with most projects targeting the mid- to low-income bracket. The most noticeable

are condominium units launched with an average price over THB140,000 psm in Q4 2013, which is significantly higher than in previous quarters.

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Comparison between average price of condominium units launched in 2012 and 2013 by average selling price

Source: Colliers International Thailand Research

Low and middle income buyers are still the main target group of all developers, so the average price in the range of THB40,001 -60,000 psm was still highest in 2013. In the other direction, average prices

over THB140,001 psm dramatically increased in 2013, because many luxury condominium projects were launched in the City area, especially in the second half of 2013.

Mass Transit Effect Average selling prices of newly launched projects by proximity to existing mass transit stations, Q4 2013

Source: Colliers International Thailand Research

The average price of condominium projects launched in Q4 2013 was around 16% higher than in the previous quarter, and the average price in all locations was higher than in the prior quarter. The average selling prices of newly launched projects in the area from 501 -1,000

m from BTS / MRT stations are highest, at approximately THB161,000 psm, because some luxury condominium projects were launched in this area, while more than 1 km is still too far to attract development of luxury condominiums.

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Take-up rate of newly-launched projects by proximity to existing mass transit stations, Q4 2013

Source: Colliers International Thailand Research

The take-up rate of projects that are located in the area from 0 - 500 m from BTS / MRT stations was the highest at around 84% at condominium projects by well-known developers. The condominium projects that are located in the areas 501 - 1,000 m from BTS / MRT stations are priced higher than in the previous quarter, because some new luxury projects launched in the third quarter have high take-up

rates. The average take-up rate of condominium projects that are more than 1,000 m from BTS / MRT stations was the lowest at around 44%. This is because the majority of the middle- to low-income bracket are most affected by household debt and are not confident in their job situations after the Thailand economy was affected by political instability in the last quarter.

Financing Housing loans for personal consumption extended by financial institutions

Source: Bank of Thailand and Colliers International Thailand Research Note: Excludes negligible amounts of financing from other sources. Percentage change is comparable quarter-on-quarter.

The growth rate of housing loans continued to increase from Q2 2013; the main reason is that many condominium projects are completed and ready for transfer in 2013, although many buyers cannot transfer their units, due to all commercial banks are stricter to considering to

approve home loan. Rising Thai household debt and first car policy are affecting some Thai payment situations, especially in the low to middle income bracket.

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Other factors New condominiums launched in each quarter from 2009 to2013

Source: Colliers International Thailand Research

Many crises, especially political issues in 2009 and 2010, and the floods in 2011, affected the Bangkok condominium market. Newly launched units in that quarter were affected by the political upheaval and floods, and were significantly lower in number compared to other quarters. The average take-up rate of new condominium units that were launched also decreased, especially in the two quarters that were affected by political issues in 2009 and 2010. But, the average

take-up rate still rose higher in the fourth quarter of 2011, although some parts of Bangkok were affected by the flood. Although political and natural disasters have directly affected the Bangkok condominium market, it will recover in the quarters afterwards. However, the other major concern for all developers in 2013 and 2014 is household debt and stricter loan approvals at commercial banks, as this directly affects buyers.

New condominium units launched along the Blue line (Bangsue Thapra and Hua Lumpong Thapra) by year

Source: Colliers International Research

In the last quarter of 2006, the government announced official plans for mass transit extension lines, starting with the construction of the Purple and Blue Lines in 2009 and 2011, respectively. The Blue Line will have two extension lines, the first starting from Bang Sue station and the second starting from Hua Lamphong station. Thapra station will be the terminus, and then only one line will continue on to Bangkae along Phetkasem Road. After the official announcement, the condominium market along the Blue Line changed significantly, and developers started launching

condominium projects along the lines. There was an average of around 2,790 units launched per year from 2006 to 2013, compared to only approximately 200 units per year from 2001 to 2005. Many condominium developers launched their new projects in the area along the Blue Line during the past two to three years, while some other developers are still planning to launch new projects in the future. The average price also dramatically increased from approximately THB53,000 psm in 2011 to nearly THB65,000 psm in 2013, approximately 23% higher.

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Sammary 2013 and Forecast 2014

There were approximately 51,150 more new condominium units launched in 2013 than in 2012 and 2011. Listed developers are still the main players in the market, and they are covering all market segments from low-end to ultra-luxury, in Bangkok, all tourist destinations and other main provinces. Despite warnings from some government agencies that there is a risk of oversupply, developers continue to have confidence in the market and are expected to launch new projects throughout 2014. Political issues in Q4 2013 and into 2014 were the major concern for listed and non-listed developers in Thailand. Most developers postponed the launch of their new projects from December until 2014 and some revised their plans for new projects that they expected to launch in 2014. The average selling price of new condominium units launched in 2013 increased from the last quarter of 2012 by around 20 - 40%. The main reasons are the increased cost of construction materials, the labour shortage, rising land prices and some luxury condominium projects launched with a significantly high price, all of which affected the average market price in 2013. The areas around some BTS stations that are already operating along the new extension line, such as around Wutthakat and Talat Phlu stations, became the hot locations for condominium development, due to the increase in condominium prices in the area and lower land prices compared to the City area. Many developers are scheduled to launch new condominium projects around those two stations, especially Talat Phlu.

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APPENDIX

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