Property firms cash in on EEC

PROPERTY FIRMS have shown strong confidence in the Eastern Economic Corridor (EEC) with the launch of new residential projects worth over Bt200 billion in Chon Buri, Rayong and Chachoengsao provinces since last year.

This drive has resulted in EEC land prices rising by over 20 per cent this year compared to last year, property experts said. Last week the Cabinet approved in principle the State Council’s draft bill for the EEC development project. According to the Act, EEC investors will get a package of investment incentives including a sharp cut in personal income tax to 17 per cent, land lease of up to 50 years and a free flow of foreign currencies in Chon Buri, Rayong and Chachoengsao. The government has targeted an investment budget of over Bt700 billion to develop the EEC from this year till 2021, while over 700 domestic and foreign firms have expressed an interest in the EEC. The EEC is expected to employ over 50,000 from this year till 2021. This will boost demand for homes in the area. It has been a challenge for property developers to expand their investments to develop residential projects in this location since last year. “We are interested in expanding our investment in Rayong, Chon Buri and Chachoengsao provinces as we see strong demand in this location after the government decided to develop the EEC,” said Pruksa Real Estate Plc’s president and chief executive officer Thongma Vijitpongpun. He added that the company had launched residential projects in Rayong, Chon Buri and Chachoengsao last year and this year worth over Bt5 billion after seeing the strong demand there.Twin attractions “Chon Buri is a welcome challenge for our business expansion because the province has many industrial estates and is also a tourist destination. This results in a workforce wanting homes priced at no more than Bt3 million per unit,” added Piya Prayong, Pruksa Real Estate’s president of value-added products. LPN Development, Sansiri, Property Perfect, CP Land and other listed property companies are also expanding their investments to develop residential projects to the east of Bangkok in provinces such as Chon Buri, Rayong and Chachoengsao, in order to serve strong demand in the region. “We’re developing single detached house, townhouse and condominium projects in the EEC area when we see strong demand to develop both industry and residential property in the EEC,” said Sansiri president Srettha Thavisin. “Land prices will be driven up in the region next year when the EEC law comes into effect and the government kicks off its investment programme.” Charn Issara Development plans to develop 9.6 hectares of land at Sri Racha district, Chon Buri, for residential projects this year and the next year to serve the strong demand in the market after the EEC kick offs, the company’s chief executive officer, Songkran Issara, said. Sena Development plans to develop 16 hectares of land at Sri Racha for residential projects for sale this year, company director Kessara Thanyalakpark said. According to a survey by the Government Housing Bank’s Real Estate Information Centre, Chon Buri leads the way with up to 400 project launches comprising 53,000 units worth Bt157 billion. Sri Racha district is a particularly popular area in the province, with 105 projects comprising 18,300 units worth up to Bt50 billion, followed by Pattaya district, the survey found. Some 94 per cent of Chon Buri’s new projects are by local developers, with the remainder coming from listed property firms headquartered in Bangkok. Rayong province has project launches worth around Bt50 billion combined for both condominiums and low-rise homes such as detached housing and townhouses, with a mix of local developers and property firms from Bangkok putting them on the market. Chachoengsao, meanwhile, has recorded new residential projects comprising around 4,000 units worth up to Bt20 billion combined, with prices ranging between Bt2 million and Bt4 million for condos, detached houses and townhouses, according to a survey by Marui Real Estate. Marui itself has launched a project valued at around Bt2 billion in the province. “Residential projects in the east of Thailand have started to expand following the government’s policy decision to develop the Eastern Economic Corridor, which will entail more infrastructure to link the Eastern Seaboard with other provinces, and will also promote new industrial investment across the area. “This is the main reason that is boosting the demand for homes for newcomers who will have to move to a location close to their place of work,” said Jones Lang LaSalle Thailand’s managing director, Suphin Mechuchep. Meanwhile, the Federation of Thai Industries (FTI) signed an agreement with the Industrial Estate Authority of Thailand for building an industrial estate that would support the government’s pursuit of innovative technologies for Thai industry. Bt3 billion would be invested to develop 320 hectares of land as an industrial estate for innovative technology. Following strong demand for land to develop both residential and industrial estates to serve the EEC, land prices at Rayong, Chon Buri and Chachoengsao rose by over 50 per cent, according to the chairman of Chachoengsao Chamber of Commerce Wattana Rattanawong. For example, 1.6 hectares of land locate close to Bang Pra Kong-Chachoengsao Road were sold for Bt15 million per rai last year, up Bt10 million, he said.