Pattaya is on Sale

[FatherMojo 2]

During my roams through the streets of Pattaya there seems to be a recurring theme... Sale, sale, sale. There seems to be more businesses than usual on sale these days. Here is a brief pictorial of some of the things seen...

 

 

First is Soi Lengkee. There is a new, empty complex which looks very nice from the outside.

 

 

..

 

I like the part about time wasters. Then you should post the price!

 

Then there is The Pier, located above the beer bars just before Walking Street. Looks like the owner or whoever is really going to try to get the second floor going this time. Everything has been predetermined as to what type of businesses will be allowed and all locations have been mapped out. Not sure about the rent, but hey, no key money required. The biggest problem will be getting enough people to go upstairs to take a peek.

 

 

The layout

 

 

The escalator to the 2nd floor (first floor for those of you under the crown )

 

 

 

And here are some miscellaneous places for sale to...

 

Here is a beer bar located at the back end of the complex across from Utopia... Note the price.

 

Guest House on Soi Lenkee

 

Go-Go Bar on Pattayaland

 

That Restaurant sort of across from TukCom but closer to the Wat.

 

 

I found this attached to an ATM which describes the situation perfectly as to why so many places are on sale...

 

 

 

FatherMojo

[Bushcraft 2,579]

I suspect a lot of businesses have been holding on by their fingertips in the hope that this year's high season would be 'back to normal'. It hasn't as far as I can tell, despite all the 'lower-end' guesthouses and hotel rooms reportedly being full over Xmas. I reckon there will be a flood of failed businesses for sale or rent during the next 2-3 months.

[lovedog100 1,372]

I've seen the same places as you posted, and then some more. I take notice because I want a business. The first rule of business Location, Location, Location. Second, price, don't pay so much that a profit can't be made. Every place I see for sale, is either a bad location, way over priced, or both. Like you said about the one, the problem is getting customers to go up the stairs. The last tenants there couldn't get anyone to go up. How much is a business worth that doesn't have customers? The one sign you showed, 1 million BHT, is key money, plus they want monthly rent. It is behind another bar that I think would have a hard time paying that much rent with the few customers it has. A bar in back has little chance of ever making it. My guess is the owner will rent it, the business will fail in a few months, and the owner having rent paid in advance, will have 10 months to find another fool with out losing a single bht.

 

In a bad economy, those paying to much, or in a bad location will go under first. That does somewhat help the other business, as the customer base will move somewhere else. It seems like the good deals, or good locations sell with out ever going on the market. I'd have given my eye teeth to know that Molly Malone's was up for sale. I have seen some other good ones, but they were way out of my budget, and sold quick. Such is business in Pattaya.

[torrenova 644]

Shops and a go-go eh ? The mind boggles at the Thais and their stupidity. Escalators at last though. Too little too late.

[Skygod 40]

The restaurant that you show (Chill & Pepper) by TukCom was only actually open for trade for 2 or 3 weeks I recall.

[torrenova 644]

The restaurant that you show (Chill & Pepper) by TukCom was only actually open for trade for 2 or 3 weeks I recall.

 

Shop houses are build on some non chanote land as they have to "use" the land or lose it / face a harder time converting it to chanote.

 

As for the restaurant, there is quite a decent business converting empty shop houses into any type of business and selling it on straight away. Why ? well most western owners haven't a clue where to buy food nevermind where to buy F&F for a business fit out. They want to take over something, not create it. Only works at the bottom end though, not where a proven trading record is required.

[blacknight 5]

Dont think this was the case with Chilli & Pepper. The owners spent a fortune doing up the whole building including the rooms above but then had some disagreement and I believe that they decided to call it a day and sell up.

 

Pretty good location IMHO for both a good restuarant and quality room rental business.

[FatherMojo 2]

Dont think this was the case with Chilli & Pepper. The owners spent a fortune doing up the whole building including the rooms above but then had some disagreement and I believe that they decided to call it a day and sell up.

 

Pretty good location IMHO for both a good restuarant and quality room rental business.

 

 

Actually, after I posted I thought about that. So apologies to all for classifying Chili & Pepper with the other dud items out there. The place does look nice, but I am not sure of how much of a winner it would be. Personally, I think it is on the wrong side of the street for a restaurant, as most foot traffic is on the TukCom side. But for a room rental business the location is fine.

 

Last night I passed by the place on the baht bus and one of the upper floors had a light on. Maybe one of the owners' use the place from time to time.

 

 

 

 

FatherMojo

[Idefix 2,275]

Personally, I think it is on the wrong side of the street for a restaurant, as most foot traffic is on the TukCom side.

I am not certain it's the wrong side...

Just on the right of this restaurant (towards Tukcom) you have 3 other Thai restaurants who are well known and nearly empty every evening ! So potential clients are used to come in this area when they look for a restaurant.

Don't forget too that this restaurant is just a few meters from the 2nd entry/exit from Center Condotel behind the restaurant. This condo is more than 500 apartments and many people there use to eat in small restaurants around the condo.

I think it's a good place, and even if it stay open only 1 month I saw it several time at least half full. Not bad for a new restaurant.

I do not know the story and why it closed, but it's sad.

[Gary 4,118]

Businesses for sale, then the lease runs out and the landlord has an empty building. Key money payable every third year and ridiculous rent on top of that. VERY few beer bars can afford to pay 50,000 baht per month rent. Why do rents continue to go up when there are fewer people willing to rent?

[Gary 4,118]

Double post, my Internet connection sucks.

Edited February 21, 2010 by Gary

[FatherMojo 2]

Businesses for sale, then the lease runs out and the landlord has an empty building. Key money payable every third year and ridiculous rent on top of that. VERY few beer bars can afford to pay 50,000 baht per month rent. Why do rents continue to go up when there are fewer people willing to rent?

 

 

Yeah, alot of these prices/rents/key money offers are way over the top and I cannot understand how people make money. I looked at a few places and the monies requested vs the income or even potential income are so far out of line that it is laughable.

 

Example - 6 room guesthouse with bar/restaurant and a few internet stations. No key money, but 40k rent per month. I ran the numbers using 50% as occupancy with a bit for bar/restaurant/internet and came up with a monthly loss Even at 100% occupancy the monies earned hardly make it worth the effort for the headache involved.

 

Example - Non-running Go-go bar but I think the guesthouse portion is in business. Opening lease price 12m baht This guy must be dreaming.

 

Here is an advert...

Although this Pattaya Guesthouse was established six years ago, it has recently been renovated to a very high standard. The four storey building has a popular café on the ground floor, and features 13 guestrooms that are constantly fully booked. Long term and nightly rates are provided, and a separate entrance leads to the rooms. Eight of the rooms are fan cooled and are rented out for 2,500 baht per month, four of the rooms are air-conditioned and rent for 9,000 baht per month, or 400 baht per night, and there is an apartment measuring 50 square metres that can be booked for 1,000 baht per night, or 22,000 baht per month. The business is located close to a brand new shopping mall, and is just a short walk from the beach. Complete financial results will be provided for interested parties to peruse. Monthly rent of 45,000 baht is payable, on a long lease contract that has a 15 percent rent increase factored in every three years.

 

WTF 15% automatic 15% rent increase?

 

Let's take a look at how much the new owner can earn at 100% daily occupancy (no discount!)

8 fan rooms @ 300/night = 72,000

4 airc rooms @ 400/night = 48,000

1 Apartment @ 1,000/night = 30,000

Room revenue = 150,000

Cafe Net Revenue? = 20,000

Revenue = 170,000

Less:

Rent -45,000

Staff (4?) -22,000

Utilities (?) -15,000

Maintenance -5,000

Taxes/Accounting -5,000

 

Money to the buyer 78,000 @ 100% occupancy... But who really believes that 100% occupancy can be attained...

knock off 50% -75,000 for a more accurate occupancy estimate.

Monthly pocket money... 3,000 :lol:

 

 

Even if you cut the rent to 20k, the new owner is living on the edge...

 

FatherMojo

[agogogaran 0]

i can remember 10 years ago when i first started coming i could rent a bar for 10k baht p/m with 50k key money, in some popular locations, but over the years the greed of some landlords has put the rent and k/money up and beyond what can be reasonably viable to make a honest living in that industry. It was 5 years ago when i first thought that pattaya will self implode due to this greed.........seems i may be right.

 

 

As at the current rate of rents and k/money going up no-one will be opening new bars...well, ones that will last anyway.

[MM 6,562]

i can remember 10 years ago when i first started coming i could rent a bar for 10k baht p/m with 50k key money, in some popular locations, but over the years the greed of some landlords has put the rent and k/money up and beyond what can be reasonably viable to make a honest living in that industry. It was 5 years ago when i first thought that pattaya will self implode due to this greed.........seems i may be right.

 

 

As at the current rate of rents and k/money going up no-one will be opening new bars...well, ones that will last anyway.

 

I'd be interested if any landlords have kept the same rent/key money or even lowered their demands due to the reduced revenue most of the bars are taking during these times.

 

I'm pretty sure they all plan for a % increase over the last lease period. And if the current leaseholder pulls out, there will likely be someone else to jump in with grand schemes of making big money in Pattaya.

 

In this day and age, the only ones guaranteed to make money are the landlords.

[agogogaran 0]

I'd be interested if any landlords have kept the same rent/key money or even lowered their demands due to the reduced revenue most of the bars are taking during these times.

 

I'm pretty sure they all plan for a % increase over the last lease period. And if the current leaseholder pulls out, there will likely be someone else to jump in with grand schemes of making big money in Pattaya.

 

In this day and age, the only ones guaranteed to make money are the landlords.

 

 

true, what with the key money covering the rent up front, they aint got anything to loose until more needs to be paid.

 

hope they learn a vital lesson that one day even the greedy go hungry!!!!!

[nam-thip 1]

Have to agree with you guys 100% in that it's the Thai building owners that rake in the big money.

 

To quote a song from that well known group Dire Straits fits the bill "Money for nothing”

 

Some years ago i had a reasonably successful business but for it to be that way i worked my tripe off 12-14hrs a day whilst my landlady who didn’t work and drove around in an expensive car collected her big fat annual rental payment plus per cent increases every October from my accountant with me having to pay her rental taxes which was written into the lease contract.

 

Would I go into business again in Thailand?

No way!!

[Kah Joe 0]

During my roams through the streets of Pattaya there seems to be a recurring theme... Sale, sale, sale. There seems to be more businesses than usual on sale these days.

That's why these bars are called ago go's...because they are go go going.

[aras 4]

the problems is the mongers who want to own the bar and the girls thinking drinks and shags will be cheaper for them this way.

drinking in a bar is very different than running one. this may seem obvious to some but many still think that running a bar is easy looool.

why would the landlords drop the prices when there are so many idiots with insufficient funding who think that they can make it?

 

yes is it thrue when you do he math most businesses for sale/rent are not for making profit for the one who is going to run it.nt running a bar/ restaurant is a profession done only by proffesionals but hey people will keep thinking that if you can eat you can run a restauant lol

[torrenova 644]

the problems is the mongers who want to own the bar and the girls thinking drinks and shags will be cheaper for them this way.

drinking in a bar is very different than running one. this may seem obvious to some but many still think that running a bar is easy looool.

why would the landlords drop the prices when there are so many idiots with insufficient funding who think that they can make it?

 

yes is it thrue when you do he math most businesses for sale/rent are not for making profit for the one who is going to run it.nt running a bar/ restaurant is a profession done only by proffesionals but hey people will keep thinking that if you can eat you can run a restauant lol

 

One complication you have is that there are tons of bars out there bought at prices which are just not realistic in this day and age. Many are worth only 25% to 50% of their 2006/7 prices. Yet if you bought one, you could not let it go so cheaply because other people are not reducing their prices. So people just struggle on.

 

The fact is that a business which used to easily support a guy in comfort is no longer doing so and thus, the value of that business is much lower. It might be that you now need two bars instead of one to make the same money. Additionally, because profits are lower and rents and costs higher, the risk is much higher and this further depresses valuations.

 

What has to happen is for people just end up walking away. The LL then gets someone else in who fails and so on, until word gets round and no-one wants it at the stupidly high rents. Even then the rents will not fall as it will then be more profitable to change the use of the building or even rebuild or sell out. This is inevitable.

 

What has also changed is punters wanting value and value at lower prices. Top end places will always do well but bottom end is the new market. People are willing to forgo the mid market and put up with low end because of the cheaper prices. Trouble is that most of the established areas, Soi 7/8 etc. are all in this mid market and they are untenable due to too high rents. So night life has to change.

 

I still think there is good business if you are willing to invest 5-10m and perhaps some value in the 1m area but in the middle 1-5m market, there is little of value.

[Emil 0]

I want a business. The first rule of business Location, Location, Location. Second, price, don't pay so much that a profit can't be made. Every place I see for sale, is either a bad location, way over priced, or both. Like you said about the one, the problem is getting customers to go up the stairs. The last tenants there couldn't get anyone to go up.

 

I think what you have to offer and how well its marketed is important. Heaven Above is up staris and is in an area saturated with other go-gos and appears to be doing well. Secret's opened in an area off Walking St and also seems successful.

[FatherMojo 2]

Sometimes I sift through the business for sale listings on the various websites and many places for sale look like they are losing money.

 

I saw a small guesthouse/bar advertised on a website.

 

3 rooms and a bar on Soi Bukaow... 1.2M to buy the guy out and 20k/month, no key money.

 

Even though the rent is seemingly small at 20k/money, I do not see how the place can make a profit. A small bar on Soi Bukaow means that the owner needs a ton of friends coming by and spending money. How many of us even stop at poxy little bars on Soi Bukaow unless we know the owner or our friends know the owner and we tag along.

 

 

Let's say the guy gets 50% occupancy at 700 baht per night, so 31.5k less 20k rent = 11.5k and from that salary for maybe 2 or 3 staff would wipe that out. Money from the bar? Maybe clear 10-15k per month? Now pay utilities and other what-nots and you are running a loss or pocketing 5-6k per month.

 

I think that lots of owners just want to sell and get from under the strain.

 

 

FatherMojo0

[Gary 4,118]

I knew of one successful bar business in Jomtien. The guy's girlfriend wanted him to buy her a bar He thought it over and agreed. It was located in a shop-house. He remodeled the second floor into a nice apartment. Keep in mind that there was no key money and the rent was 10,000 baht per month. He told his girlfriend that the bar belonged to her to manage as she liked. She paid no rent and no utilities. All he wanted was free beer.

 

He told me that he had to pay rent anyways so why not get free beer as well as the apartment. His girlfriend had no idea how much beer the guy could drink. She couldn't make any money and after a couple of months she gave up. That was no problem because most bar girls dream of having their own bar. She was easily replaced. No doubt he would still be going but he drank himself to death.

[torrenova 644]

I knew of one successful bar business in Jomtien. The guy's girlfriend wanted him to buy her a bar He thought it over and agreed. It was located in a shop-house. He remodeled the second floor into a nice apartment. Keep in mind that there was no key money and the rent was 10,000 baht per month. He told his girlfriend that the bar belonged to her to manage as she liked. She paid no rent and no utilities. All he wanted was free beer.

 

He told me that he had to pay rent anyways so why not get free beer as well as the apartment. His girlfriend had no idea how much beer the guy could drink. She couldn't make any money and after a couple of months she gave up. That was no problem because most bar girls dream of having their own bar. She was easily replaced. No doubt he would still be going but he drank himself to death.

 

In my early days in Pattaya and when unencumbered by kids, myself and a partner had a place with a few rooms. Our external rental costs were around 10k each per month so we had, effectively, a saving of 20k a month as soon as we moved in. Using that logic, living in is a very worthwhile proposition if the alternative is to rent outisde and you were not renting a 3k hut !

[mmail2you 0]

Can someone please expalin what Chanolte is ?

[mrlasvegas 124]

I think what you have to offer and how well its marketed is important. Heaven Above is up staris and is in an area saturated with other go-gos and appears to be doing well. Secret's opened in an area off Walking St and also seems successful.

 

Agreed. The biggest problem in Pattaya is you have way too many bars doing exactly the same thing.

A unique approach is what is required. I have seen too many examples before of bars in crap locations that are packed each night. So I am not as sold on the location concept. More important is the ability to create a totally unusual experience for your customers that is positive, memorable, and will garner as much publicity as possible among your potential customers.