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British embassy land up for sale
Robin Richards Umesh Pandey
http://www.bday.net/detail.asp?id=57398
The British government is going ahead with a major redevelopment of its Bangkok embassy – which would see a huge chunk of its prime land on Ploenchit Road in the heart of Bangkok up for sale.
Ambassador David Fall said that the plans to sell four acres, or about nine rai, of the present 12-acre site, were “an open secret”, even though there has been no formal announcement and the deal is waiting for the go-ahead from London. The scheme could be delayed or even postponed by the softness in the Bangkok property market or by the firmness of sterling.
In the meantime, a London firm has been commissioned to design new housing to accommodate embassy staff who would be displaced by the sale of the Ploenchit Road front. This is evidence of the advanced planning for the redevelopment and sale.
Major Thai property developers are undoubtedly licking their lips at the prospect of such a prime site being up for sale. One back-of-the-envelope estimate was that such a big plot might fetch close to 2 billion baht. However, big developers consulted by Business Day considered that it would be difficult to make money in redeveloping the site if it fetched such a high price.
Most property specialists are currently bearing on Bangkok property, especially on the residential sector, described as being in a state of structural oversupply. Nevertheless, there are so few remaining large parcels of land available in the central business and commercial area of Bangkok that the British embassy would command a premium even on premium prices.
Srettha Thavisin, president of Sansiri Plc, told Business Day that the British embassy site was such prime land that “we would be interested to take up the land in any market situation, even if it goes down”. Because it was close to the BTS Skytrain, it was eminently suitable for commercial and residential development. He estimated that it would fetch close to 400,000 baht per square wah, which would put a price in the region of 1.5 billion baht for the proposed sale.
Naporn Soonthornchitchareon, chief operating officer of Land and Houses Plc, added that the USIS site on Sathorn Road fetched 260,000 baht per square wah at an auction recently, so a price of 500,000 per square wah would be on the upper end of the expected price range. However, he added that “there is no other piece of land of that size in [or] around that area”.
The outline plan would see the Ploenchit Road side of the British embassy sold from the iron gates bearing the royal coat-of-arms almost to the feet of the statue of Queen Victoria, ambassador Fall said. The war memorial and the massive flagpole that is two ships’ masts high would both have to be removed, along with buildings within the spacious tree-lined compound. Queen Victoria might not be amused, but her effigy would also have to find a new place, added Fall. The ambassador’s gracious residence within the complex would be safe.
British embassy staff in Bangkok are unsure when the go-ahead will be given because that decision will be taken by the Foreign Office in London. One factor is the Bangkok property market, on which outside consultants are giving advice. But another is the strength of sterling. The British pound is today worth almost 75 baht, whereas a few months ago it was closer to 60 baht. This means that the money that will be remitted from the sale of the land is worth less in sterling.
Taking that notional 2 billion baht, at today’s rates the sale of the land would fetch just over £26.6 million, whereas, at 60 baht to the pound, the Foreign Office would have realised £33.3 million. The money will go to London to be used for building or refurbishing other British embassies, which is presumably why the British government has decided to sell a chunk of its Bangkok land rather than to lease it, as some bankers have advised.
The British embassy, then a legation, moved to the present site on the corners of Ploenchit and Wireless Road in 1926, having acquired the site for £110,000 in 1922 from the sale of the previous legation on the river next to the Portuguese consulate. At the time of the move to Ploenchit-Wireless Road, the British authorities were criticised for going to such a remote and – at that time – rural spot. The flagpole, ordered from Hong Kong at the “extravagant” cost of £500, was moved from the old legation, along with Queen Victoria. The war memorial was the first structure on the new site, erected in 1923.
During the second world war, the statue of Queen Victoria was boarded up, but the Japanese provided a peephole, so that the old queen would not be too upset. The British legation became an embassy in 1947.
Originally Posted by Bangkok Phil
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