Shophouse construction costs

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04-03-2010, 06:06 PM
Gerbil

Shophouse construction costs

I'm looking at a project which will involve building 10 two story shophouses (2 rows of 5 back to back).

These are intended for rental (7,000 - 8,000 a month each).

Very basic construction.

each would be 4 meters by 8 meters - downstairs would be open area with a staircase and a Thai style bathroom (under the stairs?), upstairs would be two bedrooms. The roof would be flat concrete slab construction and access to the roof is also needed via an upstairs staircase.

Any idea of very rough construction costs?
04-03-2010, 06:30 PM
Norton

Quote:

Originally Posted by Gerbil

Any idea of very rough construction costs?

3.5 million baht.
04-03-2010, 06:35 PM
dirtydog

Nearer 4 million I reckon.
04-03-2010, 06:46 PM
Gerbil

Oh bugger.

These are real low end units dont forget?

Cant be that expensive to build units which are basically 2 concrete boxes on top of each other?

They dont need to last forever as the master lease on the land will be 30 years. (In fact they could fall down after 20 years or so as far as I'm concerned :))

Actually, eventually there would be 80 units in total, I'm just looking at doing it in phases at the moment.
04-03-2010, 06:49 PM
Chairman Mao

4 million baht returning just under a million per year. Something doesn't add up. (possibly my maths :) )

Unfortunately the amount of these rows of town houses that you see abandoned in every town/suburb in Thailand would be a major part of what would put me off such a venture.
04-03-2010, 06:52 PM
Norton

You have 64 sq meters/unit times 10 units. 640 sq meters. I used 5,000 baht per square meter which is not hi so construction costs. Do the math.;)
04-03-2010, 06:54 PM
Gerbil

^^ shop houses, not town hoses.

Low rent and a good location. Should be a winner :)
04-03-2010, 06:55 PM
chitown

Quote:

Originally Posted by Chairman Mao

Unfortunately the amount of these rows of town houses that you see abandoned in every town/suburb in Thailand would be a major part of what would put me off such a venture.

And the fact that they rent for more like 3k to 5k a month.
04-03-2010, 06:56 PM
dirtydog

Quote:

Originally Posted by Norton

I used 5,000 baht per square meter which is not hi so construction costs.

We aint all in the jungles of Isaan, he has to reckon on 6,000baht per square meter.
04-03-2010, 06:58 PM
Gerbil

Quote:

Originally Posted by Norton

You have 64 sq meters/unit times 10 units. 640 sq meters. I used 5,000 baht per square meter which is not hi so construction costs. Do the math.;)

Wouldn't that be more for residential construction costs though e.g. tiled floors, suspended ceiling, etc? I'm not planning for any of those luxuries :)
04-03-2010, 06:59 PM
Gerbil

Quote:

Originally Posted by dirtydog

Quote:

Originally Posted by Norton

I used 5,000 baht per square meter which is not hi so construction costs.

We aint all in the jungles of Isaan, he has to reckon on 6,000baht per square meter.

Uhm. Yeah, forgot to mention area - This is in the Rangsit area, but out towards the ring road.
04-03-2010, 07:01 PM
Norton

Quote:

Originally Posted by dirtydog

We aint all in the jungles of Isaan

Oh yeah, there is that complication. Ok 6,000 baht plus 10% for the BiB to protect it from "vandals".

4.2 million baht it is then.
04-03-2010, 07:02 PM
Gerbil

Hmmmm.... back to the spreadsheet. :)
04-03-2010, 07:05 PM
Norton

Or back to work.:)
04-03-2010, 07:13 PM
Gerbil

Quote:

Originally Posted by Norton

Or back to work.:)

yeah. :)

returns still look pretty healthy though.
04-03-2010, 07:16 PM
Chairman Mao

Do completely unfurnished shophouses go for 8k a pop out that way?

Obviously do if you've gotten this far into it.

You're confident that the demand for each one will be constant for the next 20/30 years?
04-03-2010, 07:19 PM
Norton

Quote:

Originally Posted by Gerbil

returns still look pretty healthy though.

Could be if you can keep them all rented. Why build 10? Start with 3 and see how well they rent. If they stay fully rented you can add a couple more. If they are a complete flop you haven't invested as much.
04-03-2010, 07:21 PM
Gerbil

Quote:

Originally Posted by Chairman Mao

Do completely unfurnished shophouses go for 8k a pop out that way?

Obviously do if you've gotten this far into it.

According to my wife they do..... But I'm not so sure. I think it may be lower, so I've hacked 40% off in one of my projections.
04-03-2010, 07:24 PM
Gerbil

Quote:

Originally Posted by Norton

Quote:

Originally Posted by Gerbil

returns still look pretty healthy though.

Could be if you can keep them all rented. Why build 10? Start with 3 and see how well they rent. If they stay fully rented you can add a couple more. If they are a complete flop you haven't invested as much.

I was assuming I could get a better price from the builder when dealing in quantity. Plus it will look more attractive to potential shop owners if there are more of them?
04-03-2010, 07:25 PM
Chairman Mao

Interesting stuff.

Norts has some good ideas.

I wouldn't mind throwing some money into something like that sometime. (money that can be lost without too much heartache. :) )

Quote:

Ok 6,000 baht plus 10% for the BiB to protect it from "vandals".

This true Norts?
04-03-2010, 07:27 PM
Gerbil

Quote:

Originally Posted by Chairman Mao

You're confident that the demand for each one will be constant for the next 20/30 years?

No. :) That's why I'm looking for a good return as quick as possible. If necessary I can flog the 'management company' then if I think there'll be a downturn. :)
04-03-2010, 07:30 PM
Norton

Quote:

Originally Posted by Chairman Mao

This true Norts?

Naw. Just a slap at DD, a Pattaya resident, slagging my "jungle " Isaan location.
04-03-2010, 08:04 PM
Gerbil

Anyway, still very speculative at this stage - if I do go ahead with it, there'll be a picture thread. :)
04-03-2010, 08:16 PM
jandajoy

Location, location, location.

I looked at investing in a similar project in Ban Chang a couple of years ago. Fortunately I didn't.

They built a bunch but then potential renters started haggling.

The original asking price of 10,000 a month dropped to 3.

Post construction they were on offer at 2000 bht a month.
04-03-2010, 08:38 PM
chitown

Quote:

Originally Posted by Gerbil

Quote:

Originally Posted by Chairman Mao

Do completely unfurnished shophouses go for 8k a pop out that way?

Obviously do if you've gotten this far into it.

According to my wife they do..... But I'm not so sure. I think it may be lower, so I've hacked 40% off in one of my projections.

Depending on if it is right on the main road or not. What road are you talking about?

I know there are several in my mooban for 3k to 5k. I know you are talking a shop house and not a townhouse although I do not see the difference in them.
04-03-2010, 08:56 PM
Gerbil

It's right on the main road, close to a major intersection on the ring road with nearby large housing estate developments (with houses on those ranging from 2 - 10 million baht)

The shophouse vs townhouse aspect is important because the tenants will be looking for a place to make their living out of, rather than just to live in. So it's aimed at lower income people, who before probably lived in a slum/shack area and had a market stall, but have made enough to move upmarket a bit,
04-03-2010, 10:12 PM
blackgang

Apperrs to be a lot of them being built over here on Hiway 21 and a lot of them have been vacant since I mover over here 9 years ago.
seems to be plenty of them.
05-03-2010, 08:08 AM
aras

according to your wife you say ? watch out you don't wanna be the next guy getting your crimewatch minutes for a few hundred pounds ..........

If you can take the risk why not i would say....have fun
05-03-2010, 08:37 AM
Carnwadrick

6.000 Bt x 10 x 12 = 720,000 Bt year - 30% vacancy, management & maintenance =504,000 ,construction cost 4 million Bt = 12.6% return on investment, oops forgot cost of land no I didn't you didn't mention it. the margin seems kinda tight
05-03-2010, 12:24 PM
DrAndy

Quote:

Originally Posted by Chairman Mao

4 million baht returning just under a million per year. Something doesn't add up.

Quote:

Originally Posted by Gerbil

returns still look pretty healthy though.

agreed, get your money back in 6 years, adding on extras and needing to pay tax on the rental
10-03-2010, 02:56 AM
SunTzu

Quote:

Originally Posted by Norton

You have 64 sq meters/unit times 10 units. 640 sq meters. I used 5,000 baht per square meter which is not hi so construction costs. Do the math.

Didnt Gerbil say 8 x 4 meters/unit ?
In which case, your building cost is : 32sqm x 10 units = 320 sqm x 6000 = 1 920 000 B

Dont listen to these old fags, they're trying to mess up your mind to get the job and charge you more ;)
10-03-2010, 05:44 AM
helge

The old fags are talking 2 storeys
10-03-2010, 12:27 PM
Norton

Quote:

Originally Posted by Gerbil

I'm looking at a project which will involve building 10 two story shophouses (2 rows of 5 back to back).

Quote:

Originally Posted by Gerbil

each would be 4 meters by 8 meters - downstairs would be open area with a staircase and a Thai style bathroom (under the stairs?), upstairs would be two bedrooms. The roof would be flat concrete slab construction and access to the roof is also needed via an upstairs staircase.

Quote:

Originally Posted by SunTzu

Dont listen to these old fags, they're trying to mess up your mind to get the job and charge you more

Yes listen to the young fags who are reading impaired.:)
10-03-2010, 12:31 PM
SunTzu

Errrr, sorry, guess I shouldn't post too late at night...:rolleyes:

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