Property funds, good time to buy and which one?

[cocorico2558]

Dear friends,

Looking at Thai Property Funds being sold by major Thai banks and wonder if it is a good time to buy right now?

Anybody having some tip which one could be good? Kind of fancy a bit funds with lots of properties outside of Bangkok...

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[rupert the bear]

REITS you mean?i suggest you go for a REIT based on singapore  australia or uk.property prices are rising fast in those places,retail rents are going up as places open up again and theres strong demand for residential property too,Hk could be inc as demand is always higher than supply but the CCP is on your shoulder,perhaps give that a miss.thailand too much supply and no one can get in to buy as the thais are done basically with that as little is moving.

[Oxx]

This would probably have received more attention in the "Investment" forum (if you can find it).

 

Going back pre-COVID, Thai property funds were doing really well, with a steady investment income of typically 5-6%/year.  That appears to have fallen significantly, thanks to COVID.  There have been consequent falls in the values of the underlying stocks.  In fact, it's all been pretty dire.  Looking at the figures, the best 3 year annualised figure for funds investing solely in Thailand (and excluding RMFs and SSFs) has been 0.56% (MFC Property Dividend).  Frankly, you'd have been better off putting your money in a bank savings account.  For flexible funds (which typically invest in Thailand, SIngapore and Chinese property), the best is 5.89% (K Property Infrastructure Flexible).  However, this comes with added FX risk.

 

So, is now a good time to buy? Probably yes, if you believe that Thailand is going to get COVID under control and that tourists will come flooding back.  That would boost the income and share prices of hotels and shopping malls.

 

If, however, you're looking for income from your property fund, be aware that Thai income funds are weird:  they stop paying a dividend when the capital value falls, and only restart paying when it recovers.  PHATRA PROP-D, for example, hasn't paid a dividend since April 2020.  (In "good times" it pays out four times a year.)