Developer Says Property Boom Will Come After Election

[quiksilva]

really??? I thought thats where China and India are excelling in and had taken over from what Thailand used to offer....

Japanese won't keep all their eggs in Chinese basket and will always have Thai factories.

There are 4000 foreign companies (not PO Box) in Bangkok. Most manufacturing. manufacturing for thailand and only small percentage for export compared to 10 years ago.

off subject now so no point going on, we have slightly different views, I just know i am right

Of course, you can think the earth is flat and resting on the back of 4 elephants.

Even slightest check of numbers shows structure of GDP: agriculture (10%), industry (44.9%), services (45.2%) (2006 est.)

In 1988. industry was 30%, now is almost 45%.

Going deeper, you will see that only car manufacturing makes twice as much as tourism.

Well said think too mut, manufacturing is what keeps this country alive, its an absolutely massive industry and in my experience it keeps on growing. We see a lot of demand from existing operators expanding their business and assist new investors set up their manufacturing plants here (mostly Eur, Aus, and USA).

[norrona]

really??? I thought thats where China and India are excelling in and had taken over from what Thailand used to offer....

Japanese won't keep all their eggs in Chinese basket and will always have Thai factories.

There are 4000 foreign companies (not PO Box) in Bangkok. Most manufacturing. manufacturing for thailand and only small percentage for export compared to 10 years ago.

off subject now so no point going on, we have slightly different views, I just know i am right

Of course, you can think the earth is flat and resting on the back of 4 elephants.

Even slightest check of numbers shows structure of GDP: agriculture (10%), industry (44.9%), services (45.2%) (2006 est.)

In 1988. industry was 30%, now is almost 45%.

Going deeper, you will see that only car manufacturing makes twice as much as tourism.

Well said think too mut, manufacturing is what keeps this country alive, its an absolutely massive industry and in my experience it keeps on growing. We see a lot of demand from existing operators expanding their business and assist new investors set up their manufacturing plants here (mostly Eur, Aus, and USA).

check or not and quote figures from websites as they are always correct.... I know for sure that Thailands manufacturing industry for exportation has lost out massively to China and the new and booming India, the former is dirt cheap and lawless the latter is also cheap and has incentives for the would be investor, what incentive does Thailand offer investors?

anyway going off subject again, this topic is about real estate and in the real estate section, still with your heads in the sand you may not have seen it!

Edited November 20, 2007 by norrona

[quiksilva]

really??? I thought thats where China and India are excelling in and had taken over from what Thailand used to offer....

Japanese won't keep all their eggs in Chinese basket and will always have Thai factories.

There are 4000 foreign companies (not PO Box) in Bangkok. Most manufacturing. manufacturing for thailand and only small percentage for export compared to 10 years ago.

off subject now so no point going on, we have slightly different views, I just know i am right

Of course, you can think the earth is flat and resting on the back of 4 elephants.

Even slightest check of numbers shows structure of GDP: agriculture (10%), industry (44.9%), services (45.2%) (2006 est.)

In 1988. industry was 30%, now is almost 45%.

Going deeper, you will see that only car manufacturing makes twice as much as tourism.

Well said think too mut, manufacturing is what keeps this country alive, its an absolutely massive industry and in my experience it keeps on growing. We see a lot of demand from existing operators expanding their business and assist new investors set up their manufacturing plants here (mostly Eur, Aus, and USA).

check or not and quote figures from websites as they are always correct.... I know for sure that Thailands manufacturing industry for exportation has lost out massively to China and the new and booming India, the former is dirt cheap and lawless the latter is also cheap and has incentives for the would be investor, what incentive does Thailand offer investors?

anyway going off subject again, this topic is about real estate and in the real estate section, still with your heads in the sand you may not have seen it!

Yes and what we are talking about here has a direct impact on real estate. Real estate as you may or may not have figured out does not revolve around your precious condo. That is just small slice of the industry.

I specialise in commercial and industrial real estate advisory. I have first hand experience of what is happening in this market, and what I relay to you is not what is in the papers (unless I do a press release which happens from time to time) or on some websites (unless you count what you read here) but my own first hand experience.

This is why I can say with certainty that we continue to see new manufacturing firms opening in Thailand and yes, that includes investors who have also considered India, China and Vietnam as FDI locations, yet they still choose Thailand.

You ask why and what incentives Thailand offers? Well perhaps it you who needs to pull your head out of the sand and take a good long look around you.

Besides being competitive on costs, BOI tax incentives including no income tax, easy work permits, export processing zones with ZERO VAT payable etc and being able to own freehold land, the principal reason as to why these firms choose Thailand over these other booming countries is that Thailand offers these firms' a much better standard of living for their expatriate work force.

Its that simple and if you value your staff you do not overlook this important factor. It is far easier to persuade valued staff to relocate to Thailand, than it is to say India, or some factory out in some heavily polluted backwater city in China.

I'll illustrate this with an example an Australian manufacturer described to me recently about their trip to an industrial estate in China. The factories that they inspected in China took 13 hours to reach over poorly maintained very heavily congested roads from their hotel. Upon arriving at the industrial estate, the pollution was so bad they could actually taste it when they breathed, and could feel it on their exposed skin. I wont repeat what he said about general standard of food and accommodation, but it wasn't good.

This is not an isolated case either. I have heard the same story from investors from all over the world.

So yes, those other places are booming, but they are not that cheap anymore (unless you are prepared to go WAY out into the sticks). So unless you absolutely must have the cheapest place on the planet, what you also must consider is the human factor,, and anyone in business knows how important people are to an organization.

That is why investors choose Thailand, its because they value their people. Ultimately property is all about people, no matter which sector you are looking at.

At least this is my experience of talking to these investors, what's yours?

Edited November 20, 2007 by quiksilva

[norrona]

very questionable your post, firstly work permits are not easy and never have been, secondly the australian sounds like a nice guy can i go work for him as he really seems to care, thirdly serious investors and their ex-patriate work force are not bothered by the standard of living just the return on their investment and the salary being paid for the ex-pat as they won't be placed there forever.

you do commercial real estate, something i never got involved in when i was there so we have to agree to disagree on our views and what each other have experienced.

from my experience the small-medium sized businessman has opened a business in thailand firstly to live there, then to make money....they don't really welcome these entrepreneurs who create jobs and improve the standards of living for local people in thailand do they!

big businesses pay the going rate to local people, bring in ex-pats to train them up then as soon as they are trained get rid of them for staff on much smaller salaries, this is what they do and have done for years.

Not all investors big or small value their staff first, they value the profits!

Nokia and HSBC as two examples could have gone anywhere in the world they wanted and both chose India as thier next place to invest and are both reaping the benefits....India and China as an investor/manufacturer are definitely in front of Thailand.

Freehold property is a plus, but can anyone actually own it apart from a Thai person? that one is not a dig it is a serious question.

your post seems a bit angry? I do hope I haven't offended!

cheers

[quiksilva]

I suppose I bit a little about your "the heads in the sand" comment. That and your wink aside. I'll respond to your points.

Work permits are actually fairly easy for BOI and IEAT promoted manufacturers, its a part of the privilege of being a promoted firm. Check out their sites, they really are very interesting.

Being a BOI promoted manufacturer is not like running a small 49/51% Thai business in the service industry, at all. As we all know it is purposefully difficult for these firms to trade here. So lets not get that confused shall we?

On that subject we should also not confuse investment of HSBC/Nokia call centers and manufacturing, its a different kettle of fish. India is great for BPO and Thailand never will be. On the manufacturing side did you hear about that 500 Million USD investment by Ford and Mazda that was announced for Thailand a few months back? These are not Joe Bloggs retirement stories about running a beer bar. This is big business that I am talking about here.

Now to address your 'serious question' regarding foreign ownership.

I can answer that in absolute terms. Yes they can!

A 100% foreign owned firm can buy land titles (i.e. Chanodes) to accommodate their factories, offices or even the landed residences of their managers. Providing that they qualify for promotion by the Board of Investment or IEAT (Industrial Estates Authority of Thailand).

As such many 100% owned foreign manufacturers here in Thailand hold their factories on a Chanode title, few go so far as to buy houses but its not unknown.

The "catch" is that if these foreign firms cease operations then they will be forced to sell their assets here. Big deal. Its better than a long lease in Vietnam or India's extremely questionable land titling system!

Hope that clarifies my earlier post and please let me know if you need links to official sites describing any of this.

Edited November 21, 2007 by quiksilva

[johnnyk]

Excellent information quiksilva, facts and not beer-goggle conjecture.

Too many westerners exist in the falang ghettoes where having a 500K baht beer bar is their idea of "business".

Many of them have no idea of the scale of Thailand's manufacturing industry (1 million plus motor vehicles a year for example) but that's to be expected of guys who drink too mut in Thailand and were navvies, plasterers and panel-beaters back home.

Proper businesses do care about the standard of living for their expat staff as well as the salaries. Unhappy staff = you know what.

Proper businesses also open up or expand where they have researched and feel they can operate efficiently and make money, they aren't concerned about staff living on a visa-run basis because their staff are fully legal and not hiding behind the bar when authority comes around.

Edited November 22, 2007 by johnnyk

[typist]

The "catch" is that if these foreign firms cease operations then they will be forced to sell their assets here. Big deal. Its better than a long lease in Vietnam or India's extremely questionable land titling system!

imho many prefer a long lease, rather than locking up assets, which should generate a much higher return when invested in core business. Of course, some may decide freehold in Thailand is better than a lease in Vietnam in their particular situation, but I don't see a very compelling argument for this in general (or am I missing something?)

Also, Vietnam has been easing restrictions on ownership for resident foreigners. I have no idea if this will extend to, or have any impact on, industrial property though.

[quiksilva]

Typist, I agree with what you are saying. There has definitely been a move to shift assets off of accounts, in fact this has been very much in vogue in western markets for quite some time now. There has also been quite a bit of sales and leaseback activity,and in Thailand there is a surplus of investors looking for these opportunities (I know many), and this can make sense for firms who are cash poor but asset rich. S&L's may also provide for some tax benefits too (rental vs a depreciating asset).

However, many manufacturers consider their factories to be strategic assets and as such will typically treat these properties differently. If they want to expand or knock a hole in the wall to accommodate a new machine or process they can do so, but mostly its because when they own it, they control it and don't have to be concerned about the stability of their landlord.

Certainly that is not to say that everyone owns, most do, but many also lease factory space. These tend to be firms who have just arrived in Thailand, testing the water so to speak with a 3 year lease term, but even these will often insist on having an option to purchase in their lease, its a reflection of just how important factories are.

Edited November 22, 2007 by quiksilva

[malcolminthemiddle]

I have deleted a number of unnecessary and disruptive posts. Please keep the topic civil.

Returning to the original topic, since I have been in Thailand from the early 90's I have witnessed a number of property booms. They were all localised, short lived and driven by some outside influence, none were driven by political events.

But I suppose there could always be a first time?