245 replies to this topic
Posted 2006-02-19 15:06:26
Sansiri & its groups of companies including Natural Park have a bad reputation at building maintenance. Take a look at Mercury Tower which is their own building and now it is in such a sad condition. The Mercury Tower was then one of the most expensive building ever constructed in Thailand on a prime location at the corner of Langsuan and Ploenchit. It is renamed Platinum though now in their website: http://www.naturalpa...lio_office.html
So if they dont even maintained their own office building well; it's difficult how they would even maintain others' buildings well.
On the other hand Grande Asset has renovated its old Grand Pacific hotel which was built much earlier than Mercury Tower and now this hotel was restored to its grandeur to become Grande Westin Sukhumvit.
steveromagnino, just curious which property company, are you involved in? You mentioned that your company is one of the best properties firm in Thailand on a number posts.
 steveromagnino, on 2006-02-14 19:20:13, said:
backflip, on 2006-02-14 19:10:58, said:
"sansiri uses internal architect and they copy the same design for many of their other developments. have u seen that many of sansiri condos are indistinguishable one to the others"
So true. They've been building these 8-story developments as fill-ins. They have as much attraction as a motel. Too, the construction is very poor. Starting with walls with cracks that extend from one corner to another, and ending with a corrugated metal roof, these are the slums of the next decade.
No. They are building 8 storeys due to zoning. Same as us.
They have a reputation of looking after their buildings pretty well; please let me know the ones that are cracking; that I HAVE to see for myself to believe - I would be most curious if it is true.
Given the prices, there is no way these will be slums; also Sansiri have already lasted through the crash anyway; and you don't see any of their previous projects becoming slums; actually they hold their resale values really well.
And what project/developer do you recommend?
Posted 2006-02-19 15:33:57
steveromagnino, on 2006-02-09 17:23:50, said: Sansiri have a very solid reputation among Thais; how have you found their service Sfokevin?
Actually N-Park (Sansiri's parent company) is in financial difficulty; just last year several banks classified loans to N-Park and its group companies as NPL. N-Park was in financial difficulty even during condo sales boom of 2005 
Here is excerpt from Feb 12, 2005 article on Bangkok Post
"Cash strapped Natural Park in talks with new investors"
The ailing property developer Natural Park Plc is negotiating with a handful of new Thai and foreign investor groups to become strategic partners to help ease the company's financial troubles.
N-Park's troubles developed last year after the company was unable to issue new debentures in Hong Kong, leading to a default on 1.7 billion baht worth of loans owed to Krung Thai Bank (KTB).
And from Business Days newspaper
NATURAL Park Plc (N-Park) said it has to postpone the repayment date of a 1.698 billion baht debt it owes to Krung Thai Bank Plc (KTB) by 180 days from the originally set November 24 as it could not issue convertible debentures to raise fresh capital for the debt repayment as planned.
In its report submitted to the Stock Exchange of Thailand (SET), N-Park pointed out that the failure in its debentures issuance scheme was caused by the current economic situation and news reports on N-Park, which have resulted in serious impacts on the company’s share price.
“Our management is now trying to explain the real situation to KTB. We want to ask for permission from the creditor to allow us to postpone the debt repayment date,” N-Park said in its statement.
According to the company’s statement, N-Park had earlier spent 200 million baht for repaying part of the debt it owes to KTB and the outstanding debt with the bank now stands at 1.698 billion baht.
An informed source said that N-Park’s assets put as collateral for KTB’s loans are ordinary shares in Sansiri Plc (SIRI), Pacific Assets Plc (PA), Syntech Construction Plc (Syntech) and Finansa Plc (FNS).
The source added that other collateral includes investment units of BoA Apartment One property fund and land plots in Bang Krachao sub-district, the total value of which, as of November 11, 2004, was estimated at 2.735 billion baht, or about 161 percent of the outstanding debt principal.
N-Park shares yesterday went down by 0.04 baht to close at 0.90 baht apiece
Edited by susah_sih, 2006-02-19 15:56:11.
Posted 2006-02-20 18:22:57
susah_sih, on 2006-02-19 15:06:26, said: steveromagnino, just curious which property company, are you involved in? You mentioned that your company is one of the best properties firm in Thailand on a number posts.
And what project/developer do you recommend?
I have not to my recollection ever made such a comment. Please cut and paste where I made this. I am however yes, working in this industry, and my comments are made merely as a participant in this market, and are therefore not representative of the company i work for, and I make no mention of my that company here.
If you mean the comment....
'Then you have several good developers (including us I suppose) who for the most part run on time, deliver on spec, and mostly run a tight ship. Sansiri, Noble, LPN, Asia Properties all have as good a reputation as the same sorts of companies where I used to live in NZ (where it is almost always the case that projects are finished behind time and sometimes under spec.'
- hardly the same as one of the best..... just a statement of opinion and I would stand by it. Good is hardly 'the best'. And this is ONE comment!!! where are 'number of posts?'
Your comment of Natural park being in difficulty is a little disengenous, given that while NP may hold just under 25% of Sansiri, a rating company like TRIS has no problem rating them at BBB stable; and the management involvement of NP is fairly uncertain anyway. There are plenty of parent companies who end up selling companies or parts belonging to them due to difficulty, I am sure Sansiri has the mgt expertise to run themselves without the NP clowns. Anyway, the shares they own in Sansiri were offered as collateral in the loans, and so what for Sansiri if they end up with another anchor shareholder....
When this project reaches 80% sales, have most of the building complete and I can walk through it with my friends, then we can appraise it as a brilliant building or not as the case may be and consider buying.
I am not imaginative as all that to know how it might turn out, and whether it will be on time, so until then I'll stick to developers with many developments to their name, because at least there is output to look at.
And no... I have nothing to do with Sansiri or any of the other companies named above, I would not be that unprofessional to push something I do myself  
backflip, on 2006-02-18 07:00:56, said: steve,
You commented to my posting about Sansiri buidlins condos as "fill-ins" and you replied with: "No. They are building 8 storeys due to zoning. Same as us."
I was using the word "fill-in" as a description referring to constructing buildings in a mature Bangkok neighborhood, on a small piece of land, and not the height. I understand that the height limit is 8-stories, but not your comment "same as us".
Who cares if Thais like the look and feel of a motel? I don't.
By this I mean that the company I have been working for ALSO builds 8 storey buildings due to the same zoning issue for Sansiri. Not whether they look like motels or not :-) That's up to the tastes of the buyers.
For a property developer, I would have thought that relying on foreign buyers alone would cut the potential market of the market significantly. There are some developments that look like motels and some that don't; however I think you'll see the Thai developers who are astute coming up with better designs in future, and my guess is that Sansiri will be doing a new project VERY soon using external architects to get away from any possible feeling of being 'motel' like. With a solid reputation that stretches back years Thai people like them. The sharemarket likes them. Foreign investors like them. My friends who have bought many units in their developments like them. They are holding too much stock, and they know what they did up to now needs tweaking with a tougher market, so I expect you'll see more developments from them in the nicer design category in future.
And they will get both Thais and foreigners buying their units. Seems fair enough to me.
If we want to know what sort of company this Grande Asset company is, let's review how each of their 124 Comm press releases starts.... 'Grande Asset Development Plc., Thailand?s leading property and hotel developer, announces its busin....' leading property and hotel developer???! really?? So how many projects do they have on the go?
'Grand Asset Development Plc. is Thailand?s leading property and hotel developer with 8 projects as follows: Westin Grande Sukumvit Hotel, Crowne Plaza Hotel, The Regent Bangkok Hotel, Sheraton Hua Hin Resort, Four Points Sheraton Hotel, Hua Hin Blue Lagoon resort condominiums and Island Villas, The Regent Residences and The Trendy.'
That's not a huge number of projects and a fair few of these ones are on paper, and not complete.
Hmmm....maybe it isn't about completed project, so maybe revenue will tell us a better story... a year for year comparison of revenue... Grande Asset Dev = 893million baht in revenue 2004... Sansiri same year 6,645million baht. LPN 2,478MB, Land and House 21,289MB... and if we are talking quality..Trendy?!! OK, the other ones sure, Westin is only 3.5-4 star, but the rest are full 5 star.... however this is nowhere near the volume of Sansiri or Noble or other developers.
THis is a developer with a lot of marketing, and a great project on paper. Let's hope that they can turn it into a reality. But it looks to me like there is something going on, because the project is well behind the promises made to some people on this board who have committed to buy units there.
There are plenty of other developments in much worse state than this one around town.
Edited by steveromagnino, 2006-02-20 18:40:12.
Posted 2006-02-20 20:11:48
steveromagnino, on 2006-02-20 18:22:57, said: If we want to know what sort of company this Grande Asset company is, let's review how each of their 124 Comm press releases starts.... 'Grande Asset Development Plc., Thailand?s leading property and hotel developer, announces its busin....' leading property and hotel developer???! really?? So how many projects do they have on the go?
'Grand Asset Development Plc. is Thailand?s leading property and hotel developer with 8 projects as follows: Westin Grande Sukumvit Hotel, Crowne Plaza Hotel, The Regent Bangkok Hotel, Sheraton Hua Hin Resort, Four Points Sheraton Hotel, Hua Hin Blue Lagoon resort condominiums and Island Villas, The Regent Residences and The Trendy.'
Natural Park is a very bad name. No banks and debt investors are willing to replace the loan from Krung Thai Bank. Krung Thai Bank is desperate to get out of N-Park. To mention that Natural Park is better than Grande Asset is a complete joke.
Edited by IndoRealty, 2006-02-20 20:12:51.
Posted 2006-02-20 22:55:27
IndoRealty, on 2006-02-20 20:11:48, said: Natural Park is a very bad name. No banks and debt investors are willing to replace the loan from Krung Thai Bank. Krung Thai Bank is desperate to get out of N-Park. To mention that Natural Park is better than Grande Asset is a complete joke.[/font]
I didn't see anywhere where Steve or anyone else for that matter said Natural Park was better than Grande Asset
Quote Your comment of Natural park being in difficulty is a little disengenous, given that while NP may hold just under 25% of Sansiri, a rating company like TRIS has no problem rating them at BBB stable; and the management involvement of NP is fairly uncertain anyway. There are plenty of parent companies who end up selling companies or parts belonging to them due to difficulty, I am sure Sansiri has the mgt expertise to run themselves without the NP clowns. Anyway, the shares they own in Sansiri were offered as collateral in the loans, and so what for Sansiri if they end up with another anchor shareholder....
In fact not positive at all but the point is that whether NP goes under or not, it won't affect Sansiri anyway....if anything perhaps it would be better if they did disappear and a quality invester takes on NPs' shareholding 
Having read all comments on this thread I would think that you have something to do with GA, certainly you can't take any kind of critsism from charles or steve even and you don't come back with any reasonable argument to defend your position.
I'm looking to buy somewhere in the next 12 months or so, and I trust more the objective analysis given by steve and charles to your ranting.......sorry
FYI I'm currently looking at developments by L&H, LPN and Supalai (all of which have been recommended by my Thai friends and collegues) with L&H being recommended as the best developer with the highest quality.
I like steve and others hope the regents ends up being successful to those who have invested and are to invest, but for now I'd like to see something more concrete from GA before placing a deposit with them. Several projects behind schedule and a few paper projects doesn't bode well for the future....perhaps the recent injection of foreign capital will help things move quicker just have to wait and see 
EDIT: For clarity  and spelling
Edited by moonoi, 2006-02-20 22:57:57.
Posted 2006-02-21 03:34:19
moonoi, on 2006-02-20 22:55:27, said: In fact not positive at all but the point is that whether NP goes under or not, it won't affect Sansiri anyway....if anything perhaps it would be better if they did disappear and a quality invester takes on NPs' shareholding
Having read all comments on this thread I would think that you have something to do with GA, certainly you can't take any kind of critsism from charles or steve even and you don't come back with any reasonable argument to defend your position.
I'm looking to buy somewhere in the next 12 months or so, and I trust more the objective analysis given by steve and charles to your ranting.......sorry
FYI I'm currently looking at developments by L&H, LPN and Supalai (all of which have been recommended by my Thai friends and collegues) with L&H being recommended as the best developer with the highest quality.
I like steve and others hope the regents ends up being successful to those who have invested and are to invest, but for now I'd like to see something more concrete from GA before placing a deposit with them. Several projects behind schedule and a few paper projects doesn't bode well for the future....perhaps the recent injection of foreign capital will help things move quicker just have to wait and see
EDIT: For clarity and spelling
The comment about N-Park came from me. Yes, it is very negative based on first hand experience. Before we moved to Central World, our company's office used to be located in Mercury Tower. It's a poorly maintained building with stinking toilets.
I dont know who you are referring to as working for GA, either me or IndoRealty. 
Also for clarity. Me no work for GA. Me bought a unit in Regent. Am ok with the delay as I can earn more baht to pay for the condo. Am also quite happy with price increases of the Regent; earn handsomely (on the paper still)  . Designs with no balconies, I like very much. So smooth and glassy. Glass buildings tend to last long may be 50 years with good maintenance and even then renovation would not be so painful when compared to brick and mortar buildings.
I am staying at L&H-built Langsuanville. L&H used cheap glass for Langsuanville so that during the day people from outside, especially Bank Thai employee, can see tenants inside, and at night tenants cannot see the outside since windows become mirrors with the light's on. Balconies @Langsuanville are just too scarry to stand on them. L&H is commendable only due to its habit of selling only finished units. 
Posted 2006-02-21 03:48:49
steveromagnino, on 2006-02-20 18:22:57, said: I have not to my recollection ever made such a comment. Please cut and paste where I made this.
And no... I have nothing to do with Sansiri or any of the other companies named above, I would not be that unprofessional to push something I do myself
I was under the impression that you had mentioned it a few times. My mistake 
you surely could share with us the company name. afterall we have our own viewpoint. So, is it Kudu? Raimonland? or Goldenland? 
Posted 2006-02-21 12:27:12
susah_sih, on 2006-02-21 03:48:49, said: you surely could share with us the company name. afterall we have our own viewpoint. So, is it Kudu? Raimonland? or Goldenland?
Nice guesses :-) actually we have had the chance to work on a JV with one of those and another is part of the same family although we have nothing to do with that either.
I cannot really disclose because it would not be fair to my bosses.
I think there are lots of problems with MANY of the developments here which is why I like the L&H approach where you get to see what you are buying before you get it. And their developments aren't perfect in every way, but at least you can see where and whether to fix.
Susan, if you don't like balconies, then this is definitely a strong point of Regent Res; I hope that you enjoy the unit you've bought when it is complete If it does end up like the plan, well it is going to hopefully be instrumental in shifting all the riff raff out of the area, and it is a beautiful design, most people agree on that 100%.
And.... Indorealty, I presume that this comment is aimed at me?
Again I am amazed at how uninformed people are so confident to give comments as if they know it all.
Then you state....
To mention that Natural Park is better than Grande Asset is a complete joke.
I did not mention that at all, in fact the only comment I made was to clarify that NP is a significant shareholder of Sansiri, has uncertain involvement in mgt (which I assume to be none) and has used the shares as security for loans. Therefore, you cannot tar Sansiri with the NP brush, and I used the phrase 'Natural Park clowns' because IMHO I think they should leave their clown shoes at the door when they come to work, they are not a solid operator. On this we agree.
The cut and paste of Grande Asset is directly from their own PR agency's speil, not mine. No mention of their other acheivements as families, and why should there be? It wasn't GA that did it, it was some of the major shareholders in GA. I could get into why building hotels and legacy land ownership are vastly different to building condos and have little relevance to building condos for the most part, but I think you already know all this. I bow to your superior knowledge of the industry, but for sure you will be read more frequently if you respond to posts in a slightly more civil manner.
moonoi, on 2006-02-20 22:55:27, said: FYI I'm currently looking at developments by L&H, LPN and Supalai (all of which have been recommended by my Thai friends and collegues) with L&H being recommended as the best developer with the highest quality.
LPN specialises in the mid market - mid-low mostly.
L&H is mostly mid and mid-upper.
Supalai is mid-upper mostly.
Sansiri is mid-upper to upper.
Horses for courses, depends on the location, but Asian property or L&H *(same family) aren't going to be 5 star, but they will be good honest 2-4 star depending on which project. Value for money is probably the best way to describe, and you often will know what you are getting into ,because they sell complete.
Supalai, check their development out in Pahonyothin, cheap at under 50k per sq m, but the build quality isn't perfect; if you go to the oldest buildling you can see what happens after 8 years.
Raimon, GOlden Land, Noble, all have some good some great, some only ok, worth checking out the completed units. I'd try to buy in a freehold area rather than leasedhold, once the crown property bureau starts to run at commercial rates, then areas like Langsuan may experience quite significant increases in lease rates (as it is leashold area). but that is personal speculation.....
LPN are awesome on the sharemarket, I really believe in what they are doing, but be careful, and know what you are buying, their developments are not luxurious, and are not marketed as such for the most part.
Good luck!
Posted 2006-04-01 22:03:26
hi...
the Regents have sent out letters to the buyers explaining the delays and offering slower payment alternatives.
i for one will not take the slower payment method and stick to the original contract.
anyway it looks like completion December 2007 now.
looking at the current state of the building i cant see this happening...any comments?
amarka
Posted 2006-04-02 06:55:56
amarka, on 2006-04-01 22:03:26, said: hi...
the Regents have sent out letters to the buyers explaining the delays and offering slower payment alternatives.
i for one will not take the slower payment method and stick to the original contract.
anyway it looks like completion December 2007 now.
looking at the current state of the building i cant see this happening...any comments?
amarka
I've been watching projects go up around here for some time.
Not unusual to spend a year on the pilings and basement, then about 1 floor per month goes up.
Another 6 months to outfift the interiors.
Expect allot of construction noise the first year after moving in.
Great location by the way.
Posted 2006-04-02 13:27:57
amarka, on 2006-04-01 22:03:26, said: anyway it looks like completion December 2007 now.
I personally think a December 2007 completion estimate is too optimistic....probably later part of 2008 earliest (if you talking about move-in).....
Posted 2006-07-01 15:36:44
trajan, on 2006-04-02 13:27:57, said: amarka, on 2006-04-01 22:03:26, said:
anyway it looks like completion December 2007 now.
I personally think a December 2007 completion estimate is too optimistic....probably later part of 2008 earliest (if you talking about move-in).....
hi all,
i guess the takeover is good news? does this mean there is more money available and things will speed up?
regards
amarka
US firm's take includes Westin Grande
Lehman Brothers yesterday took over Grande Asset Sukhumvit, which operates the Westin Grande Sukhumvit Hotel, after spending Bt3 billion to acquire a 50.1-per-cent stake in the company.
Giant Mauritius Holdings, owned by the US-based investment banking giant, and Hotel & Property Development Co Ltd, a Thai company, acquired 376.85 million shares - equal to 30.1 per cent of Grande Asset's paid-up capital - at Bt4.85 per share, Grande Asset reported to the SET. The purchase was made in 17 big-lot transactions worth Bt1.83 billion.
In addition, Giant Mauritius Holdings spent Bt1.2 billion on 250 million new Grande Asset shares that were issued, representing 20 per cent of its outstanding shares.
After the announcement, the SET ordered a suspension of trading on Grande Asset stock. Grande Asset operates the five-star Sheraton Grand Sukhumvit Hotel and other hotels.
Pongphan Sampawakoop, chief executive and chairman of Grande Asset Development Plc, said yesterday that some of his company's existing major shareholders had earlier agreed to sell their shares to the new shareholders.
A source closed to the deal said the Narula family, which is Grande's largest shareholder, had sold their stake as well.
Shareholders who sold their shares include Pongphan Sampawakoop (3.43 per cent), Puangchan Sampawakoop (3.58 per cent), Anunnthorn Phasittisakon (0.25 per cent), Suradej Narula (2.02 per cent), Varin Narula (0.5 per cent), Montira Narula (0.8 per cent), Amornratana Narula (1.23 per cent), and Narin Narula (1.51 per cent), Ravisara Narula (1.24 per cent), Indrani Narula (0.8 per cent), Amarin Narula (0.64 per cent), Sunita Narula (0.3 per cent) and other sellers unknown to the company (13.8 per cent).
Giant Mauritius Holdings and Hotel & Property Development Co Ltd will later conduct a tender offer for the remaining shares. The share purchase was more than 25 per cent of the company's stock, the trigger point that requires the buyers to tender for its remaining shares under Securities and Exchange Commission rules.
Giant Mauritius Holdings' registered capital is US$1,000 (Bt38,200), while Hotel & Property Development, a Thailand-domiciled company that is 99.9-per-cent owned by Hotel & Property Development Holdings, has registered capital of Bt20 million.
Source: Bangkokpost : Jul 1, 2006
Posted 2006-07-02 09:58:58
My two-bits for what they are worth..
You may survive because, if I understand you correctly, Lehman Bros. are the parent of this new buy-out. But I wouldn't hold my breath.
Why is anyone surprised that the market is starting to crumble (just like the condo buildings after they are five years old or so..)?
The prices were getting stupid. We all know the developers get their 'friends' to put down deposits to make it look like there are lots of buyers when in fact there are only a few. As someone else said don't believe this 100% sold out nonesense..it's just that - nonesense.
The farangs/japanese/tiawanese are the only people paying these stupid prices and are shoehorned into the 49% ownership ratio. So since no one else is buying the other units, who do you think has to pay for construction of the whole building?
You do. And if not enough of "You" come along in time to keep priming the pump, the bank turns off the tap, the cement company stops pouring the concrete, and that's it.
They keep telling you the new completion dates, moved to this day or that day...but eventually the company is wound up. You may get some of your deposit back but I doubt it.
Foreigners are scared off now by the recent news that Thailand would crack down on those using the Company route to buy houses and condos over-sold (above 49%).
And as I said, the 'foreigner's' money was essential to build the WHOLE building, not just 49% of it....that's why the prices were so high. Very few Thais (other than the rich ones who thought they could flip them later before completion - ironically to foreigners) were buying the other 51%.
So then everything grinds to a halt..Sorry Amarka, hopes this one gets through, but doesn't sound promising you have to admit - especially if they haven't broken ground two years on!
Posted 2006-07-02 11:48:29
Of the so many real estate companies in Thailand, Lehman chosed Grande Asset to invest its money. That really means something. Even if all of the banks pull the money out of Grande Asset; Lehman can easily raise more money for Grande Asset.
Bangkok has changed its floor-space-ratio regulation, making future projects more expensive.Grande Asset projects are undervalued. Where else can you buy a condo in the middle of Sukhumvit for Bt60,000/sq meter and very close to skytrain (1 minute walk) (Trendy project).
Why doubt the Thai couldn’t afford it?
There are so many Mercedes and BMW in Bkk. BMW 7 series are plenty abound in Bkk at around Bt14 million each (I read somewhere that BMW was able to sell 1,500 of its 7 series in Thailand). Buying a Bt14 million condo makes more sense than buying a Bt14 million car, no?
For a comparison, one can look at condo projects in Jakarta: grade A condo prices in Bangkok are comparable to those in Jakarta, and 99% of condo buyers in Jakarta are local. There are a lot more NEW condo projects in Jakarta than in Bangkok. So if Indonesians can afford it; I dont see why Thai cant, given that Thailand is a much more stable country that attracts foreign investors particularly from Hong Kong and Singapore. Even a taxi driver in Hong Kong can afford to buy Khun Charoen condo; HK taxi license costs HKD3,000,000 (Bt15,000,000) each (license only, not including the car); and you cannot get a bank to finance it!
For a comparison to Indonesia.
Property magnate Tan Kian of Indonesia has sold hundreds of million dollar apartments in Jakarta. His first project: JWMarriott Apartment (Syailendra) 72 units, each was averagely priced in the USD1 million range when it was first launched. Second project Ritz Carlton Apartment (Airlangga) 74 units; average price was USD2 million. Sudirman Residence low rise; starting price was USD350,000; Mayflower Apartment; 140 units, priced between USD500,000 to USD 1 million. And now his Pacific Place Apartments are priced between USD 1-2 million.
http://www.iht.com/a...0304jakarta.php
Lately the Indonesian property magnate Tan Kian has been selling, on average, almost one apartment a day. That is good business, considering that each of his luxury apartments in central Jakarta sells for $1 million to $2 million.
"We have no ads," Tan said of the 80 units in his Pacific Place development, due to open in 2006. "We are selling by invitation only. In the past two months, I think we have sold about 58 percent."
The rapid sales and high prices of Tan’s apartments in a string of developments altering the Jakarta skyline are evidence of a new business confidence after years of economic stagnation and political uncertainty.
In the midst of an economic upswing, developers are rushing to complete shopping malls, hotels, office towers and apartment buildings. In Jakarta alone, 72 apartment buildings are due to be completed by the end of 2007, according to Colliers International, a property analyst.
Developers are also currently planning or building 19 major retail centers.
The cranes dotting the city feed the ebullient mood in business, in contrast to the deserted construction sites that were the most visible signs of economic wreckage after the 1997 financial crisis.
More than $2 billion is estimated to have been invested in construction projects in central Jakarta.
The scale of construction investment is reminiscent of the pre-crisis days of former President Suharto, as are the projected economic growth rates.
In this year’s budget, the Indonesian government forecast growth of 5.5 percent, while the International Monetary Fund says that with continued economic changes, "over the medium term, Indonesia’s economy could grow in the 6 percent to 7 percent range."
The growth is coming mainly from consumer demand and some increase in private investment.
The banks appear to share the enthusiasm for the construction sector.
From the start of 2004, lending for construction has risen 60 percent, to 19.6 trillion rupiah, or $2.1 billion, according to figures from Bank Indonesia, the central bank.
Still, there are a few voices of caution, including Bank Indonesia, which has warned against excessive growth in real estate lending.
Michael Broomell, managing director of Colliers International Indonesia, says that some property developers overstate the extent and speed of sales. With the apartment supply expected to double over the next three years, he said, the risk of an oversupply is great.
"How is it going to get absorbed?" Broomell asked. "Even if the developers can sell it, who is going to live in it?"
As for the rapid growth of retail space, he adds: "I wonder whether there will be lights on."
Still, developers say that buyers are plentiful.
Large numbers of people purchase apartments even before they are built in anticipation of a quick capital gain.
Developers say some projects are sold out by the time of completion, including those with million-dollar price tags.
Tan’s 60-unit luxury Airlangga Apartment, attached to a Ritz Carlton Hotel that he is also building, is sold out ahead of its planned opening on May 1. Tan says his privately held Dua Mutiara Group will own 21 completed buildings by the end of 2006. He has $1 billion in projects under construction.
Tan, who inherited from his father a company with interests in chemical dyes and seafood supply, said he survived the economic crisis by being cautious. "We kept our debt very low," he said. "We are a conservative family; we grow our business conservatively."
Funding for his projects, including the sprawling Pacific Plaza with its 1.6-kilometer, or one-mile, pedestrian walk, retail arcade, hotel and apartments, comes "mostly from advance sales of the apartments and current income," he says.
But Tan is familiar with both business and political risks in Indonesia. His JW Marriott Hotel was the target of a terrorist bomb in 2003 that killed 12 people, closed the hotel for several weeks and cost $8 million in repairs and lost sales.
The Marriott, directly opposite Tan's Airlangga Apartment and Ritz Carlton, is now heavily fortified. Even so, another bombing outside the Australian Embassy last year cut hotel occupancy rates in half, although they recovered to almost 70 percent in March.
The dangers posed by the security situation are underscored by the origins of the money feeding the property boom. Analysts and business people say that Indonesians, particularly those of Chinese origin, who deposited money in offshore safe havens during the economic crisis and political instability after 1997 are bringing it back.
"If you talk to business people they say that the money that has come into Indonesia is mostly money that was parked by Indonesians in Singapore and Hong Kong," says Muhammad Chatib Basrie, research director of the Institute of Economic and Social Research at the University of Indonesia.
He says that this capital inflow, which rose strongly in the final months of 2004, has fueled the growth in property prices and the stock market.
Investors have been looking for, and getting, quick returns. The Jakarta Stock Exchange composite index was up 45 percent last year and is up 7 percent so far this year.
Tan says apartments that sold off-the-plan for $1.6 million last year fetched $2 million by the time construction was finished. But he knows the good times can go as quickly as they come.
"You have to show it is safe to invest," he says.
International Herald Tribune
Posted 2006-07-02 13:31:02
susah_sih, on 2006-07-02 11:48:29, said: Of the so many real estate companies in Thailand, Lehman chosed Grande Asset to invest its money. That really means something. Even if all of the banks pull the money out of Grande Asset; Lehman can easily raise more money for Grande Asset.
Agree this means something, but Grande Asset was just part of the package deal, correct? So my guess is they (Lehman) wanted the two posh hotels because they see growth and profit potential there. It may also be part of a wider global strategy. As for some condo buildings that haven't gotten off the ground, they may just let them atrophy until the next property upswing. It would have been discovered during due diligence process. Lehman can easily afford to do that whereas, Grande Asset may not have been in that kind of position..so that was why it was also a good deal for them.
susah_sih, on 2006-07-02 11:48:29, said: Bangkok has changed its floor-space-ratio regulation, making future projects more expensive.Grande Asset projects are undervalued. Where else can you buy a condo in the middle of Sukhumvit for Bt60,000/sq meter and very close to skytrain (1 minute walk) (Trendy project).
Yes this is true..but again isn't The Trendy one of those places that has kind of stalled? There are some quality new places nearing completion along that stretch there in mid-suk and look like they are using more than average concrete in construction (thicker floors etc). I'd agree that they will probably hold their value in the short-mid term better than others given the floor-free-space-ratio changes. Then again, if no new condo projects are built for awhile, who cares?
susah_sih, on 2006-07-02 11:48:29, said: Why doubt the Thai couldn’t afford it?
There are so many Mercedes and BMW in Bkk. BMW 7 series are plenty abound in Bkk at around Bt14 million each (I read somewhere that BMW was able to sell 1,500 of its 7 series in Thailand). Buying a Bt14 million condo makes more sense than buying a Bt14 million car, no?
Those cars belong almost exclusively to Chinese-Thai offspring of rich well-connected Thai-Chin. They may drive expensive cars, but they still tend to park them where they live -- not in condos but in houses within the family compounds, though there are always exceptions. As for Jakarta - don't know anything about the place, but I do know there is a lot of corruption there too (through well connected families) and so if even 10% of the 206,000,000 inhabitants of Indonesia are rich and if there is a tradition there of living away from parents (unlike here) then there are 2 million rich people in the market..that would make it a different situation.
Posted 2006-07-02 13:33:30
I meant to say 20 million rich people - not 2 million in the above post
Posted 2006-07-02 22:00:17
thaigene2, on 2006-07-02 09:58:58, said: My two-bits for what they are worth..
You may survive because, if I understand you correctly, Lehman Bros. are the parent of this new buy-out. But I wouldn't hold my breath.
Why is anyone surprised that the market is starting to crumble (just like the condo buildings after they are five years old or so..)?
The prices were getting stupid. We all know the developers get their 'friends' to put down deposits to make it look like there are lots of buyers when in fact there are only a few. As someone else said don't believe this 100% sold out nonesense..it's just that - nonesense.
The farangs/japanese/tiawanese are the only people paying these stupid prices and are shoehorned into the 49% ownership ratio. So since no one else is buying the other units, who do you think has to pay for construction of the whole building?
You do. And if not enough of "You" come along in time to keep priming the pump, the bank turns off the tap, the cement company stops pouring the concrete, and that's it.
They keep telling you the new completion dates, moved to this day or that day...but eventually the company is wound up. You may get some of your deposit back but I doubt it.
Foreigners are scared off now by the recent news that Thailand would crack down on those using the Company route to buy houses and condos over-sold (above 49%).
And as I said, the 'foreigner's' money was essential to build the WHOLE building, not just 49% of it....that's why the prices were so high. Very few Thais (other than the rich ones who thought they could flip them later before completion - ironically to foreigners) were buying the other 51%.
So then everything grinds to a halt..Sorry Amarka, hopes this one gets through, but doesn't sound promising you have to admit - especially if they haven't broken ground two years on!
hi -
do you know something that i dont?
there seems to be no reason for a real estate crash in thailand right now?
the thai economy is doing well. the world economy is doing ok too. asia is ok.
the lehman brothers takeover should support, not undercut the grande asset developements already underway.
the trendy is almost finished and will add to cash flow when it is finished - and the regents have probably raised enough cash to complete already. 60% sold out....and with the support of new shareholders will be even stronger.
and by the way thais have bought there - i have a complete list of all buyers and the prices everyone paid.
work is now progressing well. seems to be financed ok right now.
bangkok is a very cheap place to buy a condo and the quality is excellent.
there are of course always people around who trash things - no matter what - and there are always negatives if you search long enough.
but for me things with the regents have improved with this cash injection.
any more thoughts anyone?
amarka 
Edited by amarka, 2006-07-02 22:01:50.
nicolau
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Posted 2006-07-03 08:13:09
Geez Amarka, you are a tourist and already scouting for a second apartment in BKK? Wish I can trade place with ya! 
On a more serious note, Regent is pricey for BKK standard. Charles perhaps you know this better but when i got the sales prospectus late last year they were marketing it at above 95,000psm and the catch was something like already 70%-90% sold. Maybe this is not even correct then wouldn't this be misleading / misrepresentation? Is this legal even? I agree their prospectus are all glam and stuff but if you are a foreigner you can be easily deceived by their project names as well as credentials. Afterall it is their own marketing.
Amarka, perhaps you can consider Emporio Place at Sukhumvit 24. At least TCC can produce and they are setting to complete on time. I heard they are mostly sold out also and may not be cheap. But one thing i can be sure of is they got load of cash!!
amarka, on 2006-01-04 01:40:52, said: Hello charles,
when was the project first launched?
yes there is a difference between optimism and telling lies.
Mmm i like the location, but then i am only a tourist ( most of the time ) but i am looking for a second condo - given that this one is so late - can you recomend something that will be finished late 2006 ?
i am surprised that the sales have not been stronger at the Regents, but like i said i am an outsider, so i dont really know BKK that well.
thanks for the info.
amarka
charles, on 2006-01-03 11:12:41, said: Beer-diow, on khao-neow, mai-an!,2006-01-03 06:02:34, said: Good luck with GAM - hopefully they'll be more responsive on the ground. TBH, Dec 06 was always impossible given the size of the project, so this might not be a slip, just a return to reality from an overly-aggressive sales pitch...
Fair enough, but it is not far off 2 years between launching the project and breaking ground...not acceptable (in my opinion). An "overly-aggressive sales pitch" might also be described as downright lieing.
Personally, I just think that for a "high class" condo there are so many better choices (e.g. Madison, Fullerton, Park Chidlom etc) - and for all these places construction is quite well to very well advanced. I think the Regent's weakness in terms of management and also location (in my opinion) is evidenced by its weak sales - and if a place in this price range hasn't got good bookings by now, it looks like it will really struggle from now on.
<{POST_SNAPBACK}>
Posted 2006-07-03 20:47:56
nicolau, on 2006-07-03 08:13:09, said: Geez Amarka, you are a tourist and already scouting for a second apartment in BKK? Wish I can trade place with ya!
On a more serious note, Regent is pricey for BKK standard. Charles perhaps you know this better but when i got the sales prospectus late last year they were marketing it at above 95,000psm and the catch was something like already 70%-90% sold. Maybe this is not even correct then wouldn't this be misleading / misrepresentation? Is this legal even? I agree their prospectus are all glam and stuff but if you are a foreigner you can be easily deceived by their project names as well as credentials. Afterall it is their own marketing.
Amarka, perhaps you can consider Emporio Place at Sukhumvit 24. At least TCC can produce and they are setting to complete on time. I heard they are mostly sold out also and may not be cheap. But one thing i can be sure of is they got load of cash!!
amarka, on 2006-01-04 01:40:52, said:
Hello charles,
when was the project first launched?
yes there is a difference between optimism and telling lies.
Mmm i like the location, but then i am only a tourist ( most of the time ) but i am looking for a second condo - given that this one is so late - can you recomend something that will be finished late 2006 ?
i am surprised that the sales have not been stronger at the Regents, but like i said i am an outsider, so i dont really know BKK that well.
thanks for the info.
amarka
charles, on 2006-01-03 11:12:41, said: Beer-diow, on khao-neow, mai-an!,2006-01-03 06:02:34, said: Good luck with GAM - hopefully they'll be more responsive on the ground. TBH, Dec 06 was always impossible given the size of the project, so this might not be a slip, just a return to reality from an overly-aggressive sales pitch...
Fair enough, but it is not far off 2 years between launching the project and breaking ground...not acceptable (in my opinion). An "overly-aggressive sales pitch" might also be described as downright lieing.
Personally, I just think that for a "high class" condo there are so many better choices (e.g. Madison, Fullerton, Park Chidlom etc) - and for all these places construction is quite well to very well advanced. I think the Regent's weakness in terms of management and also location (in my opinion) is evidenced by its weak sales - and if a place in this price range hasn't got good bookings by now, it looks like it will really struggle from now on.
<{POST_SNAPBACK}>
hello nicolau...
thank you for your comments.
yes i am a tourists most of the time - but i do have some projects going on in thailand....
the reason for the condo is simple - i dont really like hotels and at the end of the day the money is wasted. thats why i bought a place at the regents.
i considered it a good investment too. i still do. my contract says completion december 2006.
i realise there are cheaper units around, but the location is good for me as "mainly a tourist" and for my tourist friends who visit me.
i would consider the emporio if it was finished or nearly finished, but i belive the finish date for the emporio is 2009? please correct me if i am wrong.
next year i have to travel to thailand maybe 6 times and spend maybe 120euros x 36 nights in BKK... thats a lot of wasted cash + always the hassle with the check in and check out.
so i certainly need a condo - rented or otherwise.....
thanks anyway
amarka
Posted 2006-07-03 21:41:12
I guess there is a lot more to this than the Bkk post is reporting. Lehman Brothers are not a charity - i'd hazzard a guess they have got this job lot cheap based on asset value of the hotels and plan to do two things:
1. Sell of the hotels to a most likely Singaporean property company
2. Sell off the development side most likely to another Thai developer - Raimon Land springs to mind as someone who have just concluded a huge financing arrangement with, you guessed it Lehman Brothers.
Anyway, I'd say however it works out, its better than leaving it as it was, otherwise the whole lot could have gone under as has been pointed out numerous times, this developer did not have any credibility in the market place.
Posted 2006-07-03 23:55:17
Digger, on 2006-07-03 21:41:12, said: I guess there is a lot more to this than the Bkk post is reporting. Lehman Brothers are not a charity - i'd hazzard a guess they have got this job lot cheap based on asset value of the hotels and plan to do two things:
1. Sell of the hotels to a most likely Singaporean property company
2. Sell off the development side most likely to another Thai developer - Raimon Land springs to mind as someone who have just concluded a huge financing arrangement with, you guessed it Lehman Brothers.
Anyway, I'd say however it works out, its better than leaving it as it was, otherwise the whole lot could have gone under as has been pointed out numerous times, this developer did not have any credibility in the market place.
Hello Digger,
yes it seems to be the best all round.
could it be my imagination or has progress speeded up at the Regents?
could be that they have now solved the financial/cash flow problems they seemed to have had?
fingers crossed!
amarka
Posted 2006-07-07 18:55:45
The Teigen brothers make so much money in such a short time.
Rich people are usually not stupid and they know more information
than regular people. Perhaps they know things in advance.
I stand to my view that Grande Asset is a great company to invest.
Frode Teigen himself makes close to USD6million in 4 months (Feb to June).
(100million shares x (4.85-2.60)=Bt225million). Other Teigen brothers are also rewarded handsomely.
******************************************************************************
Re Information of Other sellers unknown to the Company (Additional)
To President
The Stock Exchange of Thailand
As Grande Asset Development Public Company Limited (the "Company") has
informed selling of the Company's the ordinary shares of major shareholders to
Giant Mauritius Holdings and Hotel & Property Development Co., Ltd. at the
price of Baht 4.85 per share on June 30, 2006. The Company would like to
inform the additional data about Other sellers unknown to the Company (no.13)
that we have just received selling of the seller's the ordinary shares no.13
as follows:
Names of Sellers Number of Percentage of
Shares sold shares held (%)
1. Mr. Pongphan Sampawakoop 42,936,005 3.43
2. Mrs. Puangchan Sampawakoop 44,842,500 3.58
3. Mr. Anunnthorn Phasittisakon 3,135,000 0.25
4. Mr. Suradej Narula 25,387,827 2.02
5. Mr. Varin Narula 6,380,610 0.50
6. Mrs. Montira Narula 10,000,000 0.80
7. Mrs. Amornratana Narula 15,500,000 1.23
8. Mr. Narin Narula 18,989,185 1.51
9. Mrs. Ravisara Narula 15,500,000 1.24
10. Mrs. Indrani Narula 10,000,000 0.80
11. Mr. Amarin Narula 8,000,000 0.64
12. Mrs. Sunita Narula 3,628,885 0.30
13. Other sellers 172,551,188 13.80
13.1 Mr. Frode Teigen
(Remaining Share= 0)
Foreign 100,000,000 8.00
Thai NVDR Co.,Ltd. 7,651,200 0.61
13.2 Mr. Ole Teigen
Foreign 32,000,000 2.56
Thai NVDR Co.,Ltd. 850,000 0.07
13.3 Mr. Arne Teigen
Thai NVDR Co.,Ltd. 50,000 0.004
13.4 Others 31,999,988 2.56
Total 376,851,200 30.10
Please be informed accordingly.
Yours Sincerely,
Pongphan Sampawakoop
Chairman
***********************************************************
February 10, 2006
The President
The Stock Exchange of Thailand
Re: Resolution of the Board of Directors' Meeting No. 1/2006
Dear Sir,
On behalf of the Grande Asset Development Public Company Limited, I would like inform you of the resolution of the Board of Directors' Meeting No. 1/2006 held on February 10, 2006 as follows;
The Board of Directors approved to sell the increase of 100,000,000 shares (One Hundred Million) as determined during the Meeting of the Shareholders No. 2/2005 which was held on August 26, 2006. The shares will be distributed to 4 selected persons which are Mr. Frode Teigen, entitles for 25,000,000 shares, Mr. Ole Teigen, entitles for 25,000,000 shares, Bethleham International Limited, entitles for 30,000,000 shares and Miss Varinthorn Bulakul, entitles for 20,000,000 at Baht 2.60 (Two Baht Sixty Satang) per share. The total share value is Baht 260,000,000 (Two Hundred Sixty Million Baht) which the payment is due during February 13-17, 2006.
Sincerely yours,
Pongphan Sampawakoop
Chairman & CEO
***************************************************************
Edited by IndoRealty, 2006-07-07 19:03:39.
Posted 2006-07-08 19:28:44
amarka,
You posted: "the trendy is almost finished". Are you judging that by a recent press release from the developer? You certainly haven't looked at the with your own two eyes. Today, 7/8/06, there was an 8' pilr of rotting and torn plywood where the sidewalk used to be - accordingly, it's obvious that the demolition has not been complete, the interior structure has not been complete, the interior fitout has not been started, the exterior rework has not been complete, the exterior scaping hasn't been started. I'm not sure how you define "almost finished", but it certainly does not describe the condition of the Trendy condo project. From the looks of things, my opinion is that they have another year of work.
Posted 2006-07-11 03:35:04
backflip, on 2006-07-08 19:28:44, said: amarka,
You posted: "the trendy is almost finished". Are you judging that by a recent press release from the developer? You certainly haven't looked at the with your own two eyes. Today, 7/8/06, there was an 8' pilr of rotting and torn plywood where the sidewalk used to be - accordingly, it's obvious that the demolition has not been complete, the interior structure has not been complete, the interior fitout has not been started, the exterior rework has not been complete, the exterior scaping hasn't been started. I'm not sure how you define "almost finished", but it certainly does not describe the condition of the Trendy condo project. From the looks of things, my opinion is that they have another year of work.
hello Backflip,
my comments were based on feedback from others .... obviously wrong!
you mean they have not even completed the demolition?
your summary sounds glum indeed... one more year to completion.....
this is indeed a bit of a shock, i almost bought there until my place in the regents was finished.... this would have left me with 2 unfinished condos.... lol
the sales people from the regents took me out for lunch and apologised for the delay - but said the trendy would be ready in may 2006. when i last took a look at it in Feb 2006; i did not believe it. time has confirmed that.
you have confirmed to me the cynical behaviour of the sales staff.....
they could not care less...
i hope that things will now improve for the trendy as they seem to have done for the Regents
amarka
Posted 2006-07-11 04:05:25
amarka, on 2006-07-11 03:35:04, said: backflip, on 2006-07-08 19:28:44, said:
amarka,
You posted: "the trendy is almost finished". Are you judging that by a recent press release from the developer? You certainly haven't looked at the with your own two eyes. Today, 7/8/06, there was an 8' pilr of rotting and torn plywood where the sidewalk used to be - accordingly, it's obvious that the demolition has not been complete, the interior structure has not been complete, the interior fitout has not been started, the exterior rework has not been complete, the exterior scaping hasn't been started. I'm not sure how you define "almost finished", but it certainly does not describe the condition of the Trendy condo project. From the looks of things, my opinion is that they have another year of work.
hello Backflip,
my comments were based on feedback from others .... obviously wrong!
you mean they have not even completed the demolition?
your summary sounds glum indeed... one more year to completion.....
this is indeed a bit of a shock, i almost bought there until my place in the regents was finished.... this would have left me with 2 unfinished condos.... lol
the sales people from the regents took me out for lunch and apologised for the delay - but said the trendy would be ready in may 2006. when i last took a look at it in Feb 2006; i did not believe it. time has confirmed that.
you have confirmed to me the cynical behaviour of the sales staff.....
they could not care less...
i hope that things will now improve for the trendy as they seem to have done for the Regents
amarka
Hi, I just got back yesterday from Bangkok!!!
Went to see the work progress of the Trendy and Regent.
Nobody seem to be working on the construction.
It's really slow and might just end up being a stalled project.
Looks like I'm on a loss here................
Sorry to break the bad news....................
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