The State Railway of Thailand has held a ‘Market Sounding’ event to introduce and call for suggested development directions for its land at Nikom Km. 11. They also opened the forum for opinions from private operators.
The estimated investment in the project would be at least THB 50 billion. A number of private real estate developers expressed interest in this project. They also offered opinions on the development direction which would require the investment of diverse and experienced operators. In addition they also suggested that the State Railway should consider the duration of the lease for private operators, and that the lease terms should be for no less than 50 years.
On the whole operators expressed interest in the development project of Nikom Km. 11 as they view the space as prime property located in the centre of the city. It is also a large plot of land – which is scarce in the centre of Bangkok. Moreover in the future, this land will become a transportation hub when the Bang Sue Central Station has been completed.
Chonsin Vadanathorn, Senior Vice President, LH Mall & Hotel Co (pictured) offered his opinion that, should the project include the involvement of diverse operators, the outcome would likely be positive for the State Railway of Thailand. As the plot of land would encompass diverse projects, it should involve many parties as everyone brings their respective expertise to the table. For example, this group would include capable residential condominium developers and experienced office or retail space developers. The State Railway of Thailand would stand to benefit from land rental returns from the operators, as opposed to benefitting from just one investor-operator.
In terms of the lease duration, operators were of the opinion that the lease terms should be no shorter than 50 years.
They also believed the project would garner even more interest if the lease terms were up to 99 years, compared to the practice of neighbouring countries.
Samma Kitsin, Director-General, Real Estate Information Centre (REIC) said that the lease term of 50 years was a sufficient amount of time to generate returns on the investment for the operators.
Rungrot Chongsuchiphan, Business Development of Pruksa Real Estate, said that for those who purchase residences for self-occupancy, this would cover one lifetime span of between 50 and 60 years.
Phasutha Soithong, Assistant Department Director, Land Acquisition and Project Development of property developer Supalai, gave his recommendation that the development of residential units in the immediate area of a convention centre may impact the residents when there are conventions and exhibitions, which would see a huge influx of participants and thus create a lot of traffic in the area.
Pornarit Chounchaisit, President of the Thai Real Estate Association, recommended that, for this endeavour, there should be a specification of the time frame needed for the development of buildings on each plot, as well as the development of the roads that pass in front of each project. Both building and road construction plans should be well aligned. Should the roads be completed before the buildings, there is often damage done to the roads when building construction carries on, for example.
The event received ample interest from more than 40 private real estate operators and industry associations, including CP Land, TCC Land, Q House, Major Development, MBK, The Platinum Group, Siam Future, The Mall Group, LH Mall & Hotel, The Erawan Group, Homepro, Bhiraj Buri Group, BTS Group Holdings, Singha Estate, Supalai, Narai Property, Sammakorn, Pruksa Real Estate, Siam Piwat, Central Pattana, Tropical Heritage, Thai Hotel Association, Thai Condominium Association, Thai Real Estate Association, and the Housing Business Association.
