Era Hits Provinces With New Franchises

KATHARANGSIPORN (Saturday, February 16, 2008) - The real estate brokerage firm ERA Franchise (Thailand) Co Ltd will start exploring more provincial markets with a plan to sell a regional brokerage franchise covering Phuket, Krabi, Phangnga and Songkhla to a Thai investor who plans to develop luxury projects, says chief executive Voradet Sivatachanon.

The company was in talks with an unidentified investor, who wants a database of ERA agencies in Thailand and abroad. He would spend five million baht for a five-year contract and 10% of sales as an annual royalty fee.

''He wants to deal with the overseas market. He's buying many land plots in Phuket, Krabi and Phangnga for development of luxury villas tapping foreign buyers. Our agency database both in Thailand and overseas can help him sell his future projects,'' said Mr Voradet.

The deal would be finalised by next month, he added. After selling the franchise covering four provinces, ERA would not open branches or sell franchises for the provinces in the future.

ERA in Thailand would be the first to run a regional brokerage franchise. The company would only allow franchises in provinces connected to the border.

ERA also began marketing second-hand property in January through the use of mobile phones with global positioning system (GPS) technology.

Last year, Mr Voradet had a joint venture with a Thai software firm to set up RNC Co Ltd with registered capital of one million baht. The subsidiary was developing a software application to use in mobile marketing that helped ERA agencies have real-time updates of products and customers.

The company also is offering a discount of 30% on the 500,000-baht franchise fee for a three-year contract and free advertising worth at least 200,000 baht for new franchisees that apply before the end of March.

In 2007, ERA posted total sales of two billion baht, only half its target. It targets the same amount this year as last year as the market is still seen as unfavourable. Last year the number of ERA franchisees dropped to 600 from 1,000.

''The current second-hand home market still belongs to buyers but this situation will end within the next few months as the new government starts working,'' Mr Voradet said.

Average unit selling prices last year were 2.5 million baht, down from 2.8 million in 2006. About 30% of buyers paid in cash. Of the units sold, 35% were townhouses, 31% single houses, 16% land plots and 6% condos.

The hottest location among buyers of second-hand townhouses was Chaeng Watthana, while Ekamai-Rarm Intra led among buyers of land plots sized from 60-100 square wah.

''Some condominium units proposed for sale last year were not finished, and some bookings had been offered for sale,'' he said. ''This shows a lot of speculation in the condo segment, especially those on mass-transit routes.''

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