how to calculate open space ratio
The New Bangkok City Plan became effective on May 17. The new planning regulations will have a significant impact on land values and the future development of Bangkok, according to Ms. Aliwassa Pathnadabutr, Managing Director of CB Richard Ellis Thailand.
The new regulations place more restrictions on the size of buildings that can be developed. One of the most significant changes is the restriction on Floor Area Ratio (F.A.R.) this determines the total area that can be built on a site. Previously in most areas of Bangkok developers ( http://www.cbre.co.th/cbrecontent/homepage.htm?WT.mc_id=50003 ) could construct 10 times the total area of the site, an F.A.R. of 10:1.
Under the new regulations this will still be possible in the following areas.
Areas zoned for commercial use (red zone) with F.A.R. of 10: 1 Silom, Sathorn, Surawongse, Langsuan and Sarasin, Part of Rama IV, Rajdamri, Wireless Road, Ploenchit, Sukhumvit from Soi 1 to Soi 21 (Asoke), Phayathai, and Part of Petchburi
Other areas will have a reduced F.A.R to between 8:1 and 1:1.
For example the area of Sukhumvit between Soi 23 to Soi 71 used to have an F.A.R. of 10:1 but this has now been reduced to an F.A.R. of 8:1 and on Chaengwattana Road in the Northern suburbs the F.A.R. has been reduced from 10:1 to 3:1.
With a ratio of 10:1 in the Sukhumvit area 10,000 square meters of gross area could be built on a site of 1,000 square meters. The land cost might make up 15-25% of the price of a new condominium. Less space can now be built on a 1,000 square metre site, only 8,000 square metres can now be built with the lower F.A.R. ratio, the land cost will now be apportioned to a smaller built up area and this will probably increase costs of new buildings.
In the central areas it is unlikely that the vendors of land will reduce prices and so the effect of the new regulations will be to add to development costs.
There should also be a positive effect for existing properties as restrictions on future supply add value to existing stock.
Currently the values of many existing Bangkok condominium developments ( http://www.cbre.co.th/CBRECONTENT/BANGKOK/TRANSACTION_SERVICES/RESIDENTIAL_SALES.HTM?WT.mc_id=50003 ) that are ten years old are half these of newly launched projects. The difference is due to the preference for new buildings and with a number of exceptions limited refurbishment of older buildings, the reduction in F.A.R. will give some older condominiums, scarcity value.
The effect on areas with more significant reductions in plot ratio will probably to cap any increase in land prices and may in some cases reduce values because of the restricted development opportunities. For example if the F.A.R. has been reduced from 10:1 to 3:1 land values will be lower.
Another change is the “Open Space Ratio” (O.S.R.).
Under the old regulations commercial buildings had to set aside 10% of the land area as open area and residential projects 30%.
The new regulations require commercial buildings to have between 3-6% of total built up area which, depending on the F.A.R. will mean setting aside a greater portion of the site for open space.
For Residential buildings, depending on location, 4-40% of built up area must be open space.
For example in the zone between Sukhumvit Soi 23 and 71 the O.S.R. for residential use was 30% of the site area, now it is 4% of the built up area. With a F.A.R. of 8:1 this results in 32% of the site being set aside for open space rather than 30%.
For a new commercial building the effect would be greater because the old rules specified that 10% of the site be open space and the new rules require 4% of total built up area increasing the open space of the site from 10 to 32%.
This requirement means that it will be difficult to build large buildings on small plots of land.
The old regulations stated that 10% of the total land area in any zone could be developed for projects other than the zoned use.
The new regulations still have this clause but there are greater restrictions on what is allowed to be built under this 10%. The revised regulation is much clearer and therefore does not rely on an individual’s interpretation.
In the Central areas the new regulations allow for a bonus F.A.R. of 20% if the developer provides more open space and parking than regulations require.
Generally the new rules are more restrictive on what can be built.
Apart from certain designated sub-centres such as the Ladprao/Paholyothin intersection and the Lamsalee intersection it will much harder for developers to build large buildings in suburban areas.
CB Richard Ellis believes the result of the introduction of new regulations will be a greater difference in land values between areas zoned for high density development and low density areas.
Uses will become more concentrated, commercial centres will be clearly distinguishable from residential areas.
The introduction of these new regulations has been expected for several years and now that they have become effective uncertainty about what they contain has been removed from the market.
Ms. Aliwassa concluded “The New Bangkok City Plan is more sophisticated than the old plan and we believe that the new rules will have a positive effect on the future development of the city.”
CB Richard Ellis (Thailand)