New vacant plots on Lang Suan and Wireless roads, where reasonably priced land for new property development has been hard to find for many years, are about to hit the market soon.
A bid has been called for mixed-used development of the CPB’s prime plot (top left) on the corner of Rama IV and Wireless roads, formerly Suan Lum Night Bazaar. THANARAK KHOONTON
Most of the large plots in these prime locations are owned by the Crown Property Bureau (CPB) under leasehold contracts.
The lease contracts of one of them, a 15-rai piece on the corner of Lang Suan and Sarasin roads, have already expired.
According to a source in the property sector, the CPB is conducting a feasibility study on new development on this plot, part of the 70-rai plot it owns.
The bureau is considering both options _ developing the plot by itself and calling a bid for leasehold contracts of at least 30 years.
Most of the land on Lang Suan Road is leasehold, particularly on the East side opposite Mater Dei School, and the major landlord on East Lang Suan is the CPB, said Kulwadee Sawangsri, executive director for investment and land services at the property consultant CB Richard Ellis (Thailand) Co Ltd.
On West Lang Suan, there are more freehold plots than on the East side but most of them are smaller with estimated prices of around 1 million baht per square wah, she said.
As well, most of the leasehold plots on Lang Suan Road linking Rajadamri Road where many office buildings, serviced apartments, hotels and condominiums are situated are owned by the the Bureau of the Privy Purse.
However, there remain some freehold plots on Lang Suan Road. One of them is a three-rai site recently acquired by the property developer Pace Development, which plans to develop a 5-billion-baht luxury condo project.
According to the developer, the project, to be launched in the third quarter of this year, will have saleable area of around 25,000 square metres priced at 200,000 baht per sq m.
In April this year, another one-rai freehold plot was planned for development into a low-rise condominium. The Klass Langsuan project, with 110 units worth 1.1 billion baht, was sold out in only a month.
There is only one or two freehold condominium projects launched in the Lang Suan area during the past few years while demand is very strong, Mrs Kulwadee adds.
Wason Khongchantr, managing director of the property consultant Modern Property Consultant Co Ltd, said there are many freehold plots in prime locations like Lang Suan, Chidlom, Phloenchit and Wireless roads but the owners, most of whom old, wealthy families, refuse to sell.
Landowners on Lang Suan Road reportedly include Sumanee Gunakasem, who owns a plot opposite the Ambassador Court Hotel on Lang Suan Soi 6; the Kampu Na Ayudhya family whose plot is leased to The Millennia Tower; and the Pichaironarongsongkram family, who holds the title of a plot in upper Lang Suan.
Another prime piece is a one-rai plot where Central Chidlom department store currently uses as a parking area, called the Morakot Parking Lot. Located on Phloenchit Road, the plot is leased out by the Sukosol family for several years and the Central Group has been trying to buy it from the family.
Mrs Kulwadee said for land plots on Lang Suan Road, the nearer they are to Phloenchit Road, the higher their potential and prices due to proximity to the skytrain and the fact that Lang Suan is a one-way road.
But if a plot is located much further from Phloenchit and its owner wants to develop a condo project, it should has a view of the Lumpini Park so it can command a good selling unit price, she suggests.
The latest offering price of land in the Lang Suan area is recently quoted at up to 2 million baht per sq w after the most recent deal of a plot on Phloenchit Road was closed at 1.5 million baht per sq w a few years ago between the property developer Noble Development Plc and former owner Tan Passakornnatee.
But no deal at that price has been reached yet in the Lang Suan area, she added.
Mr Wason estimates the selling price of a condo unit will have to be around 200,000 baht per sq m if the land plot costs 1.5 million baht per sq w. The estimate is based on the 1:10 floor-to-area ratio (FAR), which shows the relation between total building floor area and the area of the plot and is used to regulate building construction and zoning.
If a plot is priced at 2 million baht a sq w, the condo price will reach 250,000-300,000 baht per sq m.
At these prices, only high-income earners and foreigners can afford a condo unit in the central business district. Thais and middle-income buyers will choose locations farther but still near the new and existing mass transit lines where prices are half those in the inner city, he noted.
"The planned Asean economic integration by the end of 2015 will boost condo prices in the central business district even further as there will be demand from foreigners working in regional offices relocated to Bangkok," he said. Besides, expensive as they are for local people, Bangkok condominiums remain cheaper than those in neighbouring countries like Singapore and Malaysia.
Nukarn Suwatikul, associate director for investment services at the property consultant Colliers International Thailand, said Wireless Road will have an entirely new look in the next few years as many property projects are planned in the area.
Most well known among them is the former site of Suan Lum Night Bazaar on the corner of Wireless and Rama IV roads.
A mixed-use development was planned for the CPB's 88-rai plot. Some landlords on Wireless Road are reportedly waiting to see an impact from this development, which is likely to be completed by 2016, she said.
In late March this year, the CPB announced a bid for this plot. It requires diverse developments for residential, office, hotel, retail, cultural and educational purposes.
Office buildings and a hotel are required to be on the main Wireless and Rama IV roads while other elements of the development will be inside.
All buildings are limited to 45 metres high, or around 15 storeys, as the plot, surrounded by Benchakitti Park near Queen Sirikit National Convention Center, is in Zone 4 under the 2004 Bangkok Metropolitan Administration regulation.
A bidder said over 20 entities are interested in the bid, half of which are listed companies. Some are keen only on the residential part while the others opt for retail projects as the auction allowed for both piecemeal and entire-project offers.
Most of the bidders will offer to develop the whole site. The investment value for this mixed-use project, which will be on a 60-year lease term, is estimated at over 40 billion baht.
Among the bidders are a few foreign investors, some of whom are in joint ventures with local developers. Submission of the bids is scheduled by the end of August this year.
Next door to this plot on Rama IV Road, a 3.75-rai plot where the Lumpini Boxing Stadium is currently located will enter the market next year when its leasehold contract ends. The stadium will be moved to a new location, a 6.5-rai plot on Ram Intra Road near the Royal Thai Army Sport Development Center.
Besides the CPB, Chulalongkorn University is the other major landlord in the central business district, sitting on a 1,153-rai plot that spans Banthat Thong Road to the West to Henri Dunant Road to the East, and Rama I to the North to Rama IV to the south, of which 30% are already leased for commercial use.
About the author
- Writer: Kanana Katharangsiporn
Position: Business Reporter