Bangkok--Feb 6--Cushman & Wakefield (Thailand) After the successful auction of Diamond Tower and Floraville condominiums last November, BANKTHAI has signed up again with Cushman & Wakefield to organize another auction of remaining units in these two projects in mid March this year. This second round of auctions will be held on Sunday, March 18, 2001 at BANKTHAI Headquarters, 23 Floor, North Sathorn Road. Similar to the previous auction, there will be no minimum bidding price for these units. Last year C&W successfully organized the auctions of two BANKTHAI properties, Diamond Tower on Silom Road, and Floraville on Pattanakarn Road. A total of 66 units in the two projects were sold in the auctions with a total sales value of over Baht 150 million. Average prices were approximately Baht 22,000 psm for Diamond Tower units and Baht 21,600 psm for the Floraville units. In the previous auction, 47 units in Diamond Tower were successfully sold. There remains a waiting list of customers interested in obtaining the units after the auction process. This proves there is demand for residential projects in good locations at the right price. "The auction process not only provides a transparent and competitive marketing to help reduce oversupply of residential condominium units, but also helps developers and banks reduce non-performing assets. The auctions have helped establish market prices that homebuyers and investors are willing to pay. As the auction process continues to help the residential market out of the bottom of the property cycle, buyers will have more reference prices to compare with when making direct purchases" said Apisit Limlomwongse, Managing Director at Cushman & Wakefield. Although the market in the outer Bangkok is considered thin, the sale of 19 units at Floraville was very satisfactory. "The auction of the Floraville units in March should achieve higher prices because these units are among the highest-quality units available in the area. The spectacular views and its location adjacent to the city provide a residence with peaceful setting and convenient access to the city center" added Kulvadee Kulanet, Agency Director at Cushman & Wakefield. The auction in March will offer the last 29 units in Diamond Tower with sizes ranging from 50-130 sq m. Floraville will also offer 29 units of one to four bedrooms with sizes ranging from 84-405 sq m. The units are now available for viewing and the auction sale offices at both projects are open everyday from 9.00am to 6.30pm. Mid 1999 was the first time an auction of this type was held in Bangkok. Several international auction professionals introduced the process and took some time to establish this marketing tradition, and soon local agencies and new companies sprouted up as the auction process proved to be one of the most successful selling strategies for residential projects in Bangkok. The year 2000 witnessed healthy development of the auction market. Increasing numbers of residential projects have employed the auction process as a marketing strategy to quickly sell off the units. Residential projects auctioned last year included condominiums, single houses, townhouses and subdivided land plots. Most of the projects employing the auction process were successful over the last year. More than 20 projects were put "under the hammer" with more than 600 units successfully being sold. This figure represents the majority of condominiums in demand from the middle to high grade condominium sector in Bangkok last year. It is reported that the sale rate of other completed residential projects have proved to be slow in comparison to those auctioned projects. This year there are already six auctions gearing up to sell residential units in Bangkok and more are expected as project owners and lenders realize that they can reduce their non-performing asset quickly. The average auction prices of residential units in Bangkok CBD in 2000 are about 26% less than the average direct-sale prices of the units at similar locations in 1995. It is important to note that some of the discounts being claimed by sellers are based on the listed asking prices which sometimes are higher than the prices from 1995. Recorded discounts of individual auctioned projects range between 35-70% of the listed asking prices. The discounts varied depending largely on the location, age, and quality of products. Besides price decreases, three other factors are being observed from the auction in the property market. One factor is that small studio units are not as attractive as one- to two-bedroom units. Secondly, leasehold units are relatively less attractive to investors due to its uncertainty of ownership after the expiration of ground lease. As a result, achievable prices of leasehold units are lower than those of freehold units on a similar location. And lastly, most of the buyers consider the maintenance of the building to be an issue for their pricing decisions. In conclusion, Cushman & Wakefield believes that the auction market will remain one of the most attractive selling strategies for many projects in the coming year and could be developed and used for newly announced projects similar to the auction market in Australia. Moreover, auction prices can be considered to represent the market value of the property. Most final auction prices of many projects are in the region of or less than their replacement costs. As a result, new supply in some sectors will be discouraged to enter the market for sometime until the achievable sale prices increase to the level feasible for new development. The Results of Major Auction Events in Bangkok Property Location Bid Price Discount % per sqm Silom Park Place Silom 38,055 39% Royal River Place Rama III 31,608 43% Grand Lang Suan Lang Suan 60,237 39% SV City Rama III 27,606 52% Royal 9 Residence Rama IX 18,000 64% Charn Issara City Petchkasem Rd. 18,000 49% First Tower Sukhumvit 1 24,000 60% Waterford Sukhumvit 30 61,939 38% Waterford (Thonglor) Sukhumvit 55 46,565 48% Waterford Rama IV 32,321 50% Pipat Place Silom 48,740 37% Diamond Tower Silom 22,500 50% Floraville Srinakarin 24,000 45% Regent Place II Rajadamri 33,408 43% Note : Cushman & Wakefield is one of the world 's pre-eminent international real estate service firms. Founded in 1917, Cushman & Wakefield operates over 158 offices in 49 countries through its worldwide network in Asia, North America, Europe, South America, Middle East and South Africa. For more information please contact: Cushman & Wakefield (Thailand) Ltd. บริษัท คุชแมน แอนด์ เวคฟีลด์ (ประเทศไทย) จำกัด 1st Floor, Bank of America Center 2/2 Wireless Road, Pathumwan Bangkok 10330, Thailand Tel : (662) 254 5568 Fax : (662) 253 7584 End.-AN-