March 2013 | Khao Yai Residential Market

Thailand

Khao Yai Residential Market

Executive Summary
More than 550 units were launched and completed in 2012 and approximately 100 units were launched in the first three months of 2013, bringing the total number of residential units to approximately 4,650. More than 59% of the total supply or more than 2,700 units in Khao Yai are located in the central area, while another two areas are still significantly lower than the Central area. The total number of condominium units completed and registered at the Department of Land from 1995 until the first quarter of 2013 is approximately 350. The total supply of houses, villas and plots of land in development for sale as of March 2013 was greater than 4,300 units. The take-up rate of condominium units was more than 75% in the Central area, which is significantly higher than in the others. The Western area has the highest take-up rate of about 80% of the total houses, villas and plots of land in development for sale in the area, around 750 units. The average selling price of condominiums, houses and villas in the Eastern area is the highest at nearly THB80,000 per sq m for condominium units and around THB16 million baht per unit for houses and villas. This is because most of the condominium, house and villa projects in this area are located in the same area as golf courses and luxury resorts where buyers get privileges at the facilities. Many residential projects were launched in the past two to three years, some of them by wellknown developers as well as local developers who expanded their portfolios with new projects.

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March 2013 | Khao Yai Residential Market

Introduction to Khao Yai

Khao Yai is the area outside Khao Yai National Park, only two hours by car from Bangkok. In addition, Khao Yai has the seventh best ozone in the world and noticeably cooler weather almost all year compared to Bangkok. UNESCO recognised Khao Yai National Park as a World Heritage site in 2005, which guarantees that this area will remain

natural in the future. This makes the area the best location for a second home and many buyers, including Thai celebrities, politicians and famous businessman from Bangkok are also buying land in the area on which to build weekend villas, houses or condominium units in residential projects.

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Khao Yai Residential Market

March 2013 | Khao Yai Residential Market

Historical supply of condominiums, landed property units and plots of land by year, March 2013

Source: Colliers International Thailand Research Note: The figures include landed development units, plots of land and condominium units. Excluded are condominium units which are under construction.

The first residential project in Khao Yai started in 1995. The ripples of the property boom in Bangkok could also be felt in Khao Yai. The residential market and hotel development in Khao Yai began during the same period, all of which were located close to a hotel or resort or in the same project. Thailands economic crisis in 1997 put a halt to the nascent property market in the area and from 2001, no new supply was added to the market until 2005. It was not until 2007 that the next

growth spurt in Khao Yai began in earnest. In the past two to three years, many residential projects were launched in Khao Yai, and some of them belonged to well-known developers. More than 550 units were launched and completed in 2012 and approximately 100 units were launched in the first three months of 2013, bringing the total number of residential units to approximately 4,650.

Historical supply of condominiums, landed property units and plots of land by location, March 2013

Source: Colliers International Thailand Research Note: The above figures include landed development units and condominium units

The Central area was the most fashionable for residential projects, due to this area being along Thanarat Road, which is the main road connecting Mittraparb Road and Khao Yai National Park. In addition, Thanarat Road is the first road ever in the Khao Yai area. Most residential projects, especially those launched before 1999 are located along the Thanarat Road because it is the main road in the Khao Yai area.

More than 59% of the total supply or more than 2,700 units in Khao Yai are located in the Central area, while another two areas are still significantly lower than the Central area.

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Historical supply by property type and year, March 2013

Source: Colliers International Thailand Research Note: Landed development is housing and villa development projects.

More than 2,700 units or 58% of the total supply in Khao Yai are plots of land in development for sale. The first project with more than 500 units began in 1995, when Khao Yai became famous. Approximately

180 condominium units were added in the Khao Yai area in 1995, but after that there was no new supply until 2006, which then slightly increased every year.

Current supply by location, March 2013

Source: Colliers International Thailand Research Note: The above figures include landed development units and condominium units.

The total number of residential units in Khao Yai is approximately 4,650. The Central area contains the highest number with approximately 2,700 units, while more than 1,000 units and 880 units are located in the Eastern and Western areas, respectively. The Central area is the most popular for residential projects because it covers both sides of

Thanarat Road which connects Mittraphap Road to Khao Yai National Park. Most of the development projects in Khao Yai are located along this road. Although a lot of residential projects were launched in the other two areas during the past few years, it is still less than the total units in the Central area.

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March 2013 | Khao Yai Residential Market

Khao Yai Condominium Market supply

Historical supply by year, March 2013

Source: Department of Land and Colliers International Thailand Research Note: Construction completed and registered at the Department of Land

The total number of condominium units completed and registered at the Department of Land from 1995 until the first quarter of 2013 is approximately 350. The first condominium project in Khao Yai started in 1995 but after that, there was no new condominium project development until 2005.

The largest share of the residential market in Khao Yai is landed development and plots of land in development for sale, but some condominium projects were launched in this area and saw high takeup rates from buyers.

Historical supply by location, March 2013

Source: Department of Land and Colliers International Thailand Research

All condominium projects in Khao Yai are located in the Central area. This area covers both sides of Thanarat Road. Almost all projects are located along this road and the sub-roads of Thanarat Road, as this is the first and main road to Khao Yai National Park. This area is dense

with residential projects, resorts, hotels and many supporting facilities, so developers are looking for new locations for new projects on two other main roads and sub-sois connected to the main road.

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March 2013 | Khao Yai Residential Market

Condominium units available for sale, March 2013

Source: Department of Land and Colliers International Thailand Research

There are approximately 650 condominium units available for sale out of a total of approximately 2,120 units. The highest number are in the

Central area where new projects with nearly 700 units were launched in 2012.

Units Launched
Condominium units launched from 2008 to March 2013 by location

Source: Colliers International Thailand Research

Nearly 700 units were launched in 2012 in the Central area which was the highest number on record from five projects. In addition, the Western area also broke a record in 2012, due to more than 470 units being launched, most of which are at two condominium projects from

Sansiri Plc. While only approximately 80 units were launched in the Eastern area in 2012, but the number skyrocketed up to nearly 390 units in the first three months in 2013.

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Future Supply
Cumulative future supply by location and year, March 2013

Source: Colliers International Thailand Research

Condominium units are becoming the most popular type of residence in Khao Yai, especially in the past one to two years. This is due to lower prices compared to houses or villas as well as the easy maintenance. Additionally, most condominiums in Khao Yai are located in easily accessible locations or in communities in close proximity to support facilities. Approximately 380 units are scheduled to be completed in 2013, with around 170 of them in the Central area, nearly 130 in the Eastern area and around 80 units in the Western area. The Central area is still the

most fashionable for condominium development and has more than 890 units scheduled to be completed in 2015, because many condominium projects were launched in 2012. Some condominium projects are scheduled to be completed in 2013 2015 in the Western and Eastern areas. Those two areas are the new locations for condominium development in Khao Yai, although both areas still lack support facilities.

Demand
Take-up rate of all condominium projects in the market, March 2013

Source: Colliers International Thailand Research

The take-up rate of more than 77% in the Central area is significantly higher than the 76% in the Eastern area and nearly 60% in the Western area. The majority of them are located along Thanarat Road where

most of the facilities in the Khao Yai area are, which is a major attraction for buyers.

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Price
Average selling price of condominium units available for sale by location, March 2013

Source: Colliers International Thailand Research

The average selling price in the Eastern area is the highest at nearly THB80,000 per sq m. This is because many luxury condominium projects were located in the area with a ,mountain view and a peaceful atmosphere; some of the projects in the area were located on or near

a golf course. The average price for the Western area is approximately THB68,900 per sq m, the lowest in the Khao Yai area, because there are few support facilities in this area.

Average selling price of condominium units available for sale by location, March 2013

Source: Colliers International Thailand Research

Some new condominium projects from listed companies in the Western area raised the average selling price from around THB37,000 per sq m in May 2012 to more than THB68,800 per sq m in March 2013, a dramatic increase of more than 86% within a few months. Two other locations also increased over the past year by around 11 and 23% in the Central and Eastern areas, respectively.

The average selling prices in all locations increased from the past year, due to the increase in land prices in the Khao Yai area over the past few years, more than 30% depending on location and land area. In addition, some listed and well-known developers launched their projects in the area with higher prices, which affected the overall average price, especially in the Western area.

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Khao Yai Market for Housing and Plots of Land in Development supply
Historical supply, March 2013

Source: Colliers International Thailand Research Note: The number of units includes houses, villas and plots of land for sale in development projects only.

Plots of lands for sale by developers in the Khao Yai area began in 1995 at the same time as hotel development because they are within the same area as hotel projects. No new supply was added to the market from 1996 to 1998 due to the slump in the property market throughout Thailand following the Asian financial crisis in 1997. It began to grow again in 1999 - 2000. The number of landed developments in Khao Yai in 2000 was around 900 units. Since these take time to sell, there was no new supply from 2001 until 2004.

The new supply of houses, villas and landed development projects from 2006 to 2010 was different from the past because they were not located in the same area as hotels or resorts and most of them had land with houses or villas. More than 530 units per year were launched during the years 2007 - 2012, so the total supply in March 2013 was greater than 4,300 units.

Supply by location and year, March 2013

Source: Colliers International Thailand Research

The majority of landed development projects are in the Central area. This was the first area for land development projects in Khao Yai, followed by the Western area. The Eastern area only started development in 2007 or about 12 years after the first project in the Central area, but in 2010 the total number was more than in the Western area and continues to grow.

The total current supply in the Central area is more than 2,300 units followed by the Eastern area with around 1,060 units and approximately 860 units in the Western area. The high numbers in the Khao Yai area mean that there are many units waiting to be absorbed by the market and that older, unmaintained units may now be difficult to sell. Some projects stopped construction and will restart again only after the buyer signs an agreement.

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March 2013 | Khao Yai Residential Market Houses, villas and plots of land in development available for sale in the market by location, March 2013

Source: Colliers International Thailand Research

The Central area has the highest number of available units with more than 870 out of the total supply of more than 2,380 units. This is because many land plots offered for sale in the past 15 to 17 years are still available on the market as some projects lacked marketing strategies and maintenance, so do not attract buyers. The Eastern

area is second, with nearly 450 of the total of more than 1,050 units, although all units in this area were launched from 2007 to March 2013. This was due to the main road in this area being parallel to Khao Yai National Park, so all projects have a mountain view and a quieter and more private atmosphere.

Units launched
Houses, villas and plots of land in development units launched from 2005 to May 2012 by location

Source: Colliers International Thailand Research

A large supply of approximately 3,430 units, or 74% of the market was launched after 2006, especially during 2010 and 2011 when more than 600 units were launched each year. The Eastern area just started to boom in 2010 with a lot of houses, villas and plots of land in development for sale launched in the area. In addition, some of the projects in the area were luxury residential projects at the golf course or with a unique design significantly different from the other markets in Thailand, such as The Eyrie Khao Yai, Toscana Valley and Kirimaya Residences.

Khao Yai is the best location for Thai retirees or high net worth businessmen because of its refreshing atmosphere, tranquillity and location not far from Bangkok. The first people who entered the Khao Yai market were from this group. However, many young successful people and a new generation of businessmen are looking for a second home in Khao Yai, so developers in the area try to attract these buyers with outstanding design, full facilities and services, and a private atmosphere.

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March 2013 | Khao Yai Residential Market

Future supply
Cumulative future supply scheduled to be completed from 2013 to 2015 by location, March 2013

Source: Colliers International Thailand Research

Approximately 410 units are scheduled for completion in 2012 in all locations, and nearly 75% of these are located in the Eastern area. The Central and Eastern areas are most fashionable for residential projects in Khao Yai and nearly 1,000 units are scheduled for completion next

year. However, the completion date also depends on the developers, as some housing projects in Khao Yai are made to order and construction only begins after the buyers have signed an agreement.

Demand
Take-up rate for all projects in the market by location, March 2013

Source: Colliers International Thailand Research

The Western area shows the highest take-up rate of about 80% of the total supply in the area or around 750 units. This is because some projects sold out very quickly due to their lower selling prices when compared to other locations. Sales in the Central area, which is more

than 60% started since 1995 and until today there are still available for sale. The Eastern area is a new area in Khao Yai for houses and land development. The higher selling price there also lowers the take-up rate in the area.

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Price
Average selling price by location for houses and villas available for sale, March 2013

Source: Colliers International Thailand Research

The average selling price in the Central area is the lowest at approximately THB8.6 million, although most house and villa development projects are located there. A lot of the mid-range housing market is also in this area. The prices at some projects in the Central area are starting from lower than THB1.5 million for townhouses and up to THB48 million for the highest price villas in the Khao Yai area.

The average price for houses and villas in the Eastern area was the highest in the Khao Yai area at around THB16 million, as most of the house and villa projects in this area are located in the same area as golf courses and luxury resorts where buyers get privileges at the facilities.

Average selling price by location for plots of land in development available for sale, March 2013

Source: Colliers International Thailand Research

Prices of plots of land in development at all three locations in Khao Yai area were similar. The average selling price in the Western area is lower than in the Central and Eastern areas, due to some of the projects in the area being located far from the support facilities in the Khao Yai area; some projects were launched more than 10 years ago. While the Eastern area was highest most of which are located on the golf course and some of the projects were launched in these few years only during the boom period.

The area of the plots of land in development for sale start from 60 sq wah or around 240 sq m, ranging up to more than 500 sq wah or approximately 2,000 sq m.

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March 2013 | Khao Yai Residential Market

Tourism
Tourist arrivals at Khao Yai National Park

Source: Department of National Parks, Wildlife and Plant Conservation and Colliers International Thailand Research

Khao Yai was registered as a World Heritage site in 2005 and this increased the number of tourists in 2006 by around 144% from 2005. However, after that, the Department of National Parks, Wildlife and Plant Conservation tried to control the number of tourists, so the

number sharply decreased in 2007 to not higher than 870,000 per year. Thais are the main group of tourists visiting Khao Yai National Park and less than 5% are foreigners.

Foreign tourist arrivals at Khao Yai National Park

Source: Department of National Parks, Wildlife and Plant Conservation and Colliers International Thailand Research

Most buyers in the Khao Yai area are Thai which is different from other tourist destinations in Thailand. This is due to the small number of foreign tourists who visit Khao Yai and the fact that most foreign tourists prefer to look for a second home in Thailand not far from the beach, so Khao Yai is not their destination of choice at the moment.

Approximately 28,700 foreign tourists visited Khao Yai in 2012, which is only around 3.5% of the number of Thai tourists. Most foreign tourists who visited Khao Yai area stayed around one to three days, then returned to Bangkok or went to other provinces.

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Government Development Plan Affected

Infrastructure development is the main factor that will change or develop some areas along the development line. The two main government development plans that affect the Khao Yai area are: 1. Motorway from Bangpa-In to Nakorn Ratchasima

The project will start from Bangpa-In, Ayutthaya Province and pass through four districets of Saraburi Province (Nongkhae, Munag Saraburi, Kaeng Kot and Muaklek), then directly to Nakorn Ratchasima Province through Pak Chong, Sikhio, Sung Noen, Kham Thale So and Muang Nakorn Ratchasima districts. The total length of this project is approximately 196 km. The Department of Highways plans to start this project in 2013 and it is scheduled to be completed in 2016, but this project still faces the opposition from the local people. This project affects a lot of people along the development line including some developers who occupy some plots of land and would lose some of their land bank to this project. This new motorway is a positive factor for the Khao Yai area, as people from Bangkok will benefit from a shorter travelling time to Khao Yai.

2. High-Speed Train (Bangkok to Nong Khai) The Ministry of Transport announced a development plan for four high-speed train lines linking Bangkok with the North, South, East and North-East. The North-East line is planned to start from Bang Sue train station going to Ayutthaya, Saraburi and then to Nakorn Ratchasima; the total distance from Ayutthaya to Nakorn Ratchasima is around 168 km and will have three stations (Saraburi, Pak Chong and Nakorn Ratchasima). After that it will run directly to the bordering Nong Khai Province and cross the Mekong River to Laos. The average speed of the high-speed train is approximately 250 km / hour, so this project will boost demand for residences and expand the community along the development line, as people will be able to live farther from their work on cheaper land and residential areas.

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3. New Nakorn Ratchasima Town Plan The Ministry of Transport announced a development plan for four high-The Department of Public Works and Town & Country (DPT) Planning announced the new Nakorn Ratchasima Town Plan last year. This new town plan shook the Khao Yai property market. This was because the existing Khao Yai area cannot develop or build any new commercial project or building higher than six metres and or with a usable area more than 200 sq m. The new rules and regulations in this new town plan will affect the future development plans in the Khao Yai area. Because condominiums, hotels, resorts and residential projects cannot be built in the area, it is considered the end of the Khao Yai property market. Because of the big impact on the Khao Yai property market, a lot of local and big name developers as well as people who own the land in the Khao Yai area are protesting and requesting that DPT postpone and revise the new town plan. The Department of Public Works and Town & Country (DPT) Planning accepted all requests and they agreed to revise the town plan to have less of an effect on everyone.

Outlook
Many residential projects have expanded into other areas of Khao Yai. Although the central area is still the most fashionable, the eastern and western areas of Khao Yai are also growing, albeit gradually. Some support facilities such as mini-marts and restaurants expanded into these areas following the residential projects. The eastern and western areas will gradually become the new communities of the future and must attract more developers and buyers. Some developers and property organisations are more concerned about oversupply in the Khao Yai area, due to the number of residential projects launched during the past few years. Some projects have shown slow sales growth after their official launch however. In addition, the main buyers in Khao Yai are Thais who mostly go there on weekends only, making the property market in Khao Yai very quiet during weekdays. Some Khao Yai developers prefer to launch their campaigns or set up events in Bangkok to increase their take-up rate. The increase in newly launched projects in 2012 was highest on record for Khao Yai, especially condominium projects which were more numerous than houses and villas development projects. Condominiums were very welcome and have a high take-up rate as younger buyers moving to Khao Yai prefer cheaper residential units with lower maintenance costs in the same location as luxury villa projects. In addition, condominium still cheaper compared to house and villa units as well as easy maintenance, but houses and villas still the best choice for second home in Khao Yai area. A lot of luxury residential projects in the Khao Yai area have a unique design significantly different from other residential projects in other markets in Thailand, such as Tuscany, Provence, American Country and French Country style. These architectural styles are becoming the new design trend for residential projects in Khao Yai, while the old cowboy and country styles gradually disappear. The average price of condominium and housing units in the Khao Yai area increased from the past year by around 18, 10 and 25% for condominium, houses and land plots in development for sale, respectively; the entering of listed and well-known developers into Khao Yai market are also a factor affecting the average price. The average price of residential units in 2013 slightly increased from 2012, due to many factors which affected construction costs. The new Nakorn Ratchasima Town Plan is still a major concern for developers and land owners in the Khao Yai area, because if it is the same as the previous draft, it will limit the building area and building appliances, which will directly affect the Khao Yai property market. Property prices in the existing projects are expected to increase if there are restrictions on building new residential projects in the area. Although the Department of Public Works and Town and Country Planning accepted the requests from those affected to revise this provision, developers and land owners are still monitoring the situation closely.

computer generated graphic

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Appendix

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March 2013 | Khao Yai Residential Market

ZONING

Central Area:
This area covers both sides of Thanarat Road starting from Mittraphap Road to the entrance of Khao Yai National Park. This is the main road and is the area that was initially developed in Khao Yai, starting with the Juldis Khao Yai resort and Bonanza Khao Yai which opened in 1987 and 1992, respectively. This area contains the most developments and represents the emerging hub of Khao Yai.

Western Area:
Pansuk - Kudkhla Road is the other main road connecting Mittraphap Road to Khao Yai. Residential projects only started to be developed there over the last four to five years. Boonrawd Brewery Co. Ltd has operated PB Valley Winery there since 1989.

Eastern Area:
The is the new development area of Khao Yai with many high-end projects located along the Khao Yai - Wang Nam Khiao Road which connects to the Wang Nam Khiao district.

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