The annual report, which benchmarks the construction costs in 55 countries across the globe using UK prices as a baseline, found that Europe continues to be the most expensive continent in which to build, providing eight of the top ten entrants in the final league table.

According to the report, the price of construction in Switzerland is 71% higher than in the UK where costs are now more than 20% below their peak price in mid-2008.

Overall, the UK is now tied with Bahrain as the twelfth most expensive place in the world to build, up four places from 2010 where it finished in sixteenth place. However, this has been largely due to falling costs in other countries rather than rising prices in the UK where construction costs have continued to drop over the last twelve months, with contractors prepared to work for ever slimmer profit margins to try and secure work in an increasingly competitive arena.

Denmark retained its position as the second most expensive place to build, closely followed by its Scandinavian neighbour Sweden. Australia and Canada were the only non-European markets to make it into the top ten although Bahrain just missed out, finishing in twelfth place overall alongside the UK. India and Sri Lanka were tied as the cheapest countries in which to build with construction costs estimated to be 72% cheaper than the UK baseline.

Mathew Riley, head of cost and commercial at EC Harris, said: “It’s no surprise to see that Switzerland and the Scandinavian countries are the most expensive places to build as high labour costs and the need to import materials are all combining to drive prices up. The interesting element is that we’re now starting to see signs that developing nations are closing this gap as they continue to invest in significant new-build programmes to fuel further GDP growth.”

 Ten most expensive countries in the world to build: 1 – Switzerland 2 – Denmark 3 – Sweden 4 – Ireland 5 – France 6 – Australia 7 – Germany 8 – Austria 9 – Belgium 10 – Canada

 The report also underlines the need for Western economies to start planning ahead now to guarantee access to the raw materials needed for future construction projects. During the economic downturn global supply chains have shifted their focus to meeting the demands of economies like China and India and are likely to continue to prioritise them over the coming years as they offer the greatest revenue growth opportunities. Without robust levels of risk analysis here, contractors will not be able to guarantee continuity of supply as materials will be less readily available or disproportionately more expensive.

http://www.internationaleat.com/news_features/ten-most-expensive-countries-in-the-world-to-build

Currently, prices in Hong Kong are about five times as great as prices in Bangkok, with new condo units fetching as much as THB1.2 million (US$40,080) per sq m. Currently, interest rates for deposits are usually around two per cent, and thus purchasing property has become the preferred form of investment for wealthy Hong Kong residents and mainland Chinese alike. As prices continue to climb, eyes have started to turn elsewhere, and Thailand is a popular alternative location.

Speaking with the Bangkok Post, executive director for investment and project marketing at CB Richard Ellis said, “Bangkok is still a top-two destination for lifestyle in the eyes of investors in Hong Kong. Their interest in luxury Thai property is driven by a lift in optimism about the overall political and economic environment in Thailand.” Pace Development executive Sorapoj Techakrasri claimed interest picked up after the election, with investors optimistic about new proposed infrastructure projects, which could cause many developments to appreciate considerably in the near future.

After the enthusiastic response in Hong Kong, Pace will hold another roadshow in Singapore this weekend. It targets sales of 15-20 units at a value of about THB600 million (US$20.04 million) from both roadshows.

Mr. Sorapoj said smaller units were preferred by investors while larger ones were more suitable for buyers seeking a residence.

The super-luxury MahaNakhon mixed-use project will be worth THB19 billion (US$634.6 million) and will have 194 condominium units priced between THB225,000 (US$7,520) and THB345,000 (US$11,523) per sq m. The 77-storey building will be the tallest in Bangkok. It will also house a hotel, Bangkok Edition, operated by Ritz-Carlton and will have 27,000 sq m of retail space.

Mr. Sorapoj said luxury project units with a hotel brand were easier to resell.

Pace has sold 35% of the MahaNakhon units and expects the figure to increase to 40% after the two roadshows. It aims to have sold 45% of the units by the end of the year.

Speaking about the importance of confidence for investors, Managing Director of Jones Lang LaSalle Suphin Mechuchep said, “It is clear that confidence in Thailand’s real estate market relies a lot on the country’s political situation. The recovery of the real estate market, which has been slower than expected despite the strong economic growth witnessed in 2010, exemplifies the case.” Despite witnessing a tough market in recent years, Suphin is optimistic about the future, provided the current government creates some much needed stability. “With market fundamentals remaining strong, we expect real estate demand to grow rapidly.”

While the entire national economy has struggled in recent years, the slowdown has taken a heavy toll on the market for office space. With GDP growth of 4.8 per cent in 2007, 2.5 per cent in 2008, and a 2.2 per cent contraction of GDP in 2009, take up levels were around 55,000 sqm per annum on average. With an eight per cent growth in 2010, however, take up doubled, reaching 110,000 sqm, an impressive increase but still far below pre-conflict levels.

If the new government is able to avoid conflict, Suphin foresees the demand for office space in Bangkok returning to its pre-conflict highs. As Suphin puts it, “political stability will allow the Thai economy to grow faster, restore confidence and encourage expansions of both local and multinational companies. All these will translate into demand for offices.”

Markets that rely heavily on foreign buyers, such as Phuket, Pattaya, or certain parts of Bangkok, have been particularly hard hit by the political instability. While a rebounding global economy has helped matters some, most would-be buyers are taking a wait-and-see approach, and once again stability is the major key. Says Suphin of the currently lagging holiday/retirement property market: “We anticipate demand from foreign buyers in these markets to bounce back quickly once there is a clear sign of political stability.”

Whatever the market, foreigners, resort areas, office space, it always come back to stability. If it wishes to see true gains in the Thai economy in general and the property market in particular, Pheu Thai needs to achieve true reconciliation, and finally put an end to the political conflict that has crippled the Thai economy.

http://www.property-report.com/site/recovery-property-sector-stability-14676

The stock market has moved up to a two-month high. Here is a look at some likely stock market winners and losers under the new government.

WHICH FIRMS WILL WIN OR LOSE FROM WAGE RISES AND TAX CUTS?

Puea Thai promises a big rise in the minimum wage, which will raise operating costs for companies. But a reduction in corporate tax to 23 percent from 30 percent will cut costs.

Banks, which tend to pay high taxes and have better-paid staff, will benefit from big tax savings and may not have to pay that much more in wages. Top lender Bangkok Bank is expected to benefit most.

Labour-intensive industries such as food, hotels and electronics will suffer from higher wage costs. Exporters, which already enjoy tax privileges, may not benefit much from tax cuts.

Among affected companies are Thai Union Frozen Products , Charoen Pokphand Foods , hotelier Minor International , Hana Microelectromics , Star Microelectronic and Cal-Comp Electronics .

HOW WILL FUEL POLICY AFFECT PTT?

The new government plans to temporarily remove a levy on certain sorts of fuel for vehicles, allowing pump prices to fall, although it has no plans to close down the Oil Fund into which the levy goes.

The Oil Fund is used to subsidise other fuels but it is already running at a deficit.

Analysts say the new government may therefore increase pressure on top energy firm PTT Pcl not to increase retail prices for natural gas for vehicles (NGV). State-controlled PTT suffers losses in its NGV business and it wants the government to let its NGV prices reflect actual costs.

WHICH SECTORS WILL WIN FROM HIGHER CONSUMPTION?

Puea Thai plans easier access to credit, a jump in the minimum wage plus price subsidies that should spur consumption. This should boost the retail and property sectors.

Top convenience store chain CP All , whose shares hit a record high on Friday, retailer Big C Supercenter , wholesaler Siam Makro and building materials supplier Home Product Center should benefit.

Puea Thai promises zero-percent mortgages, exemption from transfer and mortgage fees and a 50 percent cut in business tax for first homes priced below 4 million baht ($130,000).

Property firms will benefit as the policies will both boost demand and cut costs. Top homebuilder Land & Houses is among top picks and its shares hit an eight-week high on Monday.

Developers that focus on medium- to low-priced homes such as LPN Development , Supalai , Pruksa Real Estate and MK Real Estate could benefit the most.

Stronger demand and populist spending in rural areas should boost house renovation, helping building material firms like Siam Cement and Siam City Cement .

Puea Thai is also expected to implement a policy of returning tax to first-time car buyers, which should stimulate demand and benefit car parts makers such as Somboon Advance Technology and AAPICO Hitech .

WHAT ABOUT INFRASTRUCTURE?

Spending on infrastructure projects should continue but some projects may be delayed by the change in government. Top contractor Italian-Thai Development could benefit most from spending, followed by Ch Karnchang .

But Sino-Thai Engineering and Construction may be hurt by the political change and its shares fell 5 percent on Monday. Chaowarat Charnveerakul, leader of Bhum Jai Thai Party, part of the outgoing coalition, is a founder of the company.

WHY IS THE TELECOMS SECTOR IN THE SPOTLIGHT?

Puea Thai wants to liberalise the telecoms industry, with a new regulatory framework and new licences for third-generation mobile and satellite services.

That would benefit top mobile firm Advanced Info Service Pcl (AIS) and satellite firm Thaicom , affiliates of Shin Corp Pcl , which was founded by de facto Puea Thai leader Thaksin Shinawatra, the brother of premier elect Yingluck.

Second-ranked Total Access Communication may also benefit although it has to face unrelated questions relating to whether its main shareholder, Norway’s Telenor , infringed Thai foreign ownership laws.

“With Puea Thai in power, the ICT (Information and Communications Technology) sector should boom again because they have experience in the industry. Its policy to give tablet PCs should stimulate development of content and related business,” said Watchai Vilailuck, CEO of Samart Corp .

Thaksin made his fortune in the telecoms sector with Shin Corp before his family sold a controlling stake in the company.

The outlook for True Corp seems less rosy. True is part of unlisted food conglomerate Charoen Pokphand Group, a big donor to the Democrat Party that led the outgoing government.

After the collapse of a tender for new 3G bandwidth amid regulatory wrangling last year, True signed a deal with state firm CAT Telecom that enabled it to be the first to launch nationwide 3G services.

That deal is being probed by state agencies.

The government is also investigating the operating concessions of AIS and Thaicom. Analysts say the risk of them having to pay higher fees or fines may be reduced with Puea Thai in power.

WHICH OTHER FIRMS ARE IN THE SPOTLIGHT FOR POLITICAL LINKS?

Shares in SC Asset Corp , the property arm of the Shinawatra family, hit a seven-year high on Monday.

Yingluck Shinawatra was SC’s president until being selected to head Puea Thai’s campaign.

“Phuket Governor Tri Augkaradacha is very serious about solving the problems with timeshare companies and he has ordered updates every 15 days on any progress made,” Vice Governor Somkiet Sangkaosutthirak told the task force panel at a meeting yesterday.

“Some government officials are involved in this, but we will not give up,” he added.

Phuket Provincial Employment Office chief Noppadol Ployudee said, “One business can make up to a billion baht and most of the money is sent abroad. A lot of money is involved in this and it seems as if they are mafia.”

He explained that some timeshare companies had requested and been granted permission to set up booths to market their products, but instead sent employees out on motorcycles to find customers.

“Their staff drive out and give lottery tickets to tourists. Later they tell the tourists that they won and ask them to go to their offices. Once there, other staff members try to sell timeshare products to them,” said Weerawit Kuresombut, President of the Entertainment Association in Patong.

“Timeshare problems like these have been damaging our tourism [industry] for the past five years. Timeshare companies can help tourism a lot if they follow the regulations, but companies that just cheat consumers affect tourism negatively instead,” Mr Weerawit added.

Patong Deputy Mayor Chairat Sukkaban said most complaints by tourists come through the Patong Municipality website.

Employees of illegal timeshare companies go to beaches and hand out forms – some even bearing the Tourism Authority of Thailand (TAT) logo – to tourists, who then provide personal information. Once those tourists return to their hotels, the timeshare companies call them continuously, he said.

“Their staff can generate customer networks numbering in the tens of thousands, with each customer paying up to 300,000 baht, some paying over a million.

“It is a lucrative business. In the high season they can make 10 million euros and one staff member can earn up to 100,000 baht [even] in the low season,” Mr Chairat said.

Buayan Suwanmanee, director of the Phuket Office of Tourism and Sports, said the problem of bogus logos was not restricted to Patong.

“One tourist complained that he got to the airport and a man gave him a form with the TAT logo on it, but he did not realize that it said ‘Tourism Association of Thailand’ rather than ‘Tourism Authority of Thailand’.

“When he got to his hotel, a man who spoke his native language kept calling him. He said that no businesses bothered him like this when he went to Chiang Mai,” Mr Buayan said.

The task force agreed that the first step in tackling the problems would be to start investigating all 142 legally registered timeshare operators on the island.

V/Gov Somkiet said that another meeting would be held soon to discuss how to move forward from there.

Before adjourning the meeting, V/Gov Somkiet joked that he would probably need to give committee members bulletproof vests.

http://www.phuketgazette.net/archives/articles/2011/article10560.html

The report makes a distinction between the inland area of Phuket which contains the vast majority of units and the coastal area with a lower number of properties and land plots but higher capital values. According to Patima Jeerapaet, Managing Director of Colliers, the coastal market is far more reliant on foreigners than the resorts of Pattaya and Hua Hin. “Most wealthy Thais prefer having second homes in the resorts close to Bangkok due to the easier access and therefore the coastal areas of the island tend to be more foreign focused and therefore prone to the global economic situation”, he said.

Although landed property dominates the residential market, especially inland, 2010 was one of the rare years when more condominium units were supplied. Around 1,020 units were supplied for 2010 while up to 200 units were supplied up to May in 2011. Most of the units are located inland and at present the Thai domestic market is acting as the main dynamo.

The high end coastal market has yet to return to the heady days prior to the Global Financial Crisis but the success of a number of projects points the way to a recovery. “In many ways the glass at present can be perceived as half full or half empty depending on whether you are comparing with the period around 2006-7 or the situation in 2009″, said Antony Picon, Associate Director of Research at Colliers. Mr Picon pointed to the recent success of Andara in Kamala as an example that Phuket still remains the top destination for luxury property. “High end buyers are coming from a wider range of countries, not just Europe, with Hong Kong, Russia and the Middle East becoming key markets now”, he pointed out. Developers are reconsidering their marketing strategies to suit the changes in buyer profile. “One development called Kamala Falls is being marketed as a halal investment, including a women-only swimming pool, in order to appeal to Muslim buyers”, he added.

In fact Kamala and the surrounding area on the North West coast is the up-and-coming location for high end development. Millionaire’s Mile contains plenty of land available for future development of luxury properties. An interesting prospect will be Phuket’s future as a marina for superyachts. Asia is fast becoming a cruising destination to rival The Caribbean and Mediterranean with less crowded waters in which to sail. “Wealthy Asians are now a strong buying force for superyachts and Phuket’s status as a renowned yachting destination through its marinas and exotic outlying islands could be enhanced through further development and boost the high end property market still further”, said Mr Patima.

In fact the whole area encompassing Phuket, Phang Nga and Krabi could evolve as the world’s premier yachting destination in the future with Phuket as the main hub. “The Phuket brand stands for luxury”, added Mr Patima.

One other important factor in Phuket’s favour is the growing number of international direct flights especially as result of the proliferation of Low Cost Carriers. Mr Picon believes this leads to greater numbers of tourists coming to Phuket which will eventually translate into property buyers. “The residential market in Phuket for foreigners has yet to return to the pre-Lehman days but it is well positioned when buyers from the traditional markets in Europe and the United States return to compliment to growth of the emerging markets”, he added.

They point out that the foreign buying segment is a significant part of Thailand’s property market and should be less restricted and failing to change will see buyers go elsewhere.

JFCCT is lobbying for the introduction of a 60 year registered lease term, double the current 30 years. But neighbouring countries have 99 year leases for foreign buyers.

The impact of an effective improvement in foreign ownership legislation on the construction industry, the real estate sector, and associated services would be significant, says CB Richard Ellis.

‘Properly handled, the contribution to the wider Thai Economy could be significant without any material risk to issues of sovereignty or adversely affecting social or economic conditions,’ the company says in a new report.

‘Most of the successful property markets in the region are either totally liberal, for example, Hong Kong, or have recently dramatically reduced restrictions on foreign ownership such as Singapore. Markets such as the UK, in actual fact favour the foreign owner over domestic buyers notably in respect of tax. In response to the global crisis, Singapore has liberalized its foreign ownership laws and launched for the first time landed villas at Sentosa which were targeted at new overseas investors and have been a resounding success,’ the report says.

CBRE believes that ‘sensible changes to current policy would have a dramatic and positive impact on Thailand’s economy. At a time of fragile global economic recovery, any incremental income that can be gained from international investment should not be lightly ignored’.

‘This would have considerable benefits as all current inbound investments are on a 100% cash basis. This would benefit residential developers, resort developers, construction contractors, and the Thai banking system. Sensible restrictions and controls could limit the level of debt and the banks could charge foreigners a premium over Thai borrowers, probably of one to two percentage points. Foreign investors would rush to take up onshore loan facilities should this be allowed. They would also, in our view, accept specific and tighter controls on repossession in the event of default.’

‘The ratio of no more than 49% foreign ownership in a registered condominium is set to prevent foreign control of landed property. If, however, in certain areas, for example, the resort markets, the ownership ratio were increased to match market demand, there would undoubtedly be a significant increase in foreign investment. Provided the condominium is managed by a Thai management entity and the rules and articles of association of a condominium prevent foreign owners acting in concert, there is little risk to fellow Thai condominium owners or to the local property market,’ it explains.

‘All in all, Thailand would see considerable gains in inbound investment. This could also be used to stimulate potential new resort areas, and Thailand’s policy to increase tourism revenue.’

It points out that it has seen an increase in buyers in neighbouring countries such as Cambodia. ‘These buyers are not entering the market because Cambodia is cheap. They are entering it because they have long term registered security of tenure on competitive quality property. In a world of global uncertainty, Thailand is likely to fair much better than many of its immediate neighbours and arguably several of the major global economies,’ it adds.

‘However, by simply adjusting the calibration of current foreign property ownership legislation with a view to improve inbound investment, there are major benefits to be made in real estate, construction, retail consumption, education, transportation, schooling, and tourism. It is Thailand’s choice whether it wants to reach out and take a share of this market.’

http://www.propertywire.com/news/asia/thailand-property-foreign-buyers-201106135271.htmlProbably the major change in terms of encouraging inbound foreign investment into the ownership of resort or investment property would be allowing Thai banks to lend to foreign purchasers against the security of Thai real estate, it explains.

He forecast the value of hotel investment transactions in 2011 would be higher than last year’s total of 5 billion baht, after no transactions in 2009.

In the first five months of 2011, transactions included the acquisition of Laguna Beach by CDL, and the 50-room, four-star Layana Resort on Koh Lanta by the Bangkok-based retail operator MBK from a private foreign investor.

The transactions in 2010 involved five properties: four in Phuket and one on Samui. In Phuket, Dusit International bought Dusit Laguna from Laguna, a private company bought the Novotel Beach from the SET-listed developer Natural Park, and Hotelcorp bought the Manathai Resort on Surin Beach from a foreign owner.

Another acquisition in Phuket involved Yamu, acquired by a joint venture between Como Hotels and Resorts and the owner of Alila Cha-am from a foreign investor.

“The reason why hotels in Phuket were acquired the most was that Phuket was very attractive for hotel investment for both seller and buyer, with a very good performance in occupancy rate,” said Mr McIntosh.

In the first quarter, average hotel occupancy in Phuket was 82.9%, up from 82.3% in the same period last year, the best performance in Thailand, he added.

The story was totally different on Samui as the market was very quiet and the only transaction was a financial consolidation. Baan Taling Ngam Resort, formerly owned by Lehman Brothers, was bought by the Srivikorn family. It will be operated by InterContinental starting late this year.

“Three- to four-star hotels are very attractive for investment as they generate more return with steady income,” he said, adding that in Thailand, initial rates of return averaged 9%.

Mr McIntosh said the last really big year for hotel investment in Thailand was in 2006. Activity was sluggish in 2008 as financial institutions were reluctant to lend after hotel occupancy dropped. Hotel investment everywhere was frozen until early 2010, when recovery was seen in most of Asia-Pacific.

The second half of 2010 was better than the first half. The most active market was Australia as bankrupt hotels were forced to sell by banks.

Big hotel buyers in Australia included the Government of Singapore Investment Corporation (GIC) and the Singapore-based private fund City Developments Limited (CDL). Also active was the Thai liquor tycoon Charoen Sirivadhanabhakdi.

In the first five months of 2011, Hong Kong was Asia’s best performer with 90% hotel occupancy, up from 85% in 2010, followed by Singapore with 86%, up from 85%.

“Hotels in Hong Kong and Singapore are very interesting due to high occupancy rates. Everyone wants to acquire one but no one wants to sell,” said Mr McIntosh, who is based in Singapore.

In Asia, Singaporeans were the biggest investors in hotel businesses, going to Japan, China, Australia, India and Thailand. They were by Hong Kong investors, in China and Thailand. Chinese investors went to Europe, Taiwanese mainly in China, while Thai investors sought properties in Australia and the US.

Mr McIntosh said that by next year there would be more hotels in Europe and North America being forced to sell as financial institutions complete reorganisation in 2012.

http://www.bangkokpost.com/business/economics/243029/hotel-transactions-reviving

Prices in Yaowarat, Silom and Phloenchit roads have all risen significantly, said a senior official of the bureau.

The Treasury department’s Property Valuation Bureau is updating valuation prices in almost 30 million plots across Thailand for new land-tax calculations.  These will serve as references from the start of 2012 until the end of 2015.

Updated prices for Yaowarat have risen by 35 per cent to THB700,000 (US$23,000) from THB450,000 (US$14,800) per square wah. In Silom the prices are up 16 per cent to THB700,000 (US$23,000) from THB600,000 (US$19.700), and Phloenchit prices have risen as much as 75 per cent to THB700,000 from THB400,000 (13,100) per square wah.

“We don’t have any updated prices in these areas as the state has no records of land sales,” said the official, who declined to be named. “But we have reference prices based on property developers offering such attractive prices, resulting in many deals.”

The official acknowledged that market rates in Phloenchit, where only a few prime plots remain, could be as high as one million baht (US$33,000) per square wah.

So far the land price survey has covered around 60 per cent of 29.3 million plots nationwide, including 1.9 million in the capital.

Valuation prices for plots in Greater Bangkok are expected to rise by more than 50 per cent from the old reference levels, driven by the extensions of mass-transit lines into more outlying areas.

http://www.property-report.com/site/bangkok-land-prices-taxes-to-rise-14140

Istana Phuket received top honours for all of Asia as Best Development (Multiple Units) Asia Pacific and Best Architecture Multiple Residence Asia Pacific. The project also won three Thailand-wide awards for Best Architecture Multiple Residence Thailand, Best Development Marketing Thailand, and Best Development (Multiple Units) Thailand.

Designed by Gary Fell, the Principal of GFAB Architects, Istana Phuket features 19 individually designed palatial residences offering sophisticated, timeless architecture based on intelligent bespoke design, ultimate quality and environmental harmony.

“While we are extremely happy to have won the award for the best overall residential development in all of Asia, the recognition for our architectural design is equally gratifying.” Richard Cohen, Sales Director of Istana Phuket. “We’ve always maintained that Gary Fell’s design approach to Istana Phuket is absolutely world-class.  This award now officially confirms our views about his amazing architecture.”

Istana Phuket is excited to be representing the Asian region, competing against other regional winners from Europe, Africa, the Americas and the Middle East for the ultimate ‘World’s Best’ award during a ceremony at London’s Savoy Hotel on December 12^th, 2011.

A record number of 21 different countries took part in the Asia Pacific Awards this year. New countries competing included Papua New Guinea, Tonga and Cambodia as part of the overall International Property Awards which was established 17 years ago.

Presented in association with Bloomberg Television and Google, the meticulous award process involves a judging panel of over 50 experts chaired by Lord Bates of Langbaurgh and covers every aspect of the property business such as development, architecture, interior design and agency.