Foreign Investors Still Keen on the Thai Residential Market

Jul 11, 2017 | Nationmultimedia

Foreign businesses are still showing a great deal of enthusiasm for the Thai property market with the residential sector seemingly being the most appealing.

The companies are gaining access to the market via joint ventures with local developers. Central Bangkok and tourist hotspots such as Pattaya and Phuket are the primary focus thanks to the demand for condominiums.

A survey conducted by The Nation revealed that Japanese developers had invested in the region of THB100 billion in joint ventures in the past five years. The Shinwa Group and Hankyu Realty are prominent examples of companies that have entered into successful joint ventures with local business.

Of course, it is not just the Japanese who see Thailand as an excellent investment option. Singaporean companies are also showing a great deal of interest, not just in residential properties but those in the hospitality industry as well. Frasers Centerpoint are investigating the possibility of investing in the region of THB13.25 billion in an undisclosed Thai property company.

Foreign Investors Still Keen on Thai Residential Market

We are well aware of Chinese interest in Thailand and indeed a number of property companies from mainland China are investing large sums with the King Wai Group’s reportedly spending around THB300 million to take a 45.45% stake in Keppel Thai Property – a company associated with a number of residential developments in the country.

This interest is obviously welcome but it is probably the investment by the Shinwa Group that is most notable with the company having its origins in Osaka dating back 60 years and are now regarded as an industry leader. Their co-chief executive officer, Tomoyasu Yamabe, has said that he views Thailand as a country with high potential for exponential growth whilst also adding that it is the perfect base for expanding into other parts of South East Asia as well as the US and Europe.

Foreign Investors Still Keen on Thai Residential Market

Mr. Yamabe was keen to stress that this was the first joint venture that his company had enter into and he had been delighted with its success. He felt that their emphasis on quality over price had been a key factor in their success as this had appealed not only to Japanese expatriates and wealthy Thais but also with other expats looking to enjoy ‘authentic Japanese living’ in Thailand. It appears that where foreign investors are concerned at least, it is the mid to top end of the market where the most gains are to be made.

It is not just developers who view the Thai property market as being an attractive investment, alternative-investment managers are also investing significant sums. Apollo Global Management and Goldman Sachs have invested THB8.4 billion in the MahaNakhon Tower both through equity injection and the financing of two of Pace Developments Corp subsidiaries – those responsible for the construction of Bangkok’s tallest building.
The head of Apollo’s real estate business in Asia, Philip Mintz cited the experience and capability of Pace as being hugely attractive. Speaking to The Nation he said: “We look forward to working with Pace for many years to enhance the value of what we believe is one of the best real-estate assets in Asia.”

Although it is hard to pinpoint exactly what the reason is for the aggressive investment by foreign companies, a large amount must be attributed to the country’s infrastructure in places like Bangkok, Pattaya and Phuket.

Although it is far from perfect, the country continues to make improvements at a rapid pace. In 2017, it is understood that the government plans to invest more than THB800 billion in improving road and rail links in the country and this obviously bodes well for the country’s future.

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