Foreign investment in Thai property market gathers pace

[Jonathan Fairfield]

Foreign investment in Thai property market gathers pace

BANGKOK:-- Foreign property companies from China, Hong Kong, Israel, Singapore and Japan are expanding their investment in Thailand's property market via joint ventures with local players for the development of both residential and commercial buildings.

Charn Issara Development has formed a joint venture with investors from China and Hong Kong to develop a Bt3-billion mixed-used project, the Baba Beach Club, in Phang-Nga province.

The project, which comprises detached houses, condominiums and a hotel, will commence construction next year.

Major Development has established a joint venture, TMDC Construction, with Bt100 million of registered capital with an Israeli construction firm, Danya Cebus, and Hong Kong's CRG Global Investment.

The Thai company holds 51 per cent of TMDC Construction, while Danya Cebus holds 45 per cent and CRG Global Investment accounts for the remaining 4 per cent.

Nirvana Development, meanwhile, is negotiating with two property funds from Japan and Singapore that are interested in investing in a Thai developer.

The company expects the deal to be finalised in March, before it applies to be listed in the Stock Exchange of Thailand.

Earlier, Japanese property firms also expanded their investment in Thailand's real-estate market by forming joint ventures.

Mitsui Fudosan Group did so with Ananda Development, while Mitsubishi Estate Group followed the same path with AP (Thailand).

Israel-based IBC also established a joint venture with Pace Development in 2009, for the development of luxury residential buildings.

Major Development managing director Suriya Poolvoralaks reported recently to the SET that the company's venture with Israeli and Hong Kong firms was part of an effort to increase its business advantage during a period of intense competition.

It is also aimed at expanding into property-development-related business in the future.

Nirvana Development CEO Sornsak Somwattana said the company needed more capital to expand its business during a highly competitive period, and negotiating with foreign property funds formed part of its effort to boost funding to compete with other property players.

Meanwhile, the company also plans to launch six residential projects worth Bt9 billion combined next year, and investment from abroad would support this plan, he said.

An injection of capital would also support its finances before applying for a bourse listing, he added.

Nirvana Development plans to increase its registered capital from Bt715 million currently to Bt1 billion next year by raising funds from the SET.

Charn Issara Development CEO Songkran Issara said the company's joint venture with investors from China and Hong Kong for its Bt3-billion mixed-used project in Phang-Nga was part of its strategy of managing its portfolio to support its investment plan.

Moreover, foreign investors are interested in expanding their investment in Thailand's property market, where they see business opportunity and strong demand, he said.

Condo, retail business to the fore

Surachet Kongcheep, senior manager of Colliers International Thailand's research department, said investors from Japan, China and Hong Kong were currently interested in expanding their investment in Thailand's property market, especially in condominiums and retail business.

This is largely because the Kingdom's location as a gateway to Asean will increase in significance when the Asean Economic Community comes into being next year.

Meanwhile, Bangkok is urbanising in its suburbs, thanks to the government continuing to expand public investment in the mass-transit system.

This opens up opportunities to develop residential projects in locations around Bangkok for local players, and for foreign investors keen to expand their investment in Thailand, he said.

"When land prices and construction costs in Thailand's property market are compared with those of other countries in the region, Thai prices are still lower, which challenges foreign investors to expand their investment in our property market," he added.

Source: http://www.nationmultimedia.com/business/Foreign-investment-in-Thai-property-market-gathers-30247145.html

-- The Nation 2014-11-07

[emilymat]

Today's good news story............

[maidee]

if only they would see how house here are built ...

[IAMHERE]

I see this as a 'planted piece' to intice some dumb person with more baht than sense to spend money on property that they can not own in Thailand. A sucker is born every minute and they seldom die, at least not rich.

[trogers]

The new foreign investors should first ask why old foreign investors pulled out or stopped new investments.