Land price jumps amid transportation push
LAND prices in two regions of Thailand have skyrocketed by as much as 300 per cent as tycoons rush to buy them for their future property and commercial developments.
The two areas are Pakchong District and Nakhon Ratchasima province in the Northeast and Rayong, Chonburi, Chachoengsao provinces in the East.
The key reason for such a high demand for land in the two areas is that the country has started to invest in the transportation infrastructure.
Transportation projects top the government’s agenda, because they reduce business costs and generate sizeable economic activity in many business sectors. Siam Commercial Bank’s research says energy used for transportation accounts for 40% of Thailand’s total energy consumption.
The share is higher than in many countries, because Thai businesses rely mainly on road transport due to a lack of more energy-efficient alternatives, such as rail and water transport.
The launch of the Asean Economic Community (AEC), with its emphasis on speeding up trade, has prompted the Thai government to prioritize investment in connecting the domestic transportation network with those in bordering countries.
Leading Thai conglomerates, CP, Central and ThaiBev groups know that the planned megaprojects, now being implemented, integrate various modes of transportation including land (road and rail), air (airports), and water (seaports and river ports) and these new and improved networks will generate business opportunities in such industries as real estate, wholesale/retail and tourism.
Total investment plan for transportation infrastructure amounts to 2.2 trillion baht. Most of the budget comprises 1.9 trillion baht investment in railroad systems. The rest is investment in air and water transport totaling 0.3 trillion baht with the amount of budget disbursement to peak during 2017-2019 at 400-600 billion baht annually.
Just last week, The cabinet has approved the first phase of the 253-km Bangkok-Nakhon Ratchasima high-speed rail project, to be invested by the Thai Government and construction to be in three phases — Bangkok-Nakhon Ratchasima, Nakhon Ratchasima-Nong Khai and Kaeng Khoi-Map Ta Phut.
There will be six stations on the route — Bang Sue, Don Mueang, Ayutthaya, Saraburi, Pak Chong and Nakhon Ratchasima. The first 3.5 km to be built in October is the Klang Dong-Pang Asok section in Nakhon Ratchasima.
Late last year, the government also kicked off the construction of a 196 km motorway from Bangkok to Nakhon Ratchasima, which is part of the 535 kilometers long motorway that the government will build from Bangkok to Nong Khai from where it will connect with its ASEAN neighbors.
There will be nine toll gates on this 196 kilometer motorway at Bang Pa-in, Wang Noi, Hin Kong, Saraburi, Kaeng Khoi, Muak Lek, Pak Chong, Si Khieu, and Nakhon Ratchasima.
With the railroad projects coming into reality, land prices have gone up sharply along those routes especially in Pakchong and Nakhon Ratchasima, which is expected to be the main junction for the Northeastern region.
Krit Hiranyakrit of the Nakhon Ratchasima Property Association told Than Sethakij prices of land have gone up gradually since 2013 but risen quickly since last year when construction of motorway started.
Land around the Pakchong station (within one km) has gone up to 40 million baht per rai while prices of plots on Thanarat Road km1-4 in Khao Yai area have also gone up to 40 million baht per rai. Nearby the prices have gone up to 5-20 million baht.
He said in the future Pakchong District will be another high-end destination for residential and tourism spots, saying most of the land is now in the hands of major investors like CP and ThaiBev. Both Central and the Mall groups already have CentralPlaza Korat and the Mall Korat in Nakhon Ratchasima.
ThaiBev and TPI have also amassed more than 200 rai and 100 rai of the land along the rail routes respectively in order to be prepared for their warehouses which would be used as distribution and logistics centers.
On the Eastern side, the three provinces of Rayong, Chon Buri and Chachoengsao will serve as the country’s industry 4.0 area called Eastern Economic Corridor (EEC). High speed airport railways will be built to link Don Mueang, Suvanabhumi and U-Tapao international airports. All the three international airports are undergoing expansion to serve higher tourist number in the next 15-30 years. Alibaba and Airbus are among those interested in investing in the EEC.
With such grand expansion plan, prices of land in the three provinces especially in Rayong have gone up sky high.
Top: The Italian-inspired Primo Piazza in Khao Yai. Photo: Thanate Tan (CC-BY-2.0)
By Kowit Sanandang