Bangkok?s developers are delaying the purchase of land until the new city plan comes into effect
As reported by The Nation, various property development companies in Bangkok have announced that they will delay purchasing land for new residential projects, amongst concern that the new city plan, which comes into effect at the end of May, will conflict with their project designs.
Opas Sripayak, managing director of LPN Development, said, ?We will not buy new land in the first five months of this year in Bangkok because we don?t know whether we?ll be allowed to build condominiums at the location where we buy the land?.
Nevertheless, the five month delay did not impact on LPN?s investment plan for 2013 when the company purchased 13 plots of land for residential developments since 2012.
Sripayak said, ?All our new projects launched this year have already secured environmental impact assessment, to ensure our projects will not be in conflict with the new city plan, because the definition of the area will also change?.
Currently, some areas are marked as red locations, meaning a high-density location, but the new city plan will change the present definition. Consequently, property development firms are being forced to wait and see, as the new draft will affect the price of land. Sripayak stated that as a result of the draft, land prices will rise in some areas and fall in others.
Srettha Thavisin of Sansiri accepted that the new city plan would have a bearing on the firm?s decision to purchase land in Bangkok from now until May.
Thavisin said that the new city plan was certain to impact all property firms developing residential projects in the Thai capital, and as a result, property firms would have to delay buying land.
The new city plan will not conflict with Sansiri?s business plan to launch 45 new projects, worth a total of THB61 billion (US$2.013 billion) in 2013. Sansiri has land both in Bangkok and Thailand?s provinces to develop in the coming year.
?We still buy land in the suburbs and provinces to develop residential projects in 2014 and we?re still buying land for developing single detached houses and townhouses in Bangkok. For condominium projects in Bangkok, which will be developed in 2014, that will start when the new city plan is launched in May,? stated Thavisin.
President and chief executive officer of Pruksa Real Estate, Thongma Vijitphongpun, also stated that the introduction of the new city plan in May will affect the firm?s outlook to purchase land for the development of new condominium projects. Pruksa has postponed buying land since quarter four 2013 until now, as the firm cannot apply for an environment impact assessment (EIA) permit for developing condominium projects.
Despite this, Pruksa will begin to purchase land in the latter half of 2013 to develop new residential projects in 2014. Pruksa has set aside a budget of THB9.2 billion (US$303.8 million) for these projects. According to Vijitphongpun, the firm currently has enough land for all of its 78 new residential projects, worth THB55 billion (US$1.816 billion), this year.
Kliangpol Pattanarak, director of the Department of City Planning at the Bangkok Metropolitan Administration, said the new city plan will become effective from May 16 2013 after having been revised for the third time.
The new city plan will connect Bangkok with the suburbs, particularly those locations served by the city?s mass-transit system. ?Five areas of Bangkok ? Bang Na, Bang Khen, Ram-Indra, Min Buri and Taling Chan are intended to become commercial suburban centres.
In addition, the draft adds conditions for the construction of residential buildings, and further regulates the size and floor-area ratio of residential properties in relation to the width of the road. Such changes will challenge property firms to develop residential property at current cost levels.
The new plan is based on the idea of reducing population density in the Thai capital by enabling more people to live in the suburbs and use public transport to commute to central Bangkok. The new plan also aims to develop Bangkok into a sustainable green city, working alongside agencies such as the Transport Ministry and the city planning departments of suburban provinces.
Source: http://www.property-report.com/new-city-plan-slows-down-bangkoks-property-developers-27045
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