BANGKOK – According to a preliminary appraised value of the working group appointed by the government, which was appraised at Baht 3.9 billion, the Skyy9 Social Security Building invested Baht 6.9 billion, and two valuation firms appraised around 7.5 billion baht.
What are the lessons learned?
What will the future of commissioning valuation firms be like after the Skyy9 building? And what measures should the Securities and Exchange Commission (SEC) and related parties take?
Dr. Sopon Pornchokchai, President, Agency for Real Estate Affairs and President, Thai Appraisal & Estate Agents Foundation, was appointed by the government’s fact-finding committee to be the head of the working group to deliver preliminary comments on the value of investment in the Skyy 9 Building owned by the SSO. He has concluded and made critical policy recommendations.
About the Skyy9 SSO Building
Dr. Sopon, as the head of the working group, found that;
Firstly, the Skyy9 building has been registered as a condominium since 1995 (Condominium registration No. 11/1995), which should not be possible because the building was not yet completed and was not sold to anyone. It is not possible to set up a juristic person. Even now that the building is completed, it has not been sold to anyone else. It belongs to the sole owner.
Secondly, that this building has a total construction area to land area ratio of 15:1, resulting in more sales spaces, may seem to have a higher value than normal. However, in another aspect, it may not be considered a direct advantage because there is no six-meter wide road around the building, which is necessary for firefighting according to the new standards. This may result in a lack of safety for the life of building users if a fire occurs.
Thirdly, the Skyy9 building is said to be a Gold-standard green building and therefore assessed at Baht 68,000 per square. The meter, which is higher than the construction cost set by the Thai Appraisal & Estate Agents Foundation at a maximum of 37,700 baht per square meter. Meter.
Normally, green buildings have an additional construction cost of only 2%-7%. In the green building design manual of the Department of Public Works and Town & Country Planning, it is only stated at 3-5%. Even if this building has a PM 2.5 dust filter system, it should not be very high.
Fourthly, from having the opportunity to visit the building where the building management team came to give a briefing and take a tour, Dr.Sopon found that it was managed professionally. And even though there are still not many tenants using the building at the moment, it is because it is still in the beginning stages. In the long term, the working group has estimated that the building’s occupation rate will reach approximately 75%.
Opinions on property value
The initial opinions on the Skyy9 building property value of the working group ranged from a low of Baht 3,487 million. But after further analysis and weighting, the value was Baht 3,951-3,960 million by the working group of the Thai Appraisal & Estate Agents Foundation, which is close to the assessment of the Valuers Association of Thailand at Baht 3,428 – 3,863 million.
The fact that the SSO invested 6,900 million baht can be said to be 74% higher than the preliminary value estimate (assuming Baht 3,960 million).
The current situation of the office building market is likely to be slightly lower than the valuation in 2022 because there has been a lot of supply in the past. In addition, the Thai economic situation in the next few years may not grow very much. Therefore, the real estate market, especially office buildings for rent, which is a crucial economic indicator, may not grow much, or the market situation may be worse than in 2022.
In addition, the costs of building construction of buildings have hardly increased. According to the Foundation, the construction cost of a high-quality 21-35-storeyed office building was 37,100 baht per square meter at the end of 2022, and in March 2025, it was only 37,700 baht.
It may be only the land cost that has increased due to the expansion of the mass transit network, causing land in various locations to increase in value.
Guidelines for the use of assessment firms in the future
Normally, government agencies or public companies use property valuation services in the case of a property transaction. The SEC has a list of 78 certified companies to choose from. These companies have qualified property appraisers who have passed the exam, so they are basically reliable.
However, hiring in this manner also has loopholes that the SEC, Bank of Thailand and related government agencies should consider as well. It is possible that the hiring agency that uses the valuation company’s services will hire a company that they can negotiate with to appraise the property as requested by the employer. Some want a high price (when selling) or a low price (when purchasing).
Dr. Sopon had proposed to the SEC in 1998 that the allocation opportunities should be rotated alphabetically by companies, not letting employers choose their own assessment companies. Estimated fees should be paid in advance and deposited with the SEC There should be a committee to screen reports before use. And there should be measures to control and punish companies that make incorrect valuations promptly and without delay, etc.
The Property Valuation Council is the answer.
Although there are currently two associations of property valuers, the associations are primarily for the benefit of their members, not for the public interest. Thailand should have a professional council to directly certify valuation firms.
At present, valuation firms certified by the SEC are for use for valuation of public purposes only. However, other parties also use this list of companies. Financial institutions also have their lists of appraisal companies that they have selected themselves.
Dr. Sopon was once a consultant to the Vietnamese Ministry of Finance, working on the roadmaps to develop the property valuation profession and putting it into practice. However, in Thailand, there is no professional council. For this proposed council, the president may come from a related government agency because the state is considered a representative of the public’s interests.
The council may have council members from related government agencies as well. The remaining council members must not be appointed arbitrarily or through a professional association. They should be directly elected by voters. This council should be responsible for controlling the profession, including providing professional indemnity insurance.
If there is good professional control, various procurements of government agencies and public companies will be transparent. Budgets will not leak. The country and its people will directly benefit.
