Cancelled bookings, design revisions arise
A growing number of condo projects already launched for sale have failed to win environmental impact assessment (EIA) approval, forcing developers to return booking money and revise project designs. A prospective buyer talks to a condo saleswoman at a property fair earlier this year.
The problem, which causes projects to be delayed or even scrapped entirely, was common a few years ago and has recently re-emerged in the booming condo sector. The condo developer Grand Unity Development Co, a subsidiary of the SET-listed Univentures Plc, for instance, sent a letter to customers this week saying its two condo projects had failed their EIAs. Neramit Srangiam, the developer’s managing director, said in the letter that the company will return all booking money and interest to customers as stated in the contract. The projects are U Delight @ Phaholyothin Station, an eight-storey building with 400 units, and Condo U @ Phaholyothin Station, two eight-storey buildings with 409 units. Both are on Phahon Yothin Soi 23, launched in September 2012 and March 2013, respectively. The two projects are not the first case of failure to receive EIA approval.
On Tuesday, the SET-listed Noble Development Plc relaunched a condo project from two years ago after revising the project design. Noble Revo Silom, formerly Noble Unite, will have 319 units sized 31-55 square metres and priced from 123,000 baht per sq m. The previous design was 220 units sized 38-65 sq m for 110,000 baht per sq m. “Our project was initiated during a change in the green area required in the EIA report,” said Noble chief executive Kitti Thanakitamnuay. “The new requirement for green areas does not cover green areas within the building. They must be outdoors, but our previous design also had indoor green space within the building.” Having learned its EIA report needed to be revised, the company returned all booking money with interest to customers after achieving sales of up to 30% of the project. It revised the design, resulting in less space for sale, and raised selling prices in line with market prices. Land for the project on Surasak Road that cost 500,000 baht per sq wah two years ago is now nearly 1 million baht. Despite a project value of 1.7 billion baht that will earn a slightly higher profit than the original 1.5-billion-baht plan, there is still an economic loss from investment in construction during the period, Mr Kitti said. Prasert Taedullayasatit, managing director of the SET-listed Pruksa Real Estate, said his company will launch a new condo project only if the project receives EIA approval. Pruksa earlier this year relaunched The Tree Privata, formerly The Tree Kiatkai, with a new design after it failed to obtain a construction permit. The project is near the new parliament, an area where high-rise buildings are banned. The company has had to revise one project for failing an EIA, on Soi Ari, where a new project from Land and Houses Plc also faced the same problem. After EIA approval, Pruksa next week will launch Condolette Pixel Sathorn on Soi Si Bamphen off of Sathon Soi 1, worth 900 million baht. The project will have 345 units sized from 22.35 to 49 sq m and priced at 100,000 baht per sq m, with a goal to sell 70% by year-end.