Nominations can be made by anyone – industry and the public. The only rule is that people cannot nominate the company they work for or own. Nominating a company does not mean that company will win an award, and nominating the same company many times does not mean they have a better chance to win. A single nomination for a company is enough, and that will mean the company will then go through to the entry stage…. if of course they are eligible.

Who is eligible?
The eligibility rules are important. You can find them at http://www.thailandpropertyawards.com/eligibility.html.  They give the parameters for which businesses/developments can enter which categories. “The eligibility rules are made clear to ensure all is transparent. These criteria will be strictly followed and applied by BDO Richfield Advisory Limited who will be supervising the awards and judging process again this year,” said Duncan Worthington, Managing Director of Ensign Media the organisers of the Thailand Property Awards.

The full list of award categories is at http://www.thailandpropertyawards.com/categories.html. Two new categories have been added this year: Best Villa Development Thailand, and Best Condo Development Thailand. These nationwide categories are distinctly different from the regional categories for Bangkok, Phuket, Pattaya, Samui and Hua Hin. The regional categories are open to developments under-construction, whereas the the two nationwide categories are open only to completed developments.

“This differentiation recognises the success of developments that have been completed while also recognising the innovation of newer developments currently under-construction,” added Worthington.

The award winners will be announced at a gala dinner on 7th November, at the Grand Hyatt Erawan Hotel in Bangkok. The evening will start with a wine reception followed by a 4-course dinner and awards presentation. Last year the gala dinner was fully booked and some had to be turned away, so please book early to avoid disappointment. Bookings can be made now and are on a first-come-first-served basis.

“In addition to changes to the awards and eligibility criteria, we are planning to organise a seminar series during the day on 7th November. This will be open to all irrespective of whether you are attending the gala dinner or not. And in co-operation with the Lighthouse Club of Bangkok we plan to host a golf challenge on the 8th November, following the awards,” commented Worthington.

“Our long-term aim is for the awards to become part of an annual industry gathering with networking opportunities, business opportunities and more,” concluded Worthington. Sponsors of the 2009 Thailand Property Awards include Gaggenau as a Co-Sponsor. Media Partners include i-Marketing, Luxury Properties magazine, Phuket Post newspaper, Property Report magazines, and REIDIN.com, with RICS Thailand as a supporting association. The judging is supervised by BDO Richfield Advisory Limited and the awards are organised by Ensign Media Co. Ltd.

www.thailandpropertyawards.com.

Exotic Properties, the owners of Exotiq Real Estate, South East Asia’s largest resort focused property agent and Life Solutions, the Hua Hin based kitchen and interior supply company, have recently unveiled a new joint venture under the branding ‘Exotiq Living’.

Exotiq Living aims to establish a chain of furnishing and interior design retail shops across South East Asia, with the first store to open in January in Hua Hin.

“We aim to cater for the mid to upper markets by providing an affordable range of spectacular furniture from across Asia,” explained Gregory Love, Managing Director of Life Solutions. “Many of the items for sale will be sourced from the best manufacturers in the region but we will also develop an exclusive range of ‘Exotiq’ branded items, which you will only be able to find at Exotiq Living.”

Exotiq Living plans to grow through franchising and corporate operations. Other Thai destinations, such as Phuket and Koh Samui are already in the pipeline for next year but it is likely to be in Bali, Indonesia, where the second store will open. The target is to have 10 resort located stores by 2011.

“Exotiq Living is another step in the lateral development of the ‘Exotiq’ brand in Asia,” commented Angus MacLachlan, CEO of Exotic Properties at the signing ceremony in Hua Hin. “Our goal is to establish ‘Exotiq’ as THE brand that helps people to establish new lifestyles in paradise. We focused first on building our network of Exotiq Real Estate offices but we have always believed that there is a significant value chain for our clients if we can connect our Exotiq brand through property, travel, publishing and retailing businesses. Exotiq Living provides a major link in this strategic chain.”

In addition to the resort locations where consumers are already familiar with the Exotiq brand, Exotiq Living has big plans to develop major city centre stores in capitals such as Singapore, Hong Kong and Tokyo. “It’s not just the people who live close to a tropical beach who can enjoy an exotic way of life,” said Love. “Many city dwellers, inspired on their holidays, look to furnish and decorate their city apartment or house in the same style as a Bali or Phuket villa.”

Aside from continued aggressive investment by Middle Eastern funds, some cash-rich Thai listed and private-equity companies remain the key players in the Phuket market.

“The nature of private equity is that you need to place funds, you can’t keep the money in the bank,” said Mr Barnett.

However, these investments are really large-scale with sovereign wealth funds not looking at anything under $20 million because it would not have economies of scale, he noted.

While these funds are interested in hotels, Mr Barnett said they were also very keen on mixed-used developments because these match their investment horizon of five to six years and help them obtain some liquidity earlier on.

Hotel investments are a longer play because typically it would take two years to build the structure and another three to operate before a good forward outlook can be worked out. A hotel owner has to show excellent forward projection based on a good three-year pattern of earnings in order to attract a buyer.

“Basically when you sell a hotel you are not selling on what you term as replacement value but you are looking at cash flow forecast, you are looking at may be a projection of 10 years and selling at a discounted cash flow.”

Today’s developers of mixed-use projects are not small players who rely on presales income to fund construction. For this reason investors are able to realise yields from the real estate portion of the development earlier on, although income from the hotel side takes longer to flow in.

“They don’t have to take on as much debt to equity,” explains Mr Barnett. “Normally you are seeing that gearing on a lot of hotels is one to one - for every dollar they invest they are taking another dollar in debt, so it’s balanced, 50% debt, 50% equity.”

He also explained that pricing in a mixed-used development differs from the usual residential project. In the case of the latter, if it is a condominium in Bangkok, there is comparable pricing per square metre for grade A or grade B buildings. But with in a mixed-used estate the per square metre proposition is yield-based, so one could be paying more for a smaller space that generates higher income. There are other add-ons including usage with the owner generally entitled to use the residence for around 60 days a year.

“If I get 60 days at the Banyan Tree, there is a certain value attached. If I’m going to stay at the Banyan Tree per night it might cost me $1,000 in a double-pool villa; consequently 60 days is $60,000.”

Ultimately, however, people do tend to take a longer view and aside from ongoing yield they do want to see capital appreciation.

Big-name mixed-used developments in Phuket include Shangri-La Phuket Resort & Spa, Jumeirah Phuket Private Island Resort, Banyan Tree, Dusit Laguna Villas, The Yamu and the upcoming Taj Exotica on Koh Lone.

Mr Barnett sees the Phuket property market to be in a state of hangover since the coup took place in September 2006, and while some people are saying this market is now shrinking, in fact it could well be that supply is outstripping demand.

Total transaction values are still very high although it is very difficult to track this market because so much is sold on a leasehold basis or to offshore companies.

“So tracking Land Department transactions is not always accurate. But in terms of market trend we believe that the velocity is still consistent with the past but supply has grown.”

This mushrooming supply has led to the number of projects on the island exceeding 400 today On Patong beach alone there are estimated to be 1,500 condominium units.

Mr Barnett has observed an interesting trend in that the market seems to be splitting off in two directions. Aside from the ultra-luxurious projects mainly comprising sea-view villas that may cost anything from 60 million to 100 million baht each, there are condominiums in Patong that are priced just 2-6 million baht for studio to one-bedroom units, mainly developed by Thais.

“We are seeing a number of new projects [in Patong] where the majority of the buyers are Thai, we have also seen people buying multiple units on speculation very similar to Bangkok. In the past the majority of the market was dominated by foreigners.”

The danger of the emergence of speculative buyers is that if there are too many of them, they may not be able to meet their mortgage payments should the market flatten out. Even so, Mr Barnett expects investors at both ends of the market to be able to generate income because an increasing number of visitors now opt to stay in non-traditional accommodations. This trend is clear on Samui where the number of tourist arrivals actually outstrips hotel occupancy rates.

“There is value in the market so we think it’s going to be a big trend. If you go somewhere like Hawaii, you know condominium hotels dominate the accommodation market. We think that in future, certainly in Phuket, we’re going to see a lot more of this type of product being rented out and going into the accommodation supply.”

With the global financial markets in such disarray, lending seizing up between banks and institutions and general fear and greed permeating the market, there seems little reason to be optimistic. Last night was fine example when we saw that the US$700 Bln bailout package had been rejected in the House of Congress. In the few moments after the Speaker´s gavel sounded, it really did seem like time had stopped. The Dow shed over 700 points falling at frightening speed like a Universal Studio roller coaster, stunning members of congress. The Dow Jones closed down by a whopping 7%.

So, when is the best time to buy real estate? Now? Funny you should mention it. Naturally as property agents we are biased but at this time we have even more of a reason to say “now”. Furthermore,  this is being reinforced by what some of Customers have said to us as well. There may be some method in this time of financial madness.

The safe haven for those with cash is clearly not in the equity markets - just yet. No-one wants to catch a falling knife. Remarkably there is even some degree of caution being voiced about leaving large amounts of cash with a single bank and under low interest rates. Not many understand the complexity of other investment vehicles and most want to invest and leave it over time and not have to watch it every five minutes. More than a few people have come to us and commented that they may be better off at this time by investing in property.

Sometimes, the simple ideas are the best. “What´s the use of cash to me?” commented one client. “I am much better off in property and at least I know it´s there and can´t disappear”.

Well that is one way to look at it. Then look a bit deeper and you will find that property in Thailand, principally in the resort markets such as Samui and Phuket are mostly not financed through mortgages or secured loans. Given the nature of the market, it is a cash purchase. No loans means no bubble and far less defaults on any property that is financed.

The only contributor to price shifts are the fundamental market movement of supply and demand. In other words, there is a degree of stability in resort market property in Thailand as there is less debt. It has survived economic crisis, tsunami´s and SARS. The great majority of property has been purchased by cash as the local banks do not lend lightly to foreigners. Thailand banks have been conservative lenders, spending time since the last financial crisis to clean up the balance sheets and avoid risk. Non are exposed to sub-prime.

Transactions may be down as the middle market has been hard by foreign executives concerned with job security and saving for a raining day but there is a segment of astute and savvy  investors with cash and they would prefer to employ this in the property sector rather than equities or idly in the bank.

Now for another one of Phuket´s or Samui´s best kept investment secrets. Not only are the markets relatively stable but there are opportunities to purchase properties with a guaranteed yield.

Not only is the market not exposed to the same pressures as caused by the sub-prime debacle but there are superb investment properties available with guaranteed yields of up to 8% for periods of up to 5 years. If you are not looking at the yield, then look at the effective discount this brings to the purchase price of the property.

With some Asian markets off of their peaks by 40%, a drop in the Dow of 7% in a single day and interest rates at less than 2%, a property investment with a guaranteed return of up to 8% begins to sound attractive. And you can use it for your family holidays as well.

This is perhaps the time when resort marketing will come into its own and the property market which has been sidelined by ongoing political factors may now seem more attractive to investors looking for guaranteed yields, a higher degree of price stability and a place in the sun in which to escape and relax with the family.

Martin Phillips is the Managing Partner of Engel & Volkers (Thailand) Ltd

Thailand will not be spared from the seismic waves moving across the world from Wall Street but the impact will only be felt six months from now, says Opas Sripayak, managing director of L.P.N. Development Plc.

While the country should brace itself for reverberations, the impact is expected to be less severe than from the Asian financial crisis of 1997 that began in Thailand.

“There are many parties helping shoulder this crisis so that [the financial system] doesn’t suddenly crack up, and businesses are also being careful. This should lead to the situation not being as bad as in 1997,” Mr Opas said.

He noted that conditions in 1997 were so severe locally that liquidity dried up completely. With no money in the system to keep companies afloat, executives scrambled to get what cash they could, accepting write-downs of 50% or more if need be.

Real estate in Thailand today is in substantially better shape. It can still generate rental income or could be pooled into a property fund.

As L.P.N. is among the companies that survived 1997 and has since emerged as the budget condo market leader, it knows from experience that if a company has liquidity it can withstand a crisis. Companies lacking liquidity can fail even if their sales figures are good.

“I remember in 1997 there were many buildings close to completion. They required only a little more cash but they couldn’t be completed because there wasn’t any,” Mr Opas recalls.

One clear short-term effect of the US financial turmoil is that Thai banks are highly likely to be more cautions about lending to small borrowers, including homeowners. L.P.N. itself has seen mortgage rejection rates rise among its customers.

“[The rejection rate] should edge up because banks are screening more carefully now. I asked banks after the sub-prime crisis erupted whether they had changed their policy but they said there weren’t any changes. Actually, I am sure that is not the way it is.”

Mindful of the lessons learned from 1997, L.P.N. adopted a conservative stance as soon as the sub-prime mess started shaking the US financial system.

“I want to tell investors and shareholders that lately there have been many factors that don’t look good for L.P.N., but L.P.N. is a company that experienced the 1997 crash,” says Mr Opas. “Over the past 10 years we have conducted business with risk in mind; we weigh the risk factors all the time and try to grow at a suitable pace. Sometimes our experience shows that we should slow down and we do so even though others could still be aggressive. This has led to people wondering whether L.P.N. has any internal problems.

“L.P.N. is not facing any internal problems. Sales are good, liquidity is still good, it’s only that we see signs of problems that have built up over the past three to six months and so we have become more careful.”

So far this year L.P.N. has obtained 4.7 million baht from condominium unit transfers. It has sold but has yet to transfer 1.8 million baht worth of units, leaving the company only 700 million short of this year’s target of 7.2 billion baht.

For 2009, L.P.N. has sold and is transferring 6.5 billion baht worth of units or 75% of its target of 8.6 billion.

For 2010, part of the revenue stream will come from the Lumpini Place Rama IX-Ratchada project, where nearly 1.9 billion baht worth of units in phase one have already been sold. At the end of this year the company will launch the second phase, with total revenue of the two phases estimated at 5.2 billion baht. This would be approximately half of the 10.3 billion baht in revenue realisation it forecasts in 2010.

While some observers fear that the ultra-luxurious condominium market is likely to suffer the most in the current climate, Mr Opas believes the very wealthy remain relatively immune.

“The group that will be strongly affected is the middle to high segment. Those who need housing will continue to feel this need but whereas last year they could buy at 70,000 baht per square metre, they now have to drop their budget to 60,000 or 50,000 baht because a lot of things are more expensive now.

“The lower segment won’t be much affected because they are already careful with money and they have fixed expenses for accommodation. If they are not renting they are paying installments.”

Mr Opas does not expect foreign property developers and buyers who live in Thailand to back out of their investments because the former have found their investments in developing real estate in Phuket worthwhile. However, foreign newcomers would think hard about making such investments in light of both Thailand’s lingering internal problems and the tumultuous external situation.

While Mr Opas has not heard of any local property companies reaching the point of bankruptcy, he has heard of contractors doing so. One large contractor ran into problems because steel prices rose sharply just as it was trying to resolve the problem. Had the company been able to hang on for a little longer, it would have seen the price eventually go down.

Steel is a large component in the cost of developing a condominium and in L.P.N.’s case it is as much as 10%. This also means that a 1% rise in the price of steel would cost the company an additional 10 million baht on a billion-baht building.

Patong Harbour View Apartments will release six additional pool-side units at the start of October.

Patong Harbor View Company (a Phuket Real Estate Development Company) owner Scott Riefler said the studio units were a cheaper alternative to the larger two-bedroom units on the site at Patong Beach.

“Adding these six pool side studio units will allow customers who couldn’t afford to buy the two bedroom units a nice pool side 50 square metre unit at a fraction of the larger unit price. This should be very attractive to singles and couples without large families,” he said.

“This has been a very exciting year for us with our new access road purchase and now adding six studio units to our project. Our new access road will allow our customers to go to Patong Beach, the town or Jungceylon mall within minutes from leaving our project door.”

Patong Harbor View incorporates the traditional and new Thai designs into a modern condominium development. Facilities include a gym, pool, 24-hour shop, and in-house spa.

“The 2008 entries are both numerous and very competitive,” says Duncan Worthington, Managing Director of organisers Ensign Media Co. Ltd.

All entries received were submitted to and audited by BDO Richfield Advisory, and have now been sent to the team of judges for the next stage in the rigorous Thailand Property Awards system. A team of twenty plus judges from around Thailand, including real estate professionals, legal experts, designers and architects, have the tough job of assessing the entries and allocating points against specific criteria.

“This is indeed a tough job. With the number of entries up on last year, the judges have a big task ahead of them. Due to the differing characteristics of the markets in Thailand (Bangkok, Pattaya, Phuket, Samui and Hua Hin), it´s important we have a representative group of judges from all over the country. A central judging panel, we feel, isn´t the fairest way to assess developments and businesses from around the country where there are such variances between local markets,” said Worthington. “I would like to say a big thank you to all those who were involved in judging this year and I look forward to finding out the results in due course.”

All judges will submit their scores direct to BDO Richfield who are supervising the 2008 Thailand Property Awards. BDO will collate the scores and calculate the winners. However, upto the top 5 in each of the development categories (Best Villa Development, Best Condominium Development and Green Development) will undergo a site inspection by a local team of judges before the final winner can be decided.

“The site inspections are something new for 2008. This is something we have wanted to do from the beginning, but it takes a lot of planning. A team of local judges in each of the markets (Bangkok, Pattaya, Phuket, Samui and Hua Hin) will visit the site of the development, inspect the site and a show/completed unit, and meet the executives. This will allow a more detailed assessment of the developments, after which the team together decides upon the winner and submits to BDO Richfield,” Worthington commented.

With such a thorough and detailed judging system, the Thailand Property Awards aims to ensure all entrants have an equal chance of winning, and that the winners can truly be proud of their achievement, having been voted by their peers.

Gala Dinner
The gala dinner and awards presentation will take place Saturday 1st November at the second floor ballroom in the Conrad Hotel, Bangkok. Tickets are now available at 30,000THB for a table of 10, or 3,000THB per person. Over 20 tables have already been reserved, so to avoid disappointment contact Khun Kanitta on events@ensign-media.com or call 0 7626 4756 ext. 18 to reserve your seats soonest.

For more details on the awards system and the gala dinner, visit the website at www.thailandpropertyawards.com.

Despite the closure of Phuket International Airport for two days, real estate professionals on the island claim their business is unlikely to be affected because foreign buyers understand Thailand’s political situation.

Martin Phillips, based in Phuket as managing director of the upmarket residential brokerage Engel & Volkers (Thailand) Co, said no clients had postponed purchases despite the situation being international front-page news.

He noted Thailand was not alone in facing political issues and that these situations often happened in Europe.

”This is not unusual and these are usually short-term disruptions, much the same as the temporary closure of Phuket,” he said.

Aliwassa Pathnadabutr, managing director of the international property agency CB Richard Ellis Thailand, had a similar view.

”We do not think the political situation will affect property purchases in Phuket as most buyers in Phuket are foreigners who are familiar with Phuket and understand Thailand quite well. We believe the demand for Phuket properties will not drop due to this,” she said.

But Mr Phillips added that ongoing political uncertainty in Thailand was not helpful to business generally or to the resort property market, which would benefit from an environment more conducive to investor confidence.

”While this is a domestic issue, and has so far remained quite peaceful, it unfortunately will not be viewed positively across many sectors, not just resort property,” he said.

Patima Jeerapaet, managing director of the consulting firm Colliers International Thailand, said Thailand needed to correct the country’s image immediately to reassure foreigners about the hospitality Thai people usually offer to foreign visitors.

He said foreign investors were still confident about the fundamentals of the Thai economy, which were much better than those of its neighbours like Vietnam, Cambodia and Burma.

He admitted that some foreign investors might delay purchases, but said investors who understand the theory of high-risk, high-return were still looking to invest in Thailand.

Political instability in Thailand and a global economic slow-down have failed to curb Phuket’s booming property industry, according to a report in The Nation newspaper.

Quoting sources from several top real estate agencies, the report claims that Phuket’s strong tourism market is providing the boost needed to counter a slowing national economy.

Phuket remains an attractive retirement destination and every year more and more retirees are looking to Phuket.  The growing number of tourists that choose to make Phuket their second or third home has also spurred the exponential growth of the property industry on the island.

According to a report from Colliers International Thailand, based on the company’s market research the number of residential units for sale in Phuket, which recorded a peak in 2006 with 1,473 units for sale, dipped last year, showing a 44 percent decrease. This year, however, the figures have rebounded and show a healthy growth.

The majority of property investors in Phuket are said to be expatriates based in Asia, particularly Hong Kong and Singapore. With real estate in these cities being highly priced,  more attractive prices and environment are big draws for investors from these business hubs, either looking for holiday homes, investments with a rental return or looking longer-term to a future retirement home.

Phuket is also becoming popular with property purchasers from many new markets, such as Russia, South Korea, the Middle East and India. These buyers tend to be more investment-orientated, says the Colliers report, and are looking for potential capital appreciation and possibly rental income.

High quality construction and reputable hotel brands branching into time-share units have also raised the profile of the island and are becoming central to the high prices now being commanded.

The Colliers International Thailand study further claims that the eastern coast of Phuket is emerging as the future destination for high-end developments in Phuket, with the three marinas (and one more close to operational), traditional magnets for residential projects, all located along this coastline. The selling price per square metre in some projects on the eastern coast is higher than that on the western coast, although the land price per rai in the western areas is higher on average.

CB Richard Ellis Thailand also predicts a strong growth for the high-end market, particularly after the imminent upgrade of the Phuket International Airport, which aims at almost doubling the facility’s capacity by 2010.