In Laos, Luxury Market Takes Flight
The Emperor House Co Ltd, the Thai builder of luxury homes, has teamed up with Laotian conglomerate the Insee Group to tap the luxury self-built home market in Laos, expecting to sell two houses worth almost 120 million baht this year.
Suratchai Kuenghakit, managing director of The Emperor House, said Laos’ economic potential is strong, with foreign direct investment of US$15 billion last year, up from $3.4 billion in 2011.
The company and its Laotian partner set up a 50:50 joint venture, called The Emperor House by Insee Group, in Laos with registered capital of 5 million baht.
The company’s Thai houses average 80 million baht, with the maximum price surpassing 300 million for a usable area of 2,800 square metres.
Marketing, advertising and sourcing labour will be handled by the Insee Group, which runs construction, tourism, hotel, apartment, insurance and microfinance businesses in Laos along with one of its two lottery concessions.
Manotham Phetsiliseng, deputy director of the Insee Group, said the Laotian government is boosting people’s salaries each year until 2015 including by 1.5 times in both 2012 and 2013, thereby boosting local purchasing power.
“Housing demand in the luxury segment exists mainly in Vientiane,” said Mr Manotham during a visit to Bangkok yesterday.
He said the average house price for the Laotian luxury segment is $2 million or 59.8 million baht.
“Labourers’ wages are lower in Laos than in Thailand, 150-250 baht a day [against 300 baht in Thailand]. But construction materials must be imported, so construction costs actually come out at 10-15% higher than in Thailand,” said Mr Manotham.
One of those is in Vientiane and belongs to a construction business owner. It cost 100 million baht including decorations.
The other one is in Champasak province in the South and belongs to the owner of the Dao-Heuang Group, one of the largest conglomerates in Laos. It cost 50-60 million baht.
The Emperor House earned revenue of 303 million baht last year, missing its target by 10% due to a labour shortage. It expects revenue of 340 million baht this year.
Source: Bangkok Post