Australian embassy land sale could set record

Sathon Road market flat for a few years

The Australian embassy plot in Sathon Road is up for sale. Going by previous sales, the nearly eight-rai plot could go for 2 million baht per square wah, says a property consultant. (Photo by Patipat Janthong)

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The Australian embassy plot is likely to fetch a record high price per square wah on Sathon Road. A deal four years ago for the former French embassy plot on the same road was 1.2 million baht per sq w.

Nalinrat Chareonsuphong, managing director of property consultant Nexus Property Marketing Co, expects the nearly eight-rai plot to set a new benchmark price for the road at 2 million baht per sq w.

The former British embassy plot on Ploenchit Road was nine rai and sold for 950,000 baht per sq w in 2006 to giant retailer Central Pattana Plc. After the deal, land prices offered on the road soared to over 1 million baht per sq w.

Not far from Ploenchit Road, a three-rai plot on Chidlom Road was sold to SC Asset Corporation for 1.91 million baht per sq w in 2015.

Last year the British embassy offered its last plot sized more than 20 rai on Wireless Road. Reportedly Central Pattana Plc joined with Hong Kong Land to fight for the plot with TCC Group, owned by billionaire Charoen Sirivadhanabhakdi.

The bidding result has not been announced, but the price is expected to be higher than 2 million baht per sq w, said Mrs Nalinrat, based on an estimate from the Chidlom plot SC bought.

"Several plots on Sathon Road have hit the market the past few years after the French embassy was sold, but no sales were transacted as the offering prices were high," she said.

The French embassy was reportedly the first embassy on Sathon Road to sell land where the embassy was located. The bidding opened for the 3.5-rai plot in 2011 and Hong Kong-based investor HKR International Ltd won at 800,000 baht per sq w.

Two years later HKR International sold the plot to the owner of cosmetics producer Smooth-E Co for 1.2 million baht per sq w, a capital gain of 50% in two years.

The plot was again offered in the market at 1.6 million baht per sq w, but has not found a taker.

The Treasury Department's land appraisal price for plots on Sathon Road for 2016-19 was 750,000 baht per sq w, rising 25% from 600,000 baht for 2012-15. It was ranked the highest increase in appraisal prices.

The highest appraisal price is on Silom Road at 1 million baht per sq w, up 17.7% from 850,000 baht in the previous appraisal.

Prasert Taedullayasatit, chief executive for premium business at residential developer Pruksa Real Estate Plc, said the company late last year was offered a three-rai plot on Sathon Road by Singaporean developer Hotel Properties Ltd. The developer of The Met condo was quoted land prices of 1.1-1.2 million baht per sq w, but Pruksa did not buy.

"We were afraid an environmental impact assessment report might not pass as the plot is located in front of The Met condo," said Mr Prasert. "There might be a problem with unit owners at The Met complaining about a new building possibly hiding their view."

The plot was eventually acquired by the Mahagitsiri family for an undisclosed price.

Pruksa is not interested in bidding for the Australian embassy land.

"The price is very high," Mr Prasert said. "If the price is 2 million baht per sq w, the project value will be around 15-20 billion baht, which is a risk for us as it is 30% of our total assets for a single project."

Last Thursday the plot sized 7-3-82 rai was offered for sale with property consultant JLL appointed as the sole agent. The floor area ratio on Sathon Road is up to 10:1. The closing date for bidding is early June 2017.

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