BANGKOK RESALE CONDO MARKET CONTINUES TO GROW

As the prices of new condominiums in downtown Bangkok have continued to rise, many buyers have begun considering resale, or second-hand, condominiums as an alternative to brand-new projects.  CBRE, an international property consultant, has seen an increase in demand for the existing second-hand market from Q4 2018.  As the prices of second-hand condominium units are often cheaper than those at newly-launched projects, buyers benefit from bigger unit sizes at more affordable prices. 

There are two types of resale units; those in buildings under construction where investors want to resell before transfer of title and those in completed ready-to-move-in units where the title has already been transferred to the original buyer.

According to the survey by CBRE Research, the total supply of completed condominiums as of Q3 2018 in downtown Bangkok was 145,350 units, with prices ranging from THB 55,000 – 350,000 baht per sq.m., depending on the grade and age of the condominium, and how well the building has been maintained.  The selling price of newly-launched condominiums in downtown Bangkok in the luxury grade now ranges from THB 300,000 - 600,000 per sq.m., which generally have smaller unit sizes than older completed buildings.

Ms. Pornpimol Phuengkhuankhan, Head of Advisory & Transaction – Residential Sales Ad Hoc, CBRE Thailand said the market for resale-before-completion units is more active right after launch if the project sells out and there are no units left for sale by the developer.  During construction, uncompleted units’ resale activity tends to drop and picks up again as the project nears completion.

In terms of payment, purchasers pay the seller the amount that has already been paid to the developer together plus the seller’s profit. The original sales and purchase contract is then assigned to the new buyer who takes all responsibility for any future payments to the developer. For most high-end properties in the central business district (CBD), the payment terms offered by developers are 10% on signing a sales and purchase contract, and 10-20% during the construction period with the balance paid on transfer of title at the completion of construction. The amount that the new purchaser must still pay to the developer depends on how many monthly down payments remain before transfer of title.  It is important to note that the developer must sign the assignment agreement as well as the seller and purchaser for the contract transfer to be valid.

The key considerations for the purchaser are the reputation of the developer and the track record of their ability to deliver the quality described in the sales material.

For a completed building, the sale process includes signing a standard sales and purchase contract, usually with a deposit equivalent to ten per cent of the price, and transfer of title at the Land Department 30-60 days after signing the sale and purchase agreement. The balance of the price is payable to the seller at the Land Department on transfer of title.

The key considerations for purchasers of units in an older building are how good the original construction quality was, how well the building has been maintained, and the current financial status of the condominium juristic office, an entity jointly contracted by all co-owners that manages the common areas of the property as well as provides building maintenance.

Since the passing of the original Condominium Act in 1979, most Thai buyers have preferred new buildings, buying units off plan from a developer or a resale unit from an investor just before completion, rather than buying second-hand completed properties.

“However, since the price difference between new launches and older, completed properties is now becoming so great that buyers who want a unit to live in are looking increasingly at existing developments as new developments are priced beyond most Thai buyers’ budgets. Buyers are increasingly willing to give up the prejudice against previously occupied condominium units in return for the ability to buy a larger unit for their money,” added Ms. Pornpimol.

There is a wide range of quality among existing developments with some old projects being as good as new properties while others were poorly built originally and/or have been poorly maintained.  Buyers looking at existing buildings should do due diligence on the construction quality and condition of maintenance as well as gain understanding of the financial situation of the juristic office of the building in order to gain an insight into the probability that the building will be well maintained and appreciate in value in the future.  

The Sukhothai Residences - A Good Example of Well-maintained Property

We’re expanding!

ISB is now enrolling children from 3 years old

Research shows that children are more successful in school and beyond if they are provided with a strong foundation in the earliest years of their lives. For the past couple of years, International School Bangkok (ISB) has been considering an expansion of the learning we offer to younger children so that we can provide them with the ISB standard of education at this fundamental time of their development. We are very excited to announce that from the 2019 - 2020 school year, we will now be taking this important step.

A decision was made to offer admission to 3 year old children at International School Bangkok, beginning August 2019. We will be adding one section of students to our Pre-Kindergarten/Kindergarten quad, and they’ll embark on the same journey of Reggio Emilia inspired discovery, creativity, collaboration and developmental learning that all our young panthers in the Early Childhood program enjoy. We will be renovating the playground and other supporting facilities to cater for this younger group of learners.  

We believe that ISB can provide a strong foundation, which can lead to more success for learners throughout their school experience. Here are a few reasons why:

·  Our programs allow for personalized learning based on developmental readiness

·  Our innovative learning space allows for intentional centers with small groupings and collaboration with other age groups

·  We offer a safe and nurturing environment where curiosity and exploration are cultivated

· We provide guided discovery and unstructured play both inside and outside of the classroom so that children can create and solve authentic challenges

· Children are given the freedom to creatively choose much of their learning paths

· We have the highest quality teachers in each classroom

· There is collaboration with children of other age groups

· We structure rich language experiences so that children develop in their oral expressions and vocabulary

For more information email admissions@isb.ac.th or visit http://www.isb.ac.th/.

Over the last ten years Regents has established an extensive network of partnerships with community groups operating in and around Pattaya, across the rest of Thailand and around the world.

Every Year Group in our school is associated with a Community Partner, from Early Years right the way up to Year 13. Amongst those Community Partners we count the Baan Maelid Karen Hill Tribe, Women with a Mission, the Love Wildlife foundation, Kate’s Project Trust, The Father Ray Foundation, Sotpattana School for the Deaf, the Mechai Pattana School, and many more.

These relationships are not one-sided. The partnerships are a sharing of knowledge and understanding between two groups which come from very different backgrounds. Community Partnerships and the service-related experiences which they involve develop in our students an understanding of and appreciation for responsible citizenship and other valuable social and emotional life skills.

The partnerships have led to many exceptional student-centred projects over the last decade, including:

• An on-going project to build a community centre for the Sea Gypsies on the island of Koh Phi Phi
• A conservation project with the Elephant Nature Park in Chiang Mai
• A project with charity Women with a Mission to promote traditional sewing and weaving skills amongst displaced Burmese women in MaeSot
• A community development project with the Baan Maelid Hill Tribe School in Mae Hong Son
• On-going work with the Abundant Life Centre in Bang Saen, a home for children with HIV.

SHREWSBURY TOPS CIE AWARDS

In recognition of their outstanding examination scores at (I)GCSE, AS Level and A Level, students at Shrewsbury International School Bangkok Riverside will receive no fewer than 29 Cambridge Outstanding Learner awards at Cambridge International Examination (CIE) Board's official annual prize giving ceremony later this month; the second highest number ever achieved by the school.

In addition to the “Best Across 8 IGCSEs” award for Tarnfun (Tara) Chattmittrapap, Shrewsbury students earn more awards than any other school in every other awards category; 12 High Achievement awards, 12 Top in Thailand Awards and 4 Top in the World awards for the highest individual marks in different CIE subject examinations.

This year’s four Top in the World awards are shared between two subjects where performances are consistently very strong at Shrewsbury. Lauren Storah and Boonyavee (Prin) Wongwisetsuk earn their accolades as world leaders in Mathematics (IGCSE), whilst Top in the World awards for artists Athisaya (Tonnam) Vasikanond and Natcha (Kaimook) Pakdeekitcharoen mean that Shrewsbury students have 15 Top in the World awards for Art & Design since 2004. In the school’s 15 year history, Shrewsbury students have won 35 Top in the World awards and 234 CIE awards overall.

An all-round talent, Kaimook’s Top in the World award serves as further recognition for her outstanding AS level project portfolio inspired by meditation practices, and which attempts to capture the ephemeral beauty of reflections in water.  “I was never expecting to win an award, and it certainly wasn’t something I was specifically aiming for”, explains Kaimook, “but I’ve really been enjoying my art classes. It’s like a little family up there [in the art department] and we really feed off each other creatively. That’s reflective of the atmosphere across the school really. We gain a lot from being around supportive staff and other students with great ideas, and most of all, we have a lot of fun learning together.” Kaimook, who shares her passion for art in the community by volunteering for a charity for blind artists, is currently applying to several top flight US Art Colleges, including Rhode Island School of Design, with the aim of one day becoming a professional graphic artist.

Former Head Girl Pimmara (Pimmy) Soongswang -now at University of Cambridge – makes the CIE list for the second time with a Top in Thailand award for A level Biology  that follows her 2017 Top in the World AS Level award in the same subject.

Meanwhile, Kochakorn (Mint) Buasri, (now studying Medicine at Mahidol Ramathibodi) adds to her 2017 Top in Thailand award in AS Level Economics with the same award at A Level. Mint was also winner of Best Across 8 IGCSEs award and Top in Thailand IGCSE Maths in 2016.

Whilst their university commitments may mean that neither Pimmy or Mint are able to attend the CIE awards ceremony, one new Shrewsbury recruit, Melanie Utharntharm, will almost certainly be in attendance to pick up her Top in Thailand award for IGCSE Computer Science. Melanie studied for her IGCSE exams at a different international school in Bangkok, but, like an increasing number of her peers, has chosen to join Shrewsbury’s highly successful Sixth Form programme, supported by unparalleled Higher Education counseling, to help her achieve her ambitions of reaching a top flight university.

Adding his personal congratulations to the award winners, but also reflecting on the achievements of the entire examination cohort, Shrewsbury Riverside Principal, Chris Seal comments, “These awards are fantastic and richly deserved recognition for a group of truly exemplary Shrewsbury students, past and present. Our examination results across the board were again outstanding this year, with 70% A*/A at A Level, and 69% A*/A at GCSE”.

Mr. Seal continues, “The results have been earned by remarkably talented and dedicated individuals, whose passion for their academic area is unwavering. Their grades are evidently outstanding, but I also wish to draw attention to the variety of ways in which our students inspire each other (and their teachers), every day. The British curriculum allows learners to explore their academic passions in real depth, and in doing so, establishes a spirit of inquiry that has fomented a Shrewsbury culture of academic leadership, collaboration and ultimately, of unparalleled success. My congratulations to all of our CIE winners; you are inspiration to us all”.

BLCP Received “Outstanding Labor Relations and Labor Welfare Award” (5 consecutive years) Year 2014-2018

BLCP has been honorably awarded “Outstanding Labor Relations and Labor Welfare Award” (5 consecutive years) organized by Department of Labour Protection and Welfare, Ministry of Labour at Rayong Labor Protection and Welfare Office.

EDOUARD DEMPTOS APPOINTED AS NEW GENERAL MANAGER

AT GRAND HYATT ERAWAN BANGKOK

We are pleased to announce that Edouard Demptos has joined Grand Hyatt Erawan Bangkok as General Manager in November 2018. Prior to moving here, Edouard worked as Hotel Manager at Grand Hyatt Singapore.

Born and raised in Bordeaux, France and a graduate of the Glion Institute of Higher Education in Switzerland, Edouard joined Hyatt Hotels & Resorts in 2004 and has since worked in Morocco, Spain, The Philippines, China and Singapore.

Edouard arrived in Asia in May 2009 as Director of Food & Beverage at the Hyatt Hotel & Casino Manila and subsequently joined Hyatt on the Bund in April 2011 as Director of Food &

Beverage and was later promoted to EAM-Food and Beverage and Hotel Manager. In June 2016, Edouard joined Grand Hyatt Singapore as Hotel Manager. In his free time he enjoys travelling in Asia, tasting wines and trying out new locally inspired restaurants. 

Grand Hyatt Erawan Bangkok is thrilled to have Edouard joining the team, Edouard’s global experience, international knowledge and food and beverage expertise will contribute to pursue our goal of maintaining Grand Hyatt Erawan Bangkok’s leadership position and continue to be the best business hotel in Bangkok and in the region.

“I am delighted to join the Grand Hyatt Erawan Bangkok family, move to another vibrant, iconic and exciting property and work closely with such an experienced and engaged team” says Edouard Demptos.

Cabinet Postpones Dual-Use Items Regulation until 1 January 2020

Following our previous client alert in which we announced that the effective date of the Ministry of Commerce Notification Regulating the Dual-Use Items (“Notification”) issued on 16 October 2015 under the existing Export and Import of Goods Act B.E. 2522 (1979) was postponed until 1 January 2019, the Cabinet approved in principle on 18 December 2018 to further postpone the effective date of the Notification for another year to 1 January 2020. 

The rationale for this postponement is consistent with the previous decision to hold back on issuing regulation, which is to update the list of goods that are considered dual-use items (“DUI”) to accurately reflect the EU Dual-Use Item List 2017, as well as updating the Harmonized System Codes to be used for goods that may be considered as DUI to be the latest version. Moreover, the current e-Trade Management of Dual-use Items, which is being developed by the Ministry of Commerce as an online hub for granting export licenses and for self-certification by operators, is still yet to be completed. 

The Thai government is now shifting its focus to the draft Trade Control on Weapons of Mass Destruction Related Items Act ("Draft Act"), which is aimed to eventually replace the Notification in its entirety. The Draft Act is currently under the consideration of the National Legislative Assembly. 

We will keep you informed of any other developments with regards to laws and regulations concerning DUI.

Cancellation of Investment Promotion Scheme for IHQ and ITC

To be in line with the Revenue Department's policy to promote International Business Center ("IBC"), Thailand Board of Investment ("BOI") has repealed its investment promotion policy to promote International Headquarters ("IHQ") and International Trading Center ("ITC") businesses and replaced them with a new investment promotion scheme for IBC.

The IBC under BOI is essentially the combination of IHQ and ITC schemes. The activities that an IBC can undertake for associated enterprise are as follows:

1. General business management, business planning, and business coordination;

2. Sourcing of raw materials and parts;

3. Research and development of products;

4. Technical support;

5. Marketing and sales support;

6. Human resources management and training;

7. Advisory relating to finance;

8. Economic and investment analysis and research

9. Credit control and management;

10. Treasury center;

11.  International trading center; and

12. Any other business as announced by the Revenue Department.

As per the previous IHQ and ITC schemes, the BOI will only provide non-tax incentives to investors, which include work permits for foreign experts and technicians and land ownership for operation of IBC businesses.

To qualify for investment promotion from the BOI as IBC, the IBC must meet the following criteria:

1.  A registered capital of at least THB 10 million; and

2.  At least ten employees working in the IBC or five employees if the IBC is only to provide services relating to financial management.

However, as the IBC is still a new scheme, no written guidelines exist and the BOI has yet to offer any official clarification on specific details of the scheme.  Nevertheless, we expect it to be similar to that of IHQ and ITC.

NLA Approves Draft Amendment to LPA

On 13 December 2018, the National Legislative Assembly ("NLA") approved the draft amendment to the Labour Protection Act (“Draft”). The Draft will be submitted for endorsement by His Majesty the King and, subsequently, published in the Royal Gazette before it becomes effective.  It is expected that the Draft will become effective sometime late January or early February 2019, though no specific timeline has been set as of yet.

At this stage, since the Draft has only been approved recently, its final text has not yet been released to the general public. However, we do not expect substantial changes to the Draft from the original version proposed to the NLA in August 2018.  

Below are summaries of the main revisions to the current Labour Protection Act ("LPA") based on the August 2018 version of the Draft:

• The maximum rate of severance will no longer be capped at 300 days of the employee’s latest wage rate for employees with ten or more years of service. A new maximum severance rate will now be capped at 400 days of the employee's latest wage and apply to employees with 20 or more years of service.
  

• Business leave of at least three days per year with pay has now been set as the minimum number of business leave days for all employees.                                                                                                                                                                                                                                                                 Currently, the LPA only requires that employers arrange for a certain number of days of business leave for the employees with or without pay as the employers deems appropriate.                                                                                                                                                                   The Draft is still silent on the definition of business leave, and employers are still free to set definition of business leave and its scope as deemed appropriate.
•  Maternity leave has been clarified to include leave taken to visit doctors for pre-natal care. 
  

•  Maternity leave will now be capped at 98 days per pregnancy inclusive of holidays, an increase from 90 days under the current LPA.
  

•  Wage and "other money which an employer is required to pay under the LPA" must be paid within three days from the termination effective date.                                                                                                                                                                                                                        -  While no further clarification is provided, it is possible that this "other money which an employer is required to pay under the LPA" could also include severance pay. This would mean severance pay must be paid within three days from the effective date of termination. If this is in fact the case, it could be seen as a move away from the current precedent that severance pay must be paid on the effective date of termination.
  

•  An interest rate in the case of employer defaulting on the below payments will be 15%, an increase from the current 7.5%;                                                                                                                                                                                                                                                                            –  Payment in lieu of advance notice; and                                                                                                                                                                           –  Payment in the case that the employer has to temporarily cease its business operation.

• Change of employer, or merger and/or acquisition between the employer and another party that results in any employee becoming an employee of a new employer will require the employee's consent and the new employer must assume all existing rights and obligations of the previous employer. This could include all cases of transfer of employment, merger and acquisition, and amalgamation.
  

•  Payment in lieu of advance notice must be paid upon the effective date of termination.
  

• If an employer is relocating its premises, whether the new premise is an existing or a new one, the employer must announce the name of employees, new business premise and the relocation date to the employees in a public area of the current business premise where all employees are able to notice the announcement clearly, not less than 30 days before the relocation date. If an announcement is not made, special severance pay in lieu of advance notice must be paid to employees who refuse to be relocated.                                                                                                                                                                                                                                                                                               - The obligation to announce the relocation of the business premises and the affected employees in a public area of the current business premise has only been introduced in this current Draft. 

• Employees whose normal living or whose family's normal living will be substantially affected by the employer's relocation of its business premises, whether the new premise is an existing or a new one, are entitled to refuse to move to the relocated premise by sending a written notice to the employer within 30 days of the announcement date. The employment agreement shall be considered to have ceased on the relocation date and the employee shall be entitled to special severance pay. 
  

• Employers are required to make the special severance pay or special severance pay in lieu of advance notice to the employees within seven days from the cessation date of the employment agreement.
  

Due to the substantive changes to the current LPA and the amended provisions under the Draft still being relatively new, it remains to be seen how each provision within the Draft will be interpreted and implemented by officials and courts in practice. It is essential that employers carefully study the Draft regulations to ensure their employment policies are consistent with the Draft regulations, especially in areas where the Draft may distinguish from existing court precedents, for example, in mergers and acquisitions where an employee’s consent is required and a new employer must assume all existing rights and obligations of the previous employer.

Linklaters named European M&A Legal Adviser of the Year by Mergermarket

Linklaters has won European M&A Legal Adviser of the Year at the annual Mergermarket European M&A Awards. The award is given based on analysis by Mergermarket of the overall value of transactions and overall volume of deals advised on by the firm over the past twelve months. 

The Mergermarket awards recognise the achievements of advanced advisory services on transformative deals and complex transactions. Notable deals on which Linklaters have worked on this year include Takeda Pharmaceutical Company in its £46bn recommended offer for Shire plc – one of the largest pharma companies in Europe, the largest ever outbound M&A deal by a Japanese company and the largest global public M&A deal this year. 

Further across Europe, Linklaters also advised Chariot Top Group, a company represented by Griffin Real Estate, on a real estate portfolio acquisition comprising 28 shopping centres across Poland and the subsequent resale of 12 properties from this portfolio to EPP. This transaction was one of the largest ever real estate portfolio transactions in Poland and the CEE region amounting to €1.7bn. It involved our Warsaw, London, Luxembourg and Amsterdam offices.

Other deals of note include Ablynx on its public takeover by Sanofi worth €3.9bn, its largest transactions in the past five years and the largest Belgian biotech deal ever. Linklaters also acted for PAI Partners on its announced potential public takeover of Ontex Group valued at €2.4bn which would be the largest acquisition by a private equity firm in Belgium for the past 10 years. In the UK, another notable deal is the J Sainsbury plc £15bn merger with ASDA Group Ltd, a wholly owned subsidiary of Walmart Inc.