The Cabinet's approval last week of a draft bill for Suvarnabhumi City will likely drive up property values around the new airport even more, but the benefits will accrue only to those big, well-connected developers that have already cornered most of the prime sites there, according to a source.

Real-estate prices could double if Parliament endorses the plan to set up a special body to administer the new aerotropolis, the source said last week.

"My friend told me that a politician's wife had bought 4,000 rai from a developer, which was pledged to Krung Thai Bank. The transaction was wrapped up in the first quarter of this year," he said.

Most of the area has fallen into the hands of prominent listed developers like Land & Houses, Quality Houses, Property Perfect, Supalai, LPN Develop-ment, SC Asset Corp, as well as investors with close ties to politicians. Among them are the Jungrungreangkit and Mahagitsiri clans.

The Mahagitsiris possess 200-300 rai along Bang Na-Trat Road, where Lakewood Country Club is located. The Jungrungreangkits also own about 500 rai in the area.

Somporn Juangroongruang-kit, sister-in-law of caretaker Transport Minister Suriya Jungrungreangkit and president of Thai Summit Group, said the group had accumulated the land 10 years ago in view of its potential for commercial and residential development.

"We bought the land a long time ago and it has nothing to do with the government's plan to promote the area as a new province," she said.

However, most investors started eyeing the area just a few years ago when airport construction was mostly complete.

"We bought land when the airport construction took shape. This is not related to the bill to set up Suvarnabhumi City," said Property Perfect director Teerachon Manomaiphibul.

If the bill is passed, the price of land in this location will double, as more infrastructure will be put in. But that will still take more than four years from now, he said.

The property market around Suvarnabhumi Airport started to heat up three years ago. A rai costing Bt1 million then can fetch Bt3 million now and probably much more in the future, he said.

Suphin Mechuchep, managing director of the local arm of Jones Lang LaSalle - an international property services firm - also said property prices had shot through the roof during the past three years, particularly along Km 2-20 of Bang Na-Trat Road.

The bill would further raise values, but it would also pose big challenges to developers looking to squeeze profits from their pricey assets.

"They need to wait for the city plan, which will specify what they can build and what they cannot. Indeed, there are many types of development that would take shape in the city, including residential areas, logistics areas, exhibition centres, business centres as well as the water management area," she said.

While drawing local developers to the vicinity, the airport has also attracted foreign investors, she added.

US-based TMW Asia Property Fund I just last week entered into a Bt4.7-billion joint venture with Ananda One Co Ltd to buy 400 rai near the airport, she said.

"We believe that when the master plan for Suvarnabhumi City is finished, this location will be a new magnet for investors. That will include residential and industrial developers," Suphin said.

The bill has ignited widespread controversy, with many parties questioning the move to turn the flood-prone area into a metropolis.

Wasant Khongchan, an executive of Agency for Real Estate Affairs Co Ltd, said the airport could push up property prices by two to four times, but land appraisals in some places north and south of the airport could drop.

"Residents in the north-south route, parallel to the runways, would learn after the airport starts commercial operations that the place is not a good residential site due to the noise pollution. Land values could drop by half or more," he said.

Architect Manop Bongsadadt said the neighbourhood would come in for overly rapid development, which is governed by many restrictions like landfills, and other improvements which could reduce the area's capacity to drain water from inner Bangkok.

Somluck Srimalee

The Nation