Dep Minister of Finance Pradit Phataraprasit to lead an Open Forum on Wed 10th Feb to solicit direct input from private sector on how government can help them operate more competitively in the region
Deputy Minister of Finance Pradit Phataraprasit, today, (Wednesday 3 February) announced that the government is formulating plans to boost tax and non-tax benefits to companies that locate their regional operating headquarters in Thailand.
“We aim to reinforce Thailand’s position in the region as an important manufacturing and services hub,” said Deputy Finance Minister Pradit who chairs a committee charged with developing a set of recommendations that can make Thailand a more attractive location for the regional operating headquarters of companies.
He said, “The establishment of a regional headquarters in Thailand by giant foreign companies can generate enormous benefits for our country and accelerate economic growth. It results in the location in Thailand of many high-salaried expatriate managers; it means more demand for housing, more shopping and other spending, and more business for hotels and restaurants with a greater number of international events being organized in Thailand. It also means that Thai staff have more opportunity to become regional managers with much higher salaries and responsibilities.”
Mr. Pradit said that he is organizing an Open Forum meeting on Wednesday 10th February at the Queen Sirikit National Convention Center for the private sector to give direct input to him on how they believe Thailand could become more attractive as a regional operating headquarters for their companies.
“I want this to be a collaborative effort that gets the best ideas on the table, and to weed out what isn’t important to the private sector,” said Mr. Pradit.
He said that, “multiple government agencies are working together and all key people responsible for developing and submitting these recommendations for Cabinet approval will be present at the session to listen to the views of the private sector, including the Board of Investment, the Bank of Thailand, the Revenue Department, the Fiscal Policy Office, as well as the Federation of Thai Industries, and the Thai Chamber of Commerce, in addition to himself and the Permanent Secretary of the Ministry of Finance.”
HOW TO REGISTER TO ATTEND
Attendance is free. To book a place, please email or fax representatives’ Name, Title, and Company to ROHforum@gmail.com , or fax: 02-664 9515, Attention: Khun Pairoj. Reservations should be made no later than Monday 8th February. Seating is limited and available on a first come, first served basis. Presentations will be in English and Thai.
Sunday, February 7, 2010
Saturday, January 30, 2010
THE THAI PROPERTY MARKET TRENDS IN 2010
2009 was a challenging year for the Thai property market, but CB Richard Ellis (CBRE) sees positive signs for 2010. Whilst 2009 has been a tough year, it was not as bad as many expected.
2010 has begun with a more positive market sentiment. The improving economic outlook globally and perception of Thailand’s political situation, together with low market prices compared to other mature property markets, have had a positive impact on consumer confidence in property investment in Thailand.
Following the economic crisis, the supply of new office, retail and industrial space is at an all-time low. These sectors are expected to improve this year, in line with the global and local economic recovery.
Thailand’s residential market in 2009 was primarily driven by local demand. This year, CBRE believes that local demand will continue to be strong and that individual foreign property investors will start to return to the market. Thai condominium prices remain attractive compared to other cities in the region, such as Shanghai, Hong Kong and Singapore where prices have risen sharply in the last six months.
Average Price of Luxury Residential Units in the Region (THB per sq.m.)
City 2008 2009 %Change
y-o-y
Shanghai THB 176,032 THB 189,659 7.7
Hong Kong THB 622,549 THB 722,376 16.3
Singapore THB 479,327 THB 555,481 12.8
Bangkok THB 117,875 THB 124,539 5.6
Source: CBRE Research
However, there are continuing concerns about Thailand’s political stability and the strength of the global economy. If Thailand’s economy and politics are stable in 2010, the residential sector will see consistent positive growth.
Government Policy
The Government stimulus package will expire in March 2010 and it remains uncertain whether it will be extended. CBRE believes the extension of this package will benefit buyers and developers of large condominium projects launched during the crisis which are due for completion and transfer within this year.
The initiative of this government to reform property and land taxation with a view to creating fairness sounds positive, but it will only be possible to determine the effect on the property market once the details of the proposed legislation have been finalised. “So long as the new tax legislation is on a fair basis and the tax rate not so excessively high as to discourage investment, CBRE sees this reform as beneficial for the market,“ Ms. Aliwassa Pathnadabutr, Managing Director of CBRE Thailand said. An additional measure that CBRE urges the government to consider is the extension of the long lease term from the current 30 years up to a maximum of 90 years. This will help improve the market mechanism and make large-scale commercial projects viable which would not be feasible if such developments were freehold due to the high land cost or if they were on a 30-year lease due to the limits on lease terms. The extension of the lease term will also have a direct benefit for resort destinations such as Phuket and Samui where the property markets are primarily driven by foreign demand.
Looking at 2010 and beyond, environmental issues are a key consideration for all industries including the property market. There will be more restrictions which may increase the cost for developers. The Environmental Impact Assessment (EIA) process is one of the key concerns and risks for developers as there are uncertainties in the details and timing required to obtain such a permit. This is one of the factors which are likely to delay the emergence of new supply.
Any additional incentives that would attract foreign direct investment in both manufacturing and the service industries would be welcomed, in order to enable Thailand to compete with rival destinations.
Office : The Market Should Improve in 2010
Bright future due to limited new supply
In 2010, there will be very limited new supply in the office sector. Only 78,380 sq.m. are due to be completed, including Sathorn Square (72,500 sq.m.) and Sivatel Wireless Road (5,880 sq.m.). CBRE sees the limited increase in new supply as a positive indicator for the office market because any increase in take-up will reduce vacancy rates and lead to rental increases. At the end of 2009 the vacancy rate stood at 12%.
Even though net demand in 2009 dropped by more than 50 % to only 52,000 sq.m., average grade A CBD office rents fell by 7.26% to THB 690 per sq.m while grade B CBD office rents fell by 12% to THB 509 per sq.m. This is considerably better than in other markets. Rents fell by 52.6% in Singapore and 49.9% in Hong Kong in 2009.
Average Grade A CBD Office Rents in the Region (THB per sq.m.)
City 2008 2009 % Change
Y-o-Y
Hong Kong THB 4,107 THB 2,255 -49.09%
Singapore THB 4,041 THB 1,913 -52.66%
Bangkok THB 744 THB 690 -7.26%
Source: CBRE Research
Following the recovery of the global economic, CBRE believes that companies will be less cost conscious and that 2010 will be a good time to take advantage of the low rents to relocate to newer buildings.
Sathorn Square – the only new grade A office building to be completed in 2010.
Condominium : The Most Exciting and the Most Competitive
Supply Outlook : More competitive market in 2010
The total supply of downtown condominiums increased to 61,522 units by the end of Q3 2009, up 14% year-on-year. In total, there are 17,664 units under construction in downtown Bangkok, of which 78% of which have been reportedly sold, leaving 3,879 units being marketed (completed and under construction).
In 2009, there were 3,912 units in 15 projects launched in the downtown area, with the majority being one-bedroom unit types. In 2010 CBRE expects a much more competitive market, with an increasing number of project launches as there is pent-up supply from developers who have delayed their projects since the onset of the economic crisis in late 2008 and also new supply from large developers who acquire plots of land for new developments.
Newly Launched Condominium Projects* Broken Down by Unit Type
Year Studio 1 B/R 2 B/R 3 B/R 4 B/R PH Total
2008 243 2,270 1,090 194 19 10 3,826
2009 54 1,284 694 10 0 0 2,042
Total 297 3,554 1,784 204 19 10 5,868
Source: CBRE Research
* Include 18 selected projects in 2008 and 11 selected projects in 2009 as of Q3 2009.
Demand Outlook : Demand continues to be strong
CBRE sees a growing demand for condominiums driven primarily by a change in lifestyle which has led to the need to own a first or second home in the CBD or near mass transit routes to reduce the need to commute. From an investment perspective, investors also increasingly recognise condominium purchases as an appreciating long-term investment asset. In the past, there were few Thai investors in the market. However, with lower interest rates and proven returns, investing in condominiums has become a popular investment choice for many Thais. It is also considered a safe and secure investment compared to the equities market which is much more volatile.
New Trends : Good locations, small furnished units with affordable prices
From the development side, developers need to ensure they are ahead of the game in trying to predict future location trends. The danger is that a popular location can quickly become saturated with new supply. The key to success is either to be the first to launch in an upcoming location, or to find a location with high barriers to entry.
New supply especially for the middle income market will focus on smaller units at affordable prices. In a competitive market with experienced buyers, products must offer quality as well as innovative and functional design in order to be successful. The reliability and reputation of the developer is another key consideration for buyers.
Luxury and Super Luxury Segments : Limited future supply
The luxury and super luxury condominium segment is expected to slowly recover and develop into a niche market. Prime downtown land is rarely available for sale and prices will remain high, CBRE, therefore, does not expect many new launches for luxury condominiums in prime downtown locations.
With a wave of new launches focusing on smaller one-bedroom units along mass transit routes with prices ranging from THB 3 to 8 million, the majority of unsold two to three-bedroom units priced at over THB 15 million and developed before the crisis should soon be absorbed. There will then be a shortage of two-bedroom units in the luxury market especially in prime locations. Short-term investors will speculate on one-bedroom units whereas long-term investors will focus on two and three bedroom units which are in demand among expatriates in the rental market, while smaller units are driven by local demand. With a limited supply of newly launched larger units CBRE believes the existing supply of such grade-A units in prime locations will continue to appreciate in value.
2010 Pricing Trends : Completed prime condo prices on the rise
In terms of price movement, CBRE sees no significant increase in prices per sq.m for mid-market condominiums as the economic recovery is still underway with the prevailing political problems which continue to concern buyers. The best selling segment is priced at THB 50,000 – 80,000 per sq.m in mid-town locations or within 15 kilometres of the CBD. Prices in this segment are unlikely to increase as the purchasing power of the target market is limited. The developers have to compete on cost control and pricing.
Prices for completed high-end and luxury downtown condominium have increased slightly by 5.6% from THB 117,875 per sq.m from Q4 2008 to THB 124,539 per sq.m in Q3 2009 and CBRE believes that the prices of completed buildings in prime locations will continue to rise in 2010.
Prices of the future supply of high-end and luxury downtown condominium in 2009 fell slightly by 6.3% from THB 142,133 per sq.m in Q4 2008 to THB 133,134 per sq.m in Q3, 2009 due to the slow market conditions. New launches in 2010 are likely to see an increase in price per sq.m due to the higher construction costs but, as unit sizes are smaller, total unit prices will be on par with current levels.
Retail : More Focus
Improvement expected following return of consumer confidence
In the first three quarters of 2009, the supply of retail space grew by 6.6% or 327,125 sq.m. Whilst occupancy was stable throughout the year, rents were flat and even fell in some cases during the earlier part of 2009. The fourth quarter showed signs of consumer confidence and spending returning.
The trend for new retail centres in Bangkok is evolving from one-stop mega shopping complexes to more focused community malls and medium-sized lifestyle and entertainment complexes such as Esplanade Rattanathibet.
The major players in the retail market are Central, The Mall, Siam Future and Major Cineplex. Retail developments to note this year are Terminal 21 which is currently under construction and located in Sukhumvit at the Asoke junction, Central Rama 9 and Mega Bangna which will house Thailand’s first IKEA store.
Serviced Apartments : Highly Competitive
Occupancy rates are likely to be flat and downward pressure on rents
The serviced apartment sector, which partially depends on tourists and business travellers as well as expatriates working in Bangkok, has suffered from growing supply which led to an overall drop in occupancy and rates in 2009.
Total supply increased to 12,392 units, up by 6.84% year-on-year, with a further 610 units expected to be completed by 2010 and approximately 2,000 units by 2013. Occupancy rates remained at 75% in Q3 2009. Occupancy was partly protected by a number of long-term contracts which are less volatile than the daily rate market. Average rates, however, fell by about 20% year-on-year.
The biggest challenge faced by this sector is the volume of new supply targeting both long-stay expatriates and short-stay businessmen and tourists.
Serviced apartments compete against apartments and particularly small condominium units for rent in the long-stay market and the rapidly growing supply of hotels in the short-stay market. The influx of new supply of both serviced apartments and hotels will continue to exert a downward pressure on both rates and occupancy.
Expatriate Rental Apartments
The total supply of expatriate-standard rental apartments in Bangkok increased to around 11,151 units, up by 4.5% year-on-year
Occupancy remained high at 91%. CBRE has not seen a dramatic drop in the number of expatriates in 2009 but, since companies are trying to maintain or reduce costs, so CBRE does not expect any increase in housing allowances.
Multinational companies continue to be cautious on their expansion plans given that the global economy is yet to fully recover. Thailand’s political problems are also an added factor which has restrained business expansion plans in Thailand.
CBRE does not expect that there will be a significant increase in the number of expatriates in 2010. There will be increased competition from individual “buy-to-rent” condominium owners seeking to lease out units in recently completed developments. There are about 620 apartment units under construction but there are also 17,664 condominium units under construction and CBRE expects that up to 50% of the new condominiums have been bought by purchasers who want to lease out their units on completion. This increase in supply combined with little or no growth in demand will dampen any potential for overall rental growth.
New well-designed condominium and apartment buildings will continue to perform better than older buildings that have not been refurbished or redecorated.
About CB Richard Ellis
CB Richard Ellis Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2008 revenue). The Company has approximately 30,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CB Richard Ellis has been named a BusinessWeek 50 “best in class” company for three years in a row.
CB Richard Ellis established an office in Bangkok in 1988, followed by Phuket office in 2004, and Samui office in 2007. CB Richard Ellis (Thailand) Co., Ltd. has grown to be a leading real estate services provider, offering strategic advice and execution for sales and leasing for all types of property, property and facilities management, valuation and advisory, and research and consulting. For more information, visit the company's website at www.cbre.co.th.
2010 has begun with a more positive market sentiment. The improving economic outlook globally and perception of Thailand’s political situation, together with low market prices compared to other mature property markets, have had a positive impact on consumer confidence in property investment in Thailand.
Following the economic crisis, the supply of new office, retail and industrial space is at an all-time low. These sectors are expected to improve this year, in line with the global and local economic recovery.
Thailand’s residential market in 2009 was primarily driven by local demand. This year, CBRE believes that local demand will continue to be strong and that individual foreign property investors will start to return to the market. Thai condominium prices remain attractive compared to other cities in the region, such as Shanghai, Hong Kong and Singapore where prices have risen sharply in the last six months.
Average Price of Luxury Residential Units in the Region (THB per sq.m.)
City 2008 2009 %Change
y-o-y
Shanghai THB 176,032 THB 189,659 7.7
Hong Kong THB 622,549 THB 722,376 16.3
Singapore THB 479,327 THB 555,481 12.8
Bangkok THB 117,875 THB 124,539 5.6
Source: CBRE Research
However, there are continuing concerns about Thailand’s political stability and the strength of the global economy. If Thailand’s economy and politics are stable in 2010, the residential sector will see consistent positive growth.
Government Policy
The Government stimulus package will expire in March 2010 and it remains uncertain whether it will be extended. CBRE believes the extension of this package will benefit buyers and developers of large condominium projects launched during the crisis which are due for completion and transfer within this year.
The initiative of this government to reform property and land taxation with a view to creating fairness sounds positive, but it will only be possible to determine the effect on the property market once the details of the proposed legislation have been finalised. “So long as the new tax legislation is on a fair basis and the tax rate not so excessively high as to discourage investment, CBRE sees this reform as beneficial for the market,“ Ms. Aliwassa Pathnadabutr, Managing Director of CBRE Thailand said. An additional measure that CBRE urges the government to consider is the extension of the long lease term from the current 30 years up to a maximum of 90 years. This will help improve the market mechanism and make large-scale commercial projects viable which would not be feasible if such developments were freehold due to the high land cost or if they were on a 30-year lease due to the limits on lease terms. The extension of the lease term will also have a direct benefit for resort destinations such as Phuket and Samui where the property markets are primarily driven by foreign demand.
Looking at 2010 and beyond, environmental issues are a key consideration for all industries including the property market. There will be more restrictions which may increase the cost for developers. The Environmental Impact Assessment (EIA) process is one of the key concerns and risks for developers as there are uncertainties in the details and timing required to obtain such a permit. This is one of the factors which are likely to delay the emergence of new supply.
Any additional incentives that would attract foreign direct investment in both manufacturing and the service industries would be welcomed, in order to enable Thailand to compete with rival destinations.
Office : The Market Should Improve in 2010
Bright future due to limited new supply
In 2010, there will be very limited new supply in the office sector. Only 78,380 sq.m. are due to be completed, including Sathorn Square (72,500 sq.m.) and Sivatel Wireless Road (5,880 sq.m.). CBRE sees the limited increase in new supply as a positive indicator for the office market because any increase in take-up will reduce vacancy rates and lead to rental increases. At the end of 2009 the vacancy rate stood at 12%.
Even though net demand in 2009 dropped by more than 50 % to only 52,000 sq.m., average grade A CBD office rents fell by 7.26% to THB 690 per sq.m while grade B CBD office rents fell by 12% to THB 509 per sq.m. This is considerably better than in other markets. Rents fell by 52.6% in Singapore and 49.9% in Hong Kong in 2009.
Average Grade A CBD Office Rents in the Region (THB per sq.m.)
City 2008 2009 % Change
Y-o-Y
Hong Kong THB 4,107 THB 2,255 -49.09%
Singapore THB 4,041 THB 1,913 -52.66%
Bangkok THB 744 THB 690 -7.26%
Source: CBRE Research
Following the recovery of the global economic, CBRE believes that companies will be less cost conscious and that 2010 will be a good time to take advantage of the low rents to relocate to newer buildings.
Sathorn Square – the only new grade A office building to be completed in 2010.
Condominium : The Most Exciting and the Most Competitive
Supply Outlook : More competitive market in 2010
The total supply of downtown condominiums increased to 61,522 units by the end of Q3 2009, up 14% year-on-year. In total, there are 17,664 units under construction in downtown Bangkok, of which 78% of which have been reportedly sold, leaving 3,879 units being marketed (completed and under construction).
In 2009, there were 3,912 units in 15 projects launched in the downtown area, with the majority being one-bedroom unit types. In 2010 CBRE expects a much more competitive market, with an increasing number of project launches as there is pent-up supply from developers who have delayed their projects since the onset of the economic crisis in late 2008 and also new supply from large developers who acquire plots of land for new developments.
Newly Launched Condominium Projects* Broken Down by Unit Type
Year Studio 1 B/R 2 B/R 3 B/R 4 B/R PH Total
2008 243 2,270 1,090 194 19 10 3,826
2009 54 1,284 694 10 0 0 2,042
Total 297 3,554 1,784 204 19 10 5,868
Source: CBRE Research
* Include 18 selected projects in 2008 and 11 selected projects in 2009 as of Q3 2009.
Demand Outlook : Demand continues to be strong
CBRE sees a growing demand for condominiums driven primarily by a change in lifestyle which has led to the need to own a first or second home in the CBD or near mass transit routes to reduce the need to commute. From an investment perspective, investors also increasingly recognise condominium purchases as an appreciating long-term investment asset. In the past, there were few Thai investors in the market. However, with lower interest rates and proven returns, investing in condominiums has become a popular investment choice for many Thais. It is also considered a safe and secure investment compared to the equities market which is much more volatile.
New Trends : Good locations, small furnished units with affordable prices
From the development side, developers need to ensure they are ahead of the game in trying to predict future location trends. The danger is that a popular location can quickly become saturated with new supply. The key to success is either to be the first to launch in an upcoming location, or to find a location with high barriers to entry.
New supply especially for the middle income market will focus on smaller units at affordable prices. In a competitive market with experienced buyers, products must offer quality as well as innovative and functional design in order to be successful. The reliability and reputation of the developer is another key consideration for buyers.
Luxury and Super Luxury Segments : Limited future supply
The luxury and super luxury condominium segment is expected to slowly recover and develop into a niche market. Prime downtown land is rarely available for sale and prices will remain high, CBRE, therefore, does not expect many new launches for luxury condominiums in prime downtown locations.
With a wave of new launches focusing on smaller one-bedroom units along mass transit routes with prices ranging from THB 3 to 8 million, the majority of unsold two to three-bedroom units priced at over THB 15 million and developed before the crisis should soon be absorbed. There will then be a shortage of two-bedroom units in the luxury market especially in prime locations. Short-term investors will speculate on one-bedroom units whereas long-term investors will focus on two and three bedroom units which are in demand among expatriates in the rental market, while smaller units are driven by local demand. With a limited supply of newly launched larger units CBRE believes the existing supply of such grade-A units in prime locations will continue to appreciate in value.
2010 Pricing Trends : Completed prime condo prices on the rise
In terms of price movement, CBRE sees no significant increase in prices per sq.m for mid-market condominiums as the economic recovery is still underway with the prevailing political problems which continue to concern buyers. The best selling segment is priced at THB 50,000 – 80,000 per sq.m in mid-town locations or within 15 kilometres of the CBD. Prices in this segment are unlikely to increase as the purchasing power of the target market is limited. The developers have to compete on cost control and pricing.
Prices for completed high-end and luxury downtown condominium have increased slightly by 5.6% from THB 117,875 per sq.m from Q4 2008 to THB 124,539 per sq.m in Q3 2009 and CBRE believes that the prices of completed buildings in prime locations will continue to rise in 2010.
Prices of the future supply of high-end and luxury downtown condominium in 2009 fell slightly by 6.3% from THB 142,133 per sq.m in Q4 2008 to THB 133,134 per sq.m in Q3, 2009 due to the slow market conditions. New launches in 2010 are likely to see an increase in price per sq.m due to the higher construction costs but, as unit sizes are smaller, total unit prices will be on par with current levels.
Retail : More Focus
Improvement expected following return of consumer confidence
In the first three quarters of 2009, the supply of retail space grew by 6.6% or 327,125 sq.m. Whilst occupancy was stable throughout the year, rents were flat and even fell in some cases during the earlier part of 2009. The fourth quarter showed signs of consumer confidence and spending returning.
The trend for new retail centres in Bangkok is evolving from one-stop mega shopping complexes to more focused community malls and medium-sized lifestyle and entertainment complexes such as Esplanade Rattanathibet.
The major players in the retail market are Central, The Mall, Siam Future and Major Cineplex. Retail developments to note this year are Terminal 21 which is currently under construction and located in Sukhumvit at the Asoke junction, Central Rama 9 and Mega Bangna which will house Thailand’s first IKEA store.
Serviced Apartments : Highly Competitive
Occupancy rates are likely to be flat and downward pressure on rents
The serviced apartment sector, which partially depends on tourists and business travellers as well as expatriates working in Bangkok, has suffered from growing supply which led to an overall drop in occupancy and rates in 2009.
Total supply increased to 12,392 units, up by 6.84% year-on-year, with a further 610 units expected to be completed by 2010 and approximately 2,000 units by 2013. Occupancy rates remained at 75% in Q3 2009. Occupancy was partly protected by a number of long-term contracts which are less volatile than the daily rate market. Average rates, however, fell by about 20% year-on-year.
The biggest challenge faced by this sector is the volume of new supply targeting both long-stay expatriates and short-stay businessmen and tourists.
Serviced apartments compete against apartments and particularly small condominium units for rent in the long-stay market and the rapidly growing supply of hotels in the short-stay market. The influx of new supply of both serviced apartments and hotels will continue to exert a downward pressure on both rates and occupancy.
Expatriate Rental Apartments
The total supply of expatriate-standard rental apartments in Bangkok increased to around 11,151 units, up by 4.5% year-on-year
Occupancy remained high at 91%. CBRE has not seen a dramatic drop in the number of expatriates in 2009 but, since companies are trying to maintain or reduce costs, so CBRE does not expect any increase in housing allowances.
Multinational companies continue to be cautious on their expansion plans given that the global economy is yet to fully recover. Thailand’s political problems are also an added factor which has restrained business expansion plans in Thailand.
CBRE does not expect that there will be a significant increase in the number of expatriates in 2010. There will be increased competition from individual “buy-to-rent” condominium owners seeking to lease out units in recently completed developments. There are about 620 apartment units under construction but there are also 17,664 condominium units under construction and CBRE expects that up to 50% of the new condominiums have been bought by purchasers who want to lease out their units on completion. This increase in supply combined with little or no growth in demand will dampen any potential for overall rental growth.
New well-designed condominium and apartment buildings will continue to perform better than older buildings that have not been refurbished or redecorated.
About CB Richard Ellis
CB Richard Ellis Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2008 revenue). The Company has approximately 30,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CB Richard Ellis has been named a BusinessWeek 50 “best in class” company for three years in a row.
CB Richard Ellis established an office in Bangkok in 1988, followed by Phuket office in 2004, and Samui office in 2007. CB Richard Ellis (Thailand) Co., Ltd. has grown to be a leading real estate services provider, offering strategic advice and execution for sales and leasing for all types of property, property and facilities management, valuation and advisory, and research and consulting. For more information, visit the company's website at www.cbre.co.th.
Wednesday, December 16, 2009
Hawaii's Proactive Budget Management Techniques And Healthy Reserves Support Its 'AA' GO Rating, S&P Report Says
Hawaii's 'AA' general obligation (GO) bond rating reflects our view of management's well-established budget monitoring practices and strong reserve levels, according to a report published today by Standard & Poor's Ratings Services.
"We believe that Hawaii's proactive budget management techniques will result in manageable out-year gaps that state officials will successfully resolve without a significant impact to reserve designations," said Standard & Poor's credit analyst Paul Dyson. "Moreover, in our opinion, the state's level of reserves provides us with credit comfort at the current rating level."
Fiscal 2008 combined reserves, including carry-over and various funds, totaled $590 million, or 11% of expenditures; according to state estimates, combined reserves will decline to $208 million, or 3.9% of expenditures, in fiscal 2009, below the $253 million, or 4.9% of expenditures, forecasted in May 2009. Officials believe various corrective actions including expenditure cuts and revenue enhancements for fiscals 2010 and 2011 should produce ending combined reserve balances closer to 5%-6% of expenditures; however, without such measures, combined reserves could fall to 2%-3% during fiscals 2010 and 2011, and negative by fiscal 2012.
The state constitution requires that the governor and legislature begin to provide tax refunds or credits if the general fund balance exceeds 5% of expenditures for two consecutive years; however, it does not require that refunds or credits immediately lower fund balances to the 5% target, permitting the legislature to retain balances above these levels in recent years. The legislature has faced the situation in the past several fiscal years, which has led to increased appropriation of existing carry-over fund balances for one-time and recurring use. We believe the likely result will be a decrease in the current budgeted and GAAP general fund balance relative to fiscals 2006 through 2008, with an increase most likely dependent on a faster or more robust economic recovery. In our opinion, further significant expenditure reductions will be difficult, but we also recognize that the state and governor have been willing to make them in the past.
After sustained economic expansion between 2003 and 2007, when many sectors performed at record levels, Hawaii's (population 1.3 million) economic trends decelerated and, in many cases, turned negative in 2008 and 2009. However, unlike many markets, the Hawaii housing market experienced only a moderate housing decline: Median home prices as of July 2009 were down just 10% from 2006 levels and only 2.3% of loans went into foreclosure over the last 18 months, ranking it eighth best in the nation. Hawaii's nominal personal income is more stable, and actually increased more than the U.S.' in both 2008 and the first quarter of 2009. The state's median household income was what we consider a strong 121% of the national average as of 2008.
The report is available to RatingsDirect on the Global Credit Portal subscribers at www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to research_request@standardandpoors.com. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
"We believe that Hawaii's proactive budget management techniques will result in manageable out-year gaps that state officials will successfully resolve without a significant impact to reserve designations," said Standard & Poor's credit analyst Paul Dyson. "Moreover, in our opinion, the state's level of reserves provides us with credit comfort at the current rating level."
Fiscal 2008 combined reserves, including carry-over and various funds, totaled $590 million, or 11% of expenditures; according to state estimates, combined reserves will decline to $208 million, or 3.9% of expenditures, in fiscal 2009, below the $253 million, or 4.9% of expenditures, forecasted in May 2009. Officials believe various corrective actions including expenditure cuts and revenue enhancements for fiscals 2010 and 2011 should produce ending combined reserve balances closer to 5%-6% of expenditures; however, without such measures, combined reserves could fall to 2%-3% during fiscals 2010 and 2011, and negative by fiscal 2012.
The state constitution requires that the governor and legislature begin to provide tax refunds or credits if the general fund balance exceeds 5% of expenditures for two consecutive years; however, it does not require that refunds or credits immediately lower fund balances to the 5% target, permitting the legislature to retain balances above these levels in recent years. The legislature has faced the situation in the past several fiscal years, which has led to increased appropriation of existing carry-over fund balances for one-time and recurring use. We believe the likely result will be a decrease in the current budgeted and GAAP general fund balance relative to fiscals 2006 through 2008, with an increase most likely dependent on a faster or more robust economic recovery. In our opinion, further significant expenditure reductions will be difficult, but we also recognize that the state and governor have been willing to make them in the past.
After sustained economic expansion between 2003 and 2007, when many sectors performed at record levels, Hawaii's (population 1.3 million) economic trends decelerated and, in many cases, turned negative in 2008 and 2009. However, unlike many markets, the Hawaii housing market experienced only a moderate housing decline: Median home prices as of July 2009 were down just 10% from 2006 levels and only 2.3% of loans went into foreclosure over the last 18 months, ranking it eighth best in the nation. Hawaii's nominal personal income is more stable, and actually increased more than the U.S.' in both 2008 and the first quarter of 2009. The state's median household income was what we consider a strong 121% of the national average as of 2008.
The report is available to RatingsDirect on the Global Credit Portal subscribers at www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to research_request@standardandpoors.com. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
Tuesday, December 15, 2009
Six Asian Economies Announce Tariff Reductions and Broader Cooperation
Six Asian Economies Announce Tariff Reductions and Broader Cooperation
Agreement comes at Asia-Pacific Trade Ministers Meeting in Seoul
Trade ministers of six Asian countries – including China, India and the Republic of Korea, three of the region’s largest economies – today announced further tariff reductions at the conclusion of the third Asia-Pacific Trade Agreement (APTA) ministerial council in Seoul
During the meeting, the accession process for Mongolia to become an APTA member was also formally initiated. Besides China, India and the Republic of Korea, the other current members of APTA are Bangladesh, Lao PDR and Sri Lanka.
APTA is the only regional trade agreement which links East, Southeast and South Asia. It was negotiated under the auspices of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
“The total trade volume of APTA members skyrocketed from a mere 140 million Dollars in 1976 to 3.1 trillion Dollars in 2008” underlined Mr. Hur Kyung-Wook, First Vice Minister of Strategy and Finance of the Government of the Republic of Korea. “The conclusion of the Fourth Round negotiations will help evolve APTA as a truly significant trade agreement in the Asia-Pacific region” he added.
“I am delighted that APTA members have made significant progress in deepening their agreement and are committed to continuing the process of liberalization” said Mr. Shigeru Mochida, Deputy Executive Secretary of ESCAP.
The six APTA members furthermore committed to expanding their cooperation into investment and trade facilitation by signing formal framework agreements in those two areas. A framework agreement on trade in services was also finalized and will be signed in early 2010.
In their declaration, the ministers called for further tariff
liberalization and negotiations into additional areas of cooperation. They also reaffirmed their commitment to expanding membership into “a truly pan-Asia-Pacific Trade Agreement.”
The Seoul meeting was hosted by the First Vice Minister of Strategy and Finance of the Republic of Korea, Hur Kyung-Wook, and was attended by ministers or vice ministers from the six APTA members, as well as by ESCAP Deputy Executive Secretary Shigeru Mochida.
Agreement comes at Asia-Pacific Trade Ministers Meeting in Seoul
Trade ministers of six Asian countries – including China, India and the Republic of Korea, three of the region’s largest economies – today announced further tariff reductions at the conclusion of the third Asia-Pacific Trade Agreement (APTA) ministerial council in Seoul
During the meeting, the accession process for Mongolia to become an APTA member was also formally initiated. Besides China, India and the Republic of Korea, the other current members of APTA are Bangladesh, Lao PDR and Sri Lanka.
APTA is the only regional trade agreement which links East, Southeast and South Asia. It was negotiated under the auspices of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
“The total trade volume of APTA members skyrocketed from a mere 140 million Dollars in 1976 to 3.1 trillion Dollars in 2008” underlined Mr. Hur Kyung-Wook, First Vice Minister of Strategy and Finance of the Government of the Republic of Korea. “The conclusion of the Fourth Round negotiations will help evolve APTA as a truly significant trade agreement in the Asia-Pacific region” he added.
“I am delighted that APTA members have made significant progress in deepening their agreement and are committed to continuing the process of liberalization” said Mr. Shigeru Mochida, Deputy Executive Secretary of ESCAP.
The six APTA members furthermore committed to expanding their cooperation into investment and trade facilitation by signing formal framework agreements in those two areas. A framework agreement on trade in services was also finalized and will be signed in early 2010.
In their declaration, the ministers called for further tariff
liberalization and negotiations into additional areas of cooperation. They also reaffirmed their commitment to expanding membership into “a truly pan-Asia-Pacific Trade Agreement.”
The Seoul meeting was hosted by the First Vice Minister of Strategy and Finance of the Republic of Korea, Hur Kyung-Wook, and was attended by ministers or vice ministers from the six APTA members, as well as by ESCAP Deputy Executive Secretary Shigeru Mochida.
Thursday, December 3, 2009
Father’s Day Lunch + Dinner Buffet Le Meridien Bangkok
Show dad just how special he is by spending Father’s Day on Saturday 5 December 2009 at the hottest new hotel, Le Meridien Bangkok. With something for everyone, choose between the World cuisine Latest Recipe for lunch or the ultra chic Bamboo Chic for dinner.
Latest Recipe Father’s Day on Stage
World Cuisine buffet
12.00 – 2.30 pm
Price 980 THB
Remind your dad to bring his appetite to the Father’s Day on Stage as the variety of dishes is extensive representing the greatest recipes from Le Meridien around the world. On stage will be presented Parma ham slice-to-order, Alder wood Smoked salmon, NZ mussel, Prime Beef Carving, Crisp salads, cured meats and cheeses, curries, sushi and more. Chef s will be in action at their a la minute food stations where dishes like noodles, pizza, and pasta are expertly made-to-order.
Bamboo Tune Father Forever Day
Japanese Chinese Thai temptations
18.00 pm – 01.00 am
Price 1500 THB
Invite your dad to Bamboo Chic and be enthralled by the charm of its modern, exotic atmosphere. Let his taste buds travel to distant lands from sampling Wagyu beef roll with bamboo leaves, wok fried Japanese black pork with pepper sauce, shark fin soup with crab meat, sliced Yellow tail fish with citrus vinaigrette and more. Also available is the Live style ASIATIC BBQ that include for instance foie gras, import oyster, rock lobster, tiger prawn, Unagi and other Asian delicacies
Choose the perfect match for the man you admire the most. Half price for children age from 5 to 12 and with no charge for children under the age of 5. For more information or reservations, please call Tel: 02 232 8888 or e-mail: fbadmin.LMBKK@lemeridien.com (Price subjects to service charge and government tax)
Latest Recipe Father’s Day on Stage
World Cuisine buffet
12.00 – 2.30 pm
Price 980 THB
Remind your dad to bring his appetite to the Father’s Day on Stage as the variety of dishes is extensive representing the greatest recipes from Le Meridien around the world. On stage will be presented Parma ham slice-to-order, Alder wood Smoked salmon, NZ mussel, Prime Beef Carving, Crisp salads, cured meats and cheeses, curries, sushi and more. Chef s will be in action at their a la minute food stations where dishes like noodles, pizza, and pasta are expertly made-to-order.
Bamboo Tune Father Forever Day
Japanese Chinese Thai temptations
18.00 pm – 01.00 am
Price 1500 THB
Invite your dad to Bamboo Chic and be enthralled by the charm of its modern, exotic atmosphere. Let his taste buds travel to distant lands from sampling Wagyu beef roll with bamboo leaves, wok fried Japanese black pork with pepper sauce, shark fin soup with crab meat, sliced Yellow tail fish with citrus vinaigrette and more. Also available is the Live style ASIATIC BBQ that include for instance foie gras, import oyster, rock lobster, tiger prawn, Unagi and other Asian delicacies
Choose the perfect match for the man you admire the most. Half price for children age from 5 to 12 and with no charge for children under the age of 5. For more information or reservations, please call Tel: 02 232 8888 or e-mail: fbadmin.LMBKK@lemeridien.com (Price subjects to service charge and government tax)
THAI’s Board Ready to Move Forward with Management’s 5 Year Strategic Plan
Thai Airways International Public Company Limited’s Board of Directors and Management led by Mr. Ampon Kittiampon, THAI Chairman of the Board of Directors, and Mr. Piyasvasti Amranand, THAI President, held a workshop on 28 November 2009 to formulate plans to re-establish THAI as a top three airline in Asia and among the five best airlines in the world within two years.
Mr. Piyasvasti Amranand, THAI President, said that the Company’s Management presented a 5 Year Strategic Plan (2010-2014) and the annual budget (2010-2011) to the Board of Directors for which both the Board of Directors and the Management undertook a joint review of the 5 Year Strategic Plan. The Board of Directors agreed in principle to the Strategic Plan, but also made some observations for improvement before submitting the 5 Year Strategic Plan for final Board approval on 18 December 2009. Upon approval of the strategic plan, implementation will commence immediately on its 50th Anniversary (2010) to achieve its goal of TG 100 where THAI will remain a strong and viable airline in its centennial anniversary.
The Strategic Plan emphasizes 3 dimensions: the need to be highly customer oriented, create higher value for customers, and ensuring dynamism. The Strategic Transformation Roadmap to propel the Strategic Plan includes: 1. Strategic Positioning, 2. Building Customer Value, 3. Route Network and Strategy Development, 4. Product Strategy, 5. Pricing, Revenue Management and Distribution Channels, 6. Business Strategy for THAI Business Units, 7. Cost Efficiency and Productivity, 8. Organizational Effectiveness, 9. Financial Strength.
Focus is placed on achieving the highest level of customer satisfaction within 2 years with the plan to refurbish seats and entertainment systems within existing aircraft along with providing improved customer experience at every touchpoint from ticketing, ground services, inflight services until the customer leaves the airport.
To achieve the above goal, the Company’s Board of Directors approved the refurbishment of 12 Boeing 747 aircraft that are utilized primarily on flights to Europe that are high revenue-making routes. Refurbishment will take two years for completion for all 12 aircraft. In the meantime, other service enhancement strategies will need to be immediately put in place, such as improvement to inflight menus, ensuring service standard and consistency at all customer touchpoints.
For 2010, the established targets include achieving revenues of 193,000 million THB, a 20.7 percent increase over 2009. Profit before interest, tax and foreign currency exchange (EBIT) gain/loss is expected to be approximately 4,300 million THB, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) is targeted at approximately 32,000 million THB. Available seat kilometer (ASK) is set for a 10.7 percent increase to 80,000 million for production, revenue passenger kilometer (RPK) is set at 59,000 million, a 13.2 percent increase over 2009. Target average cabin factor for 2010 is 74 percent along with a 11.4 percent increase in freight production (ADTK) and a 14 percent increase in freight revenue over 2009 to 4,400 million ton kilometers (ADTK) and 2,200 million ton kilometers (RFTK), respectively.
Changes will be implemented in 2010 and beyond to strengthen its internal operations and enhancing its competitiveness in 2011. For 2012 and beyond, the solid operating and financial base will enable THAI to again grow and expand with sustainability towards achieving TG 100.
Mr. Piyasvasti Amranand, THAI President, said that the Company’s Management presented a 5 Year Strategic Plan (2010-2014) and the annual budget (2010-2011) to the Board of Directors for which both the Board of Directors and the Management undertook a joint review of the 5 Year Strategic Plan. The Board of Directors agreed in principle to the Strategic Plan, but also made some observations for improvement before submitting the 5 Year Strategic Plan for final Board approval on 18 December 2009. Upon approval of the strategic plan, implementation will commence immediately on its 50th Anniversary (2010) to achieve its goal of TG 100 where THAI will remain a strong and viable airline in its centennial anniversary.
The Strategic Plan emphasizes 3 dimensions: the need to be highly customer oriented, create higher value for customers, and ensuring dynamism. The Strategic Transformation Roadmap to propel the Strategic Plan includes: 1. Strategic Positioning, 2. Building Customer Value, 3. Route Network and Strategy Development, 4. Product Strategy, 5. Pricing, Revenue Management and Distribution Channels, 6. Business Strategy for THAI Business Units, 7. Cost Efficiency and Productivity, 8. Organizational Effectiveness, 9. Financial Strength.
Focus is placed on achieving the highest level of customer satisfaction within 2 years with the plan to refurbish seats and entertainment systems within existing aircraft along with providing improved customer experience at every touchpoint from ticketing, ground services, inflight services until the customer leaves the airport.
To achieve the above goal, the Company’s Board of Directors approved the refurbishment of 12 Boeing 747 aircraft that are utilized primarily on flights to Europe that are high revenue-making routes. Refurbishment will take two years for completion for all 12 aircraft. In the meantime, other service enhancement strategies will need to be immediately put in place, such as improvement to inflight menus, ensuring service standard and consistency at all customer touchpoints.
For 2010, the established targets include achieving revenues of 193,000 million THB, a 20.7 percent increase over 2009. Profit before interest, tax and foreign currency exchange (EBIT) gain/loss is expected to be approximately 4,300 million THB, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) is targeted at approximately 32,000 million THB. Available seat kilometer (ASK) is set for a 10.7 percent increase to 80,000 million for production, revenue passenger kilometer (RPK) is set at 59,000 million, a 13.2 percent increase over 2009. Target average cabin factor for 2010 is 74 percent along with a 11.4 percent increase in freight production (ADTK) and a 14 percent increase in freight revenue over 2009 to 4,400 million ton kilometers (ADTK) and 2,200 million ton kilometers (RFTK), respectively.
Changes will be implemented in 2010 and beyond to strengthen its internal operations and enhancing its competitiveness in 2011. For 2012 and beyond, the solid operating and financial base will enable THAI to again grow and expand with sustainability towards achieving TG 100.
KTC and Land & House present nifty credit card campaign with KTC Forever Rewards points for L&H house plus 150 times of point value.
KTC and Land & House jointly launch the new campaign, “KTC Forever Rewards points for L&H house”. For the first time in the Thai credit card industry, members can use their points as discount toward the purchase of a house in over 40 Land & House development projects, with 150 times of point value from now until December 31st, 2009.
Woravut Nisapakulthorn, Executive Vice President - Credit Card Business, “KTC” or Krungthai Card Public Company Limited, said “KTC is launching a special promotion with the collaboration of Land & House Public Company Limited. “KTC Forever Rewards points for L&H house” embodies the unique qualities of KTC Forever Rewards points: value, convenience and practicality. The campaign will allow KTC members to use their points as discount toward the purchase of a house in over 40 Land & House projects including detached house, town home and condominium from now until December 31st, 2009.”
“KTC members can simply use 2,500 points or more to redeem for the discount to purchase any Land & House project, provided that it costs 3 Million Baht or less. The value of KTC Forever Rewards points has also gone up 150 times for all members. With 2,500 points, members will be entitled to 25,000 Baht discount or 100 times of the regular point value of only 250 Baht. More importantly, members will earn 50 times of the points used to purchase the house. If members use 2,500 points in the purchase, KTC will grant 125,000 extra points in return. Normally members would have to spend 3,125,000 Baht in order to get this many points.”
Woravut Nisapakulthorn, Executive Vice President - Credit Card Business, “KTC” or Krungthai Card Public Company Limited, said “KTC is launching a special promotion with the collaboration of Land & House Public Company Limited. “KTC Forever Rewards points for L&H house” embodies the unique qualities of KTC Forever Rewards points: value, convenience and practicality. The campaign will allow KTC members to use their points as discount toward the purchase of a house in over 40 Land & House projects including detached house, town home and condominium from now until December 31st, 2009.”
“KTC members can simply use 2,500 points or more to redeem for the discount to purchase any Land & House project, provided that it costs 3 Million Baht or less. The value of KTC Forever Rewards points has also gone up 150 times for all members. With 2,500 points, members will be entitled to 25,000 Baht discount or 100 times of the regular point value of only 250 Baht. More importantly, members will earn 50 times of the points used to purchase the house. If members use 2,500 points in the purchase, KTC will grant 125,000 extra points in return. Normally members would have to spend 3,125,000 Baht in order to get this many points.”
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