Google marks 10th birthday and celebrates the spirit of our users and the web, launches Project 10^100 (that's "ten to the hundredth") a call for ideas that could help as many people as possible, and a program to bring the best of those ideas to life. CNN will be covering this project, including profiles of ideas and the people who submit them from around the world. For a deeper look, follow along at Impact Your World.
Ideas are due by October 20, 2008. Get started submitting your own ideas, and come back on January 27th to vote on ideas from others. We hope you feel inspired enough to try. I wish you to submit your ideas here. Wishing good luck, and may the ones who help the most win.
Official Google Blog: Project 10^100
Thursday, October 9, 2008
Saturday, July 19, 2008
Deals for early birds
Rising inflation and soaring oil prices that push up construction costs have triggered increased activity in the new supply of condominiums reaching the Bangkok market this year, says James Pitchon, executive director of CB Richard Ellis.
As soaring building material prices pushed construction costs up by 20-30% in the first half of this year, end-users and investors are now shopping around for good units among buildings that have been completed or are to be completed this year because they were built from a lower cost base. This is also what gives this new batch of buildings a clear edge over new projects being sold off-plan.
One example Mr Pitchon gave is Athe'ne'e Residence on Wireless Road, where resale units have been sold for as high 150,000 baht a square metre but this is probably cheaper than the price a new project in the same area could be sold today.
"This year I expect we will see increased activity in The Met which will be due for completion in the first quarter of next year. People driving past that side of Sathorn will see very fast construction progress."
Soaring costs have hit Bangkok harder than some other key metropolises. Here, the construction element is as much as 50% of the development cost whereas in cities such as Hong Kong, Singapore and London the land element can be as much as two to three times more than the total construction cost. CB Richard Ellis has observed that building material costs are similar across the globe with the difference being labour charges.
Resale units at Athénée Residence are fetching up to 150,000 baht a square metre, but a new luxury building in the same central Bangkok location would likely cost a lot more.
Mr Pitchon added that while many markets around the world were declining, Bangkok was fortunate to be in a more stable position because price increases here had been closely linked to construction costs rather than land price inflation or abnormally large developers' profit margins.
"In summary, it's not going to be any cheaper to build a new condominium unless there is a fall in construction costs which is unlikely in the next 12 months."
Clearly, developers of condominiums reaching the market this year are sitting pretty, provided their projects are well located and the designs match market requirements. Aside from the price factor, buyers appreciate the fact that they are getting something that has already been built and can be assessed as is.
"Buyers will have the opportunity of having a wide range of projects that are approaching completion. They can see what they get in terms of quality. They significantly reduce risk because it has been built - if the building is finished, it's there and ready. "
Also it is end-users and investors who will drive prices in the new wave of buildings hitting the market this year and not speculators because they are the ones who will be buying. Mr Pitchon expects each building to set its own benchmark price based on what the market thinks the quality of development is.
However, he observed that not all buildings had benefited from this turn in the market. Some of the last generation of buildings, which are around 10 years old, are only able to achieve around half the price of the the product next door.
"One of the main reasons is co-owners have not invested in refurbishment of common areas. In a single ownership property such as an apartment or a hotel it would be normal every five to seven years to significantly remodel the lobby area and the corridors. This has not happened in many residential buildings because they were not able to get agreement from a large enough number of co-owners to contribute to capital improvements. The achievable price of some of these older buildings is the same as it was in 1994, whereas there is a new product selling at double the price."
Mr Pitchon underscored that today's situation was in fact an opportunity for existing building co-owners to substantially increase the value of their property by making their buildings more attractive. If a building's sinking fund has depleted then co-owners should raise the cash required because they should invest in their property.
From the developers' point of view, the challenge this year is managing risks. The biggest risk is the cost of building their projects and in Mr Pichon's view they would be wise to fix these costs with contractors before launching sales.
"In addition, buyers want to see that buildings have all the necessary permits before buying off-plan, so buyers will want to see a building permit and environmental impact assessment if that is required. This is because there have been cases where developers have not been able to transfer units because either they have been in breach of their building permit or they have not received environmental impact assessment."
Despite these market challenges, Mr Pitchon observed that Bangkok had changed significantly over the last 10 years with the biggest change being that condominium living has become more acceptable both for the wealthy and the middle class.
"People want to live in the city centre and the central routes of BTS and MRTA have firmly defined where the city centre is. So Bangkok has become an inward-looking city where people have no choice really but to live in condominiums because single detached houses and townhouses are too expensive in the city centre.
"Despite the challenges of construction costs, I think the concept of living in a condominium is here to stay and the development pattern of Bangkok has changed from a city that is constantly moving outwards to a city that has become far more centrally focused."
Source: BangkokPost
As soaring building material prices pushed construction costs up by 20-30% in the first half of this year, end-users and investors are now shopping around for good units among buildings that have been completed or are to be completed this year because they were built from a lower cost base. This is also what gives this new batch of buildings a clear edge over new projects being sold off-plan.
One example Mr Pitchon gave is Athe'ne'e Residence on Wireless Road, where resale units have been sold for as high 150,000 baht a square metre but this is probably cheaper than the price a new project in the same area could be sold today.
"This year I expect we will see increased activity in The Met which will be due for completion in the first quarter of next year. People driving past that side of Sathorn will see very fast construction progress."
Soaring costs have hit Bangkok harder than some other key metropolises. Here, the construction element is as much as 50% of the development cost whereas in cities such as Hong Kong, Singapore and London the land element can be as much as two to three times more than the total construction cost. CB Richard Ellis has observed that building material costs are similar across the globe with the difference being labour charges.
Resale units at Athénée Residence are fetching up to 150,000 baht a square metre, but a new luxury building in the same central Bangkok location would likely cost a lot more.
Mr Pitchon added that while many markets around the world were declining, Bangkok was fortunate to be in a more stable position because price increases here had been closely linked to construction costs rather than land price inflation or abnormally large developers' profit margins.
"In summary, it's not going to be any cheaper to build a new condominium unless there is a fall in construction costs which is unlikely in the next 12 months."
Clearly, developers of condominiums reaching the market this year are sitting pretty, provided their projects are well located and the designs match market requirements. Aside from the price factor, buyers appreciate the fact that they are getting something that has already been built and can be assessed as is.
"Buyers will have the opportunity of having a wide range of projects that are approaching completion. They can see what they get in terms of quality. They significantly reduce risk because it has been built - if the building is finished, it's there and ready. "
Also it is end-users and investors who will drive prices in the new wave of buildings hitting the market this year and not speculators because they are the ones who will be buying. Mr Pitchon expects each building to set its own benchmark price based on what the market thinks the quality of development is.
However, he observed that not all buildings had benefited from this turn in the market. Some of the last generation of buildings, which are around 10 years old, are only able to achieve around half the price of the the product next door.
"One of the main reasons is co-owners have not invested in refurbishment of common areas. In a single ownership property such as an apartment or a hotel it would be normal every five to seven years to significantly remodel the lobby area and the corridors. This has not happened in many residential buildings because they were not able to get agreement from a large enough number of co-owners to contribute to capital improvements. The achievable price of some of these older buildings is the same as it was in 1994, whereas there is a new product selling at double the price."
Mr Pitchon underscored that today's situation was in fact an opportunity for existing building co-owners to substantially increase the value of their property by making their buildings more attractive. If a building's sinking fund has depleted then co-owners should raise the cash required because they should invest in their property.
From the developers' point of view, the challenge this year is managing risks. The biggest risk is the cost of building their projects and in Mr Pichon's view they would be wise to fix these costs with contractors before launching sales.
"In addition, buyers want to see that buildings have all the necessary permits before buying off-plan, so buyers will want to see a building permit and environmental impact assessment if that is required. This is because there have been cases where developers have not been able to transfer units because either they have been in breach of their building permit or they have not received environmental impact assessment."
Despite these market challenges, Mr Pitchon observed that Bangkok had changed significantly over the last 10 years with the biggest change being that condominium living has become more acceptable both for the wealthy and the middle class.
"People want to live in the city centre and the central routes of BTS and MRTA have firmly defined where the city centre is. So Bangkok has become an inward-looking city where people have no choice really but to live in condominiums because single detached houses and townhouses are too expensive in the city centre.
"Despite the challenges of construction costs, I think the concept of living in a condominium is here to stay and the development pattern of Bangkok has changed from a city that is constantly moving outwards to a city that has become far more centrally focused."
Source: BangkokPost
Rental business grabs spotlight
With economic difficulty inhibiting business growth, an opportunity exists within the property industry to generate high returns on investment.
This opportunity lies in the rental segment.
Unlike condominium projects, which face a higher degree of competition, the rental business is growing increasingly popular among land owners in Sukhumvit Road and other main streets of Bangkok due to lower investment and less competition.
Jones Lang LaSalle's residential agency head Daonum Verapong said the rental business was becoming more popular among investors because it not only creates value from the assets, but also generates high profits.
"Many investors and owners of land between 200 and 400 square metres in Bangkok will build houses for rent for use by foreigners," he said.
"This kind of investment helps increase income for landowners rather than keeping the land, which otherwise devalues with time," Daonum said.
Clients in the luxury and high-end segments require a high degree of security, private zones and integrated services.
Clients, who are usually executives in large organisations, are willing to pay a rent of between Bt150,000 and Bt300,000 a month for a two-to-three-year contract for a property covering 400 to 450 square metres.
Beside houses located in business areas, Bangkok's surrounding districts - such as the Ekamai-Ram Indra Road, also known as the Beverly Hills of Bangkok - are some of the more interesting locations for the rental business.
This area is located close to the city, offers a convenient commute, is well known among foreigners and is well connected to Sukhumvit Road.
Due to these factors, the area is fast replacing Sukhumvit Road as the destination of choice for upper-class residents. Depending on the property's size, the rent can be between Bt60,000 and Bt120,000 a month.
Many properties are available for rent in the area.
Bangkok Villa, operated by City Realty and located on Ekamai-Ram Indra Road (Lat Phrao Soi 84) on 13 rai, is one such property. The project offers 30 to 40 units for a monthly rent of Bt80,000-Bt90,000 per unit. Each unit has two-to-three bedrooms, and offers facilities such as a sauna, cable television, a swimming pool, cleaning services and security.
Perfect Masterpiece on Ekamai-Ram Indra, developed by Property Perfect, offers 17 units for rent at Bt65,000 to Bt100,000 a month depending on the size of the property and duration of the contract. Jones Lang LaSalle is the sole agent for the project.
Daonum said this project targets foreign executives who are looking for single houses with a convenient commute to Sukhumvit Road .
This project, built on 97 rai, has 167 single house units, which are available either in finished form or can be built to order.
The project is valued at Bt3.49 billion and units are available for sale at prices between Bt11 million and Bt57 million. Although the project offers only 17 units for rent, owners in the project are also offering houses for rent. The rental fee can be negotiated within the Bt60,000-to-Bt70,000 range if the contract is for more than two years.
The rental market targeting foreigners is a new alternative for investors to generate high returns.
Many major property developers have turned their focus more on the rental business. Landowners, who are unaware of how to generate value from their assets, should consider the rental business for investment as it holds great potential at the moment.
Source: Nation
This opportunity lies in the rental segment.
Unlike condominium projects, which face a higher degree of competition, the rental business is growing increasingly popular among land owners in Sukhumvit Road and other main streets of Bangkok due to lower investment and less competition.
Jones Lang LaSalle's residential agency head Daonum Verapong said the rental business was becoming more popular among investors because it not only creates value from the assets, but also generates high profits.
"Many investors and owners of land between 200 and 400 square metres in Bangkok will build houses for rent for use by foreigners," he said.
"This kind of investment helps increase income for landowners rather than keeping the land, which otherwise devalues with time," Daonum said.
Clients in the luxury and high-end segments require a high degree of security, private zones and integrated services.
Clients, who are usually executives in large organisations, are willing to pay a rent of between Bt150,000 and Bt300,000 a month for a two-to-three-year contract for a property covering 400 to 450 square metres.
Beside houses located in business areas, Bangkok's surrounding districts - such as the Ekamai-Ram Indra Road, also known as the Beverly Hills of Bangkok - are some of the more interesting locations for the rental business.
This area is located close to the city, offers a convenient commute, is well known among foreigners and is well connected to Sukhumvit Road.
Due to these factors, the area is fast replacing Sukhumvit Road as the destination of choice for upper-class residents. Depending on the property's size, the rent can be between Bt60,000 and Bt120,000 a month.
Many properties are available for rent in the area.
Bangkok Villa, operated by City Realty and located on Ekamai-Ram Indra Road (Lat Phrao Soi 84) on 13 rai, is one such property. The project offers 30 to 40 units for a monthly rent of Bt80,000-Bt90,000 per unit. Each unit has two-to-three bedrooms, and offers facilities such as a sauna, cable television, a swimming pool, cleaning services and security.
Perfect Masterpiece on Ekamai-Ram Indra, developed by Property Perfect, offers 17 units for rent at Bt65,000 to Bt100,000 a month depending on the size of the property and duration of the contract. Jones Lang LaSalle is the sole agent for the project.
Daonum said this project targets foreign executives who are looking for single houses with a convenient commute to Sukhumvit Road .
This project, built on 97 rai, has 167 single house units, which are available either in finished form or can be built to order.
The project is valued at Bt3.49 billion and units are available for sale at prices between Bt11 million and Bt57 million. Although the project offers only 17 units for rent, owners in the project are also offering houses for rent. The rental fee can be negotiated within the Bt60,000-to-Bt70,000 range if the contract is for more than two years.
The rental market targeting foreigners is a new alternative for investors to generate high returns.
Many major property developers have turned their focus more on the rental business. Landowners, who are unaware of how to generate value from their assets, should consider the rental business for investment as it holds great potential at the moment.
Source: Nation
Thursday, January 17, 2008
Developers say rules will cut profits
Green law will offset power use with trees
Proposed changes to environmental impact assessments (EIAs) relating to green space and air conditioning have raised concerns among condominium developers who fear lower profit margins. Teerachon Manomaiphibul, chief operating officer of the listed developer Property Perfect Plc, said the new proposed EIA measures require projects with more than 79 units to have one tree per tonne of British Thermal Unit (BTU) capacity of air-conditioning systems. He said the measure would increase costs by 10-20% due to limited space for unit development.
"Every new project faces this problem," he said. "Many need to revise plans by reducing units to have enough space to plant trees. This will increase prices per square metre or developers will need to have lower margins."
Since the new EIA measures were proposed last year, Property Perfect had to delay by three months the launch of a condominium on Ratchadaphisek Road. The company had to reduce the number of units from 1,750 to 900.
Meanwhile, to maintain a gross profit margin of 35%, the average price per square metre would have to be increased to 65,000 baht from 55,000 baht, said Mr Teerachon. The project would be launched by the second quarter of 2008.
"It's a trade-off for condominium buyers. If they buy a project that received EIA approval before new measures, they will pay lower prices.," he added.
Among other condominiums that faced delays were Noble Development's Noble Nano, with about 500 units on Pattanakarn Road.
Although the project opened for bookings in August of last year, the company needed to refund deposits to its customers and would re-launch the project during the second half of 2008.
Noble president Thongchai Busrapan said the EIA board suggested that any project with more than 100 units should receive EIA approval before selling units to customers to prevent a possible problem such as an adjustment in the plan.
New condominiums today have more limited space as some are located in prime areas with high land prices.
"The board should consider applying international standards that allow developers to plant the trees elsewhere like in the park or allow them to contribute money to environment-related organisations," Mr Thongchai said.
Mayta Chanchamcharat, chief executive officer of Plus Property Co, a subsidiary of Sansiri Plc, said condo developers this year might face lower margins due to expensive EIA measures.
Mr Mayta said the project's sellable area would fall but that developers might not be able to increase prices due to stiff competition. Thus, developers might absorb the cost by reducing gross margins.
Kittipol Pramoj Na Ayudhya, vice-president and secretary-general of the Thai Real Estate Association, said the new EIA measures would delay construction and unit transfers. This could cause buyers to delay their purchases.
Phatra Securities said the impact of the measures is already being felt since condominiums launched after last July do not yet have EIA approval.
Condominium developers need to buy additional land to meet the requirements. This has allegedly increased by 4-5% for high-rise projects in prime areas and 1%-3% for mid-rise projects in the suburbs or C+ areas.
There should not be any impact on property companies' earnings in 2008 given that projects scheduled for 2008 are approved and under construction. Developers may face losses of 2-6% in 2009 if they need to buy additional land.
Source: Bangkokpost by KANANA KATHARANGSIPORN
Proposed changes to environmental impact assessments (EIAs) relating to green space and air conditioning have raised concerns among condominium developers who fear lower profit margins. Teerachon Manomaiphibul, chief operating officer of the listed developer Property Perfect Plc, said the new proposed EIA measures require projects with more than 79 units to have one tree per tonne of British Thermal Unit (BTU) capacity of air-conditioning systems. He said the measure would increase costs by 10-20% due to limited space for unit development.
"Every new project faces this problem," he said. "Many need to revise plans by reducing units to have enough space to plant trees. This will increase prices per square metre or developers will need to have lower margins."
Since the new EIA measures were proposed last year, Property Perfect had to delay by three months the launch of a condominium on Ratchadaphisek Road. The company had to reduce the number of units from 1,750 to 900.
Meanwhile, to maintain a gross profit margin of 35%, the average price per square metre would have to be increased to 65,000 baht from 55,000 baht, said Mr Teerachon. The project would be launched by the second quarter of 2008.
"It's a trade-off for condominium buyers. If they buy a project that received EIA approval before new measures, they will pay lower prices.," he added.
Among other condominiums that faced delays were Noble Development's Noble Nano, with about 500 units on Pattanakarn Road.
Although the project opened for bookings in August of last year, the company needed to refund deposits to its customers and would re-launch the project during the second half of 2008.
Noble president Thongchai Busrapan said the EIA board suggested that any project with more than 100 units should receive EIA approval before selling units to customers to prevent a possible problem such as an adjustment in the plan.
New condominiums today have more limited space as some are located in prime areas with high land prices.
"The board should consider applying international standards that allow developers to plant the trees elsewhere like in the park or allow them to contribute money to environment-related organisations," Mr Thongchai said.
Mayta Chanchamcharat, chief executive officer of Plus Property Co, a subsidiary of Sansiri Plc, said condo developers this year might face lower margins due to expensive EIA measures.
Mr Mayta said the project's sellable area would fall but that developers might not be able to increase prices due to stiff competition. Thus, developers might absorb the cost by reducing gross margins.
Kittipol Pramoj Na Ayudhya, vice-president and secretary-general of the Thai Real Estate Association, said the new EIA measures would delay construction and unit transfers. This could cause buyers to delay their purchases.
Phatra Securities said the impact of the measures is already being felt since condominiums launched after last July do not yet have EIA approval.
Condominium developers need to buy additional land to meet the requirements. This has allegedly increased by 4-5% for high-rise projects in prime areas and 1%-3% for mid-rise projects in the suburbs or C+ areas.
There should not be any impact on property companies' earnings in 2008 given that projects scheduled for 2008 are approved and under construction. Developers may face losses of 2-6% in 2009 if they need to buy additional land.
Source: Bangkokpost by KANANA KATHARANGSIPORN
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