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AEC will pose challenges for developers

By on Jun 02, 2012 in Property News

Companies will have to focus on quality and international standards to expand within Asean

Architects, engineering and construction raw-material manufacturers, as well as related business, will have to revise their standards when the Asean Economic Community (AEC) becomes effective in 2015.

Former president of the Association of Siamese Architects under Royal Patronage, Taweejit Chandrasakha, said the AEC will directly affect the property sector and related business especially in security standards for residences.

“Earlier, when we built residences, we were concerned about design, functionality, and the direction. But under the AEC, we have to be concerned about the raw materials to build safe houses,” he said.

For example, when architects select floor tiles, they are interested only in the design. Under the AEC, architects will have to follow the standards of the Asean Architects Council.

Meanwhile, other rules for architects and property developers will also be set as per international standards so that when they expand their work or investment in AEC countries, they will have the same standards for building and safety.

“Thai contractors, property developers, home-builders, architects and engineers will have to learn the rules and international standards when they expand into AEC member countries,” he said.

Property firms, home-builders will have to study the rules regarding building construction in each country and be concerned about the quality of the products they use to ensure the security of the people who use their buildings.

The design and construction process will be evaluated by experts to ensure safety standards. Companies that can develop their systems to meet the standards will be the ones to benefit from the AEC. If they do not make this investment, they will find themselves facing heavy competition not only from domestic players but from elsewhere in Asean as well, he said.

Prasong Tharachai, former president of the Engineering Institute of Thailand, said the AEC would bring pluses and minuses for the construction business. The most obvious benefit is that the market will be bigger, but at the same the AEC will also open up the Kingdom’s market to foreign firms that can meet regional standards in engineering, architecture and construction.

However, property firms believe that AEC will provide business opportunity for them to expand investments in Asean countries, and also create new demand for residences at home as they believe most Asean business persons would opt to buy a second residence in Thailand.

Pruksa Real Estate chief executive officer Thongma Vijitpongpun said the company was interested in investing in AEC countries, especially Indonesia, Malaysia and the Philippines, which have the population base to support demand. However, the company will wait to learn about the legal requirements before developing residential projects in each country, he said.

Land & Houses senior vice president Naporn Soonthornjitcharoen, who had the experience of investing in the Philippines and Indonesia more than 15 years ago, has said his company also would take time to study the legalities of regional investment after the AEC goes into effect, and base its decisions on what the challenges are.

SC Asset Corporation chief operating officer Kree Dejchai said Thailand’s market will not be affected by the AEC because it would be difficult for foreign developers to expand into this country.

He added that the AEC will challenge local property firms to develop residential projects in Thai resort destinations as investors from Singapore, Malaysia, Brunei and elsewhere require a second home in this country. That is why SC Asset is interested in expanding investments in resort destinations, focusing on both local and foreigners’ demands.

Supalai managing director Atip Bichanond said there would also be demand in destinations close to neighbouring countries, such as Udon Thani province.

“We are interested in expanding our investment in Udon Thani to serve both locals and foreigners who marry Thais, and foreign investors who will use that province as a gateway to Laos,” he said.

Other listed companies are also interested in investing in Udon Thani province, such as Land & Houses.

Source : The Nation 1 June 2012

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