|By Pornnalat Prachyakorn, Bangkok Post,
ThailandMcClatchy-Tribune Regional News
August 31, 2010 - --The Pattaya-based developer Nova Group plans to introduce nine projects worth a combined 6.5 billion baht in Pattaya and Bangkok over the next two years, says president Rony Fineman.
Four of them will be condominiums worth more than five billion baht. The rest will be three- and four-star hotels in the two cities.
The 38-storey Legend will comprise 350 units located on Cosy beach. Two 27-storey buildings (equalling two projects) to be located on Jomtien beach will be under the Royal Beach brand and consist of 320 units each.
The Palm, at 3.5 billion baht the biggest of the four projects in terms of value, will have 42 storeys accommodating 500 units on Wong Amat beach.
Unit sizes will range from 36 square metres to more than 100 sq m priced from 40,000 to 50,000 baht per sq m for low-rise projects and 55,000 to 95,000 baht for high-rise buildings.
The projects are expected to be launched next year although some may be introduced in 2012, depending on market conditions, said Mr Fineman.
For the hotel projects, three are now under construction and will be opened in November 2011 -- the Centra Sukhumvit with 78 rooms, the Centra Pattaya with 200 rooms and the Centra Nova Hotel and Spa with 79 rooms.
The other two -- Centra Suites and the Holiday Inn Express -- located in Pattaya with 129 rooms each, will open in 2012. Construction on both will start next January.
Nova will use its cashflow to develop three hotels, while the other two will utilise loans from Siam Commercial Bank and UOB Bank.
Mr Fineman said the hotel industry was saturated in both Pattaya and Bangkok, so the five developments will be the company's final hotel expansion in Pattaya. The Bangkok project stems from the group's desire to have a presence in the capital.
"We plan in 2012 and 2013 to build hotels in Phuket and Samui. We're considering Hua Hin," he said.
The company expects environmental-impact assessment approval for the remaining projects by next June.
Meanwhile, Mr Fineman remains bullish on Pattaya's condominium market despite a slowdown in purchasing power since the 2008 global recession.
"Foreign buyers in Pattaya now have double problems. The first is that the baht is very strong and the second is they have their own recession in Europe and America which is obviously affecting them," he said.
"Our projects are still selling but not like before. But we expect in the high season to sell a lot for ownership."
As well, Pattaya has suffered the most from Bangkok's political problems due to its proximity to the capital, unlike Phuket or Koh Samui where people can avoid the troubled area via direct flights.
However, demand in Pattaya from Thai buyers has started picking up with new developments such as the Central Festival shopping centre helping to lure them back. In the past few years, Thai buyers had been turning to other locations such as Hua Hin instead.
The company has also seen low-season occupancy in its hotels drop to about 50-60% from 60-70% in the same period last year.
Mr Fineman said Pattaya was seeing many more Indian and Chinese tourists, and he expects an increase in the number from the Far East this year, which should help offset the decline in Western tourists.
Some recession-proof projects offer value for money as well as innovation, he said. For example, the company tries to offer 50% green areas in its projects. The Nova Gold Hotel also provides a computer in each guest room.
Mr Fineman said Pattaya now was seeing more real demand from Thai buyers, with speculation down a bit although rental returns remain attractive at 6-8% per year.
Starting with the 1986 opening of the Nova Lodge Hotel, Mr Fineman has been in Pattaya real estate for 24 years.
The Nova Group currently owns three hotels managed by Amari and a serviced apartment building in Pattaya. Existing condos include the Nova Mirage, Nova Atrium and Nova Avenue Residence. The more recent Nova Ocean View and The Cliff are both 50% sold.
The company's entertainment businesses include pubs and restaurants in Bangkok and Pattaya.
Land prices in Pattaya have doubled in the past two years. Plots in prime locations such as main or beach roads cost about 200,000 baht per square wah.
The company expects Pattaya will grow more quickly in the future, especially once investors in established markets such as India and China start to look outside their countries.
"We see Pattaya as the next Miami of the East. Proximity to Bangkok, the variety of accommodation and shopping and entertainment -- it's next to none," he said.
Foreign demand is projected to return once the euro strengthens again and the world economy improves, expected to be around the end of next year.
Mr Fineman added that the Nova Group also planned to list on the SET within the next five years.
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