Bangkok - Despite rising costs in construction
materials, luxury property developer Raimon Land insists the increases will not
impact the market’s upper end in Thailand nor impinge on the high specifications
it has set for its projects.
Land CEO, Nigel Cornick says prospective investors still view Thai real estate
as “very competitively priced and of extremely good value.”
According to Raimon Land Chief Executive Officer, Nigel Cornick, developers at
the high-end of the market are in a much better position than those focusing on
projects aimed at the middle- and lower-end of the residential property market.
“High-end property buyers accommodate higher prices to a greater degree than
those seeking lower-end residences, who are much more price-sensitive. Premium
real estate buyers understand the reasons behind the increased costs and absorb
them,” Cornick said.
He reported that raw material costs such as steel and concrete are difficult to
control, as they are “staples” of the building industry and remain in high
“The price of steel has doubled in the past 12 months and has been going up on
an almost daily basis, prompting us to hedge by paying upfront to secure today’s
price. This is a very volatile situation compounded by considerable worldwide
demand driven by the huge appetites for these materials in China, the Middle
East and India,” said Cornick.
artist’s render shows Raimon Land’s high-end luxury “Northpoint” condo project
at Pattaya’s Wongamat Beach.
He added that prices for its upcoming 185 Rajadamri project would break through
the THB300,000 per square metre price barrier, which would be double the average
price budgeted when Raimon Land acquired the site some time ago.
However, he insisted that the quality of the product and location would be the
key factors in driving the price up over time, as any developer of premium
property would expect, and not the increasing costs of construction.
He added that Thailand still held a strong advantage over other countries in the
luxury condominium sector.
“There will be some convergence on price, but fuel costs overseas are higher
than they are in Thailand and the pricing here for property is still
considerably low if compared to regional or international markets. A lot of our
buyers still see property here as very competitively priced and of extremely
good value,” he said.
Some developers, especially at the lower end of the market, may look to design
and specification changes to lower their costs, especially on final finishes.
They may paint external walls rather than use stone or tiles, lower standards on
finishes to apartment interiors and public areas or cut corners on appliances,
sanitary ware, glazing and wood joinery works.
Raimon Land Development Director Gerry Healy, asserted that as a luxury
developer Raimon Land would not downgrade any of its specifications.
“Although there is a certain price to pay for a high level of design, we are
looking at all specifications and designs in great detail to ensure that there
is no wastage. We have addressed and refined our designs so that the end
products are not affected,” he said.
Healy points to design elements on Raimon Land’s key 185 Rajadamri project that
set it apart as a luxury development, such as optimised unit planning to
maximise prime views to Lumpini Park and the Royal Bangkok Sports Club and a
wide variety of apartment typologies to give buyers flexibility in choosing a
unit’s size, layout and orientation at the expense of building efficiency.
Healy said: “We are continuing with the design incorporating 3.8-metre floor to
floor heights with full-height double-glazed windows to allow for clearer glass
with increased thermal performance. The point is that Raimon Land will not
compromise its quality, but rather introduce new standards.”
Raimon Land remains bullish on Thailand as exhibited in the upcoming launch of
The Lofts Southshore in Pattaya on July 17, but warns that a shortage of
contractors will make it difficult for all the products being marketed to
actually be built.
“We have already secured internationally-recognised contractors for our
projects, which is a huge comfort to our buyers,” Nigel Cornick said, adding:
“We are confident in our position and we feel comfortable moving ahead.”