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source: The Nation April 23, 2008

Swedes and Finns lead the Scandinavian investor pack

Scandinavian investors are expected to invest up to Bt16.2 billion in residential developments in Thailand this year and the next. This money will flow into tourist destinations such as Rayong, Hua Hin, Koh Samui and Phuket, according to research by Colliers International (Thailand).

The company's managing director, Patima Jeerapaet, said Swedish investors figure most prominently in the list, followed by Finns.

The main residential projects developed by Scandinavian investors include villas, resorts and condominiums at tourist hotspots.

According to the research, Rayong is seeing huge investment from Scandinavian investors, especially Swedes, in projects valued at Bt4.79 billion this year, followed by Hua Hin with Bt4.1 billion and Koh Samui with Bt2.07 billion.

Patima said the market was dominated by buyers from Scandinavia who are interested in owning a second home or a property for vacations, in Thailand.

Presently, 3.08 per cent of all Scandinavians visit Thailand.

According the Tourism Authority of Thailand, the number of tourist arrivals in the Kingdom for last year stood at 14.5 million persons. Of that, 757,734 visitors, or 5 per cent, were from Scandinavian countries, a growth of 17.4 per cent from 2006. The majority of Scandinavian tourists travelling to Thailand are from Sweden, at 350,000 visitors last year, followed by Finns, at about 138,332.

The average length of stay in Thailand for visitors from Scandinavian countries has been rising year on year, mainly from four countries. Norwegians recorded the longest average length of stay at over 16.42 days, followed by the Swedish at 16.20 days. Danes spent 14.81 days while Finns spent 14.11 days.

Given the strong interest Scandinavian tourists have in Thailand, most of them are also interested in buying residential properties as a second home for vacations or retirement. Due to this, a number of property developers from Scandinavia have expanded their investment in Thailand, said Risinee Sarikaputra, manager at Colliers' research department.

Most Scandinavian developers have set up joint ventures with local partners to develop residential projects in Thailand. Some of them have bought condominiums developed by Thai developers and resold these to Scandinavian buyers.

People from Scandinavia are known to be traditionally interested in resort properties in Spain and France.

However, over the past three to four years, apart from Thailand, they have snapped up real estate in Turkey and Bulgaria though investment to the former country has now dropped, Risinee said.

The Kingdom is more popular though it has a long way to go before it has the high number of Scandinavian-owned homes as Spain does, she said.

As of now, Scandinavian developers, such as Glen Asia, which develops residential projects in Rayong and Pattaya, and Logans Thailand, which develops residential projects in Rayong, Pattaya, and Hua Hin, have entered the Thailand market.

"In recent years, Scandinavians have become investors in Thailand. Hundreds of Swedish home-buyers are spearheading an incredibly strong Nordic property boom in Thailand," Risinee said.

Credit crisis to cut global investment 30%
source: Bkk Post Apr 11 2008

Global direct real-estate investment is expected to drop by at least 30% from the record level of US$759 billion last year due to the decline in American and European markets, according to the international real-estate consulting firm Jones Lang LaSalle. The company's latest Global Real Estate Capital report indicated that real-estate investments in Asia might be more resilient but that volumes would not achieve the heights of 2007.

Tony Horrell, international director and head of European Capital Markets, said that reduced credit availability and investor confidence were likely to stay in the first half of 2008. He said that the debt squeeze would continue to ripple through markets as central bankers and financiers work to stabilise and stimulate the debt markets.

The situation is being exacerbated by unease about the global economy, in particular about major economies such as the US, the United Kingdom and Japan.

''However, we do not expect a strategic and planned withdrawal of capital from real estate in 2008, or investors to significantly adjust their allocations to the asset class,'' he said.

Of total value in 2007, domestic investment remained at around $400 billion globally, similar to 2006's volume, cross-border investment increased by $58 billion to $357 billion in 2007 and of that, inter-regional investment accounted for $242 billion. In percentage terms, cross-border transactions now account for 47% of total transactions and inter-regional for 32% of total transactions.

The Asia Pacific saw remarkable growth in 2007, with direct commercial real-estate investment reaching a record $121 billion in 2007, up 27% on 2006. Japan, by far the largest market in the region, accounted for 50% of total transactions. Another 36% of transaction activity took place in four markets: Australia (15%), Hong Kong (7%), China (7%) and Singapore (7%).

Cross-border volumes in the Asia Pacific increased to $57 billion last year, accounting for 47% of total transactions. All major markets in the region registered increases, with the exception of the Philippines and Thailand where cross-border volumes were constrained by rigid foreign ownership legislation and a lack of investment-grade assets offered for sale.

"Overall, the real-estate picture for Asia looks positive and global capital allocations continue to re-weigh in Asia's favour".

"We are likely to expect a rebound in investor confidence and transaction volumes to increase in the second half of 2008,'' says Stuart Crow, JLL's head of Asia Capital Markets.

Thailand is among the most lucrative markets
source: The Nation April 11, 2008

Colliers' research predicts a strong year for Thai, Indian and Chinese real estate

Thailand, India and China are the most lucrative Asian countries for foreign property investors, says a research report by international property consultant Colliers International Thailand.

The report, released at this week's Colliers International Asian Valuation and Advisory Conference being held at the Arnoma Hotel in Bangkok, which ends today, said property valuations in these three countries had risen 10-20 per cent so far this year and had room for high returns.

David Faulkner, regional director at Colliers International (Hong Kong), said foreigners investing in Thailand, India and China could enjoy higher returns compared with other countries despite land prices having gone up 25 per cent.

Colliers International Thailand said with current market trends, Thailand could see combined property investment of about Bt70 billion this year, more than doubling from Bt30 billion last year.

Segments in which foreign investors can expect good returns are retail space, serviced apartments, office buildings, hotels and resorts.

Faulkner said property valuations in South Korea, Pakistan, Taiwan and Indonesia were also expected to rise 10-20 per cent this year.

Meanwhile, property valuations in Vietnam, Hong Kong and the Philippines have risen 25-40 per cent.

Singaporean properties have also witnessed a strong rise of up to 50 per cent this year.

Patima Jeerapaet, Colliers' managing director for Thailand, said commercial properties, including retail properties, serviced apartments and office buildings in Bangkok, were coveted by foreign investors. Hotels and resorts at locations like Phuket, Hua Hin, Pattaya and Koh Samui also attract foreign investors, many of whom have plans to set up joint ventures with local partners.

He said foreigners investing in Thailand were most likely to do so with a strategic local partner who had experience conducting business in Thailand.

"Three or four of our customers are negotiating to set up joint ventures with local partners, with both listed and unlisted property developers," Patima said.

In the first quarter, the Japanese-based Asian Partnership Fund Group set up a joint venture with the Mitr Phol Group.

Together they spent Bt630 million to build the Zeavola Hotel on Koh Phi Phi in Krabi.

Australian property management company Macquarie Global Property Advisers has recommended that MGP Hazel (Mauritius) No 1 buy 130 million shares in Siam2you.

Earlier, CB Richard Ellis also said Asia's real-estate market was outperforming the US and European markets.

Jane Murray, head of research for the Asia-Pacific at Jones Lang LaSalle, said many Asian property markets had performed strongly in the past two years and that international investors now expected Thailand to outperform regional competitors.

As a result of lessons learned from the 1997 Asian financial crisis, the Asia-Pacific has weathered the credit crunch, which had the potential to derail the property markets to date.

Investment volumes have held up well over the past six months.

The latest Jones Lang LaSalle "Global Capital Flows" research report shows total investment in the Asia-Pacific rose 27 per cent last year, with the second half accounting for 55 per cent of total volume.

Cross-border investment surged to 47 per cent of total activity last year, up from 33 per cent in 2006.

"This outcome reflects the interest in the region's real-estate markets and the expectation of comparatively attractive returns over the short to medium term," Murray said.

FOREIGN INVESTMENT
Property sector looks set to prosper in 2008
source: The Nation: 8 Apr 2008

Foreign investors are expected to invest up to Bt70 billion in the Thai property sector this year, following the lifting of the Bank of Thailand's 30-per-cent capital reserve requirement.

Retail, office, serviced apartment, hotel and resort properties in Thailand are now being sought by real estate investment trusts and property firms from the United Kingdom, the United States, the Middle East, Japan and Australia.

According to research by international property agency Colliers International, investor confidence in Asian property investment has risen, with strong interest focused on Thailand. Following the removal of the capital reserve requirement, Thai assets have become more attractive, with the potential to generate annual returns of 20 per cent or more.

As a result, the agency says foreign investment will likely double from that of last year, which saw capital inflows of around Bt30 billion into Thailand's property sector.

Colliers International says potential investors include Australia-based Macquarie Global Property Advisors, Japan-based Asian Partnership Fund Group, Dubai Investment Group, Kingdom Hotel Investment and pension and property funds from the Middle East, the UK and Scandinavia.

Already, the Asian Partnership Fund Group, from Japan, has formed a joint venture with the Mitr Phol Group to invest Bt630 million in the Zeavola Hotel on Koh Phi Phi in Krabi province.

Last week, the Australian property management firm Macquarie Global Property Advisers recommended to property investor MGP Hazel (Mauritius) No 1 that it buy 130 million shares in property development newcomer Siam2you, for investment in the Thai property sector.

David Faulkner, regional director of valuation and advisory services for Asia at Colliers International (Hong Kong), said Thailand was more attractive to foreign investors than Vietnam, where land values are expected to rise 30-40 per cent per this year, making it difficult to generate a high return on investment.

"In Thailand, land valuation has increased only 15 per cent this year, so there is room to generate a high return," he said.

Colliers International (Thailand) managing director Patima Jeerapaet said commercial properties including retail space, serviced apartments and office buildings in Bangkok were among those being sought by foreign investors.

Hotels and resorts at tourist destination like Phuket, Hua Hin, Pattaya and Koh Samui are also attractive to foreign investors, many of whom plan to set up joint ventures with local partners.

Patima said investors were more interested in the property market in Thailand and other Asian countries following the sub-prime mortgage crisis in the US, where property values in some areas have fallen by as much as 50 per cent.

K-Tech to seek bankruptcy protection after B977m loss
source: Bkk Post Apr 11 2008

K-Tech Construction will seek protection under the Central Bankruptcy Court after announcing net losses of 977 million baht for 2007. The construction company told the Stock Exchange of Thailand in a statement yesterday that directors on Tuesday had approved ''entering into rehabilitation in order to obtain protection [from creditors] and to prepare the rehabilitation plan for the debt restructuring under the Bankruptcy Act as soon as possible''.

K-Tech, best known for building some of Thailand's most luxurious hotels, is currently facing possible delisting from the SET due to its financial problems.

Its financial losses for 2007, equal to 2.11 baht per share, jumped sharply from losses of 18.35 million, or 0.04 baht per share, in 2006.

The SET said yesterday that shareholders' equity for K-Tech was negative 169 million baht, putting the firm in danger of delisting.

Auditors also issued a disclaimer on the company's 2007 financial statements due to the inability to ''obtain sufficient supporting evidence from the K-Tech management in the form of appropriate documentation and explanations with respect to the revision of construction terms, total estimated project revenue and costs.''

The SET said this had forced the company to reduce the amount due from customers for contract work and construction and installation contracts by 685 million baht for the year. K-Tech was also forced to set up allowances for trade accounts receivable and retention receivables of 149 million baht.

Auditors also had not received confirmation letters from K-Tech creditors representing obligations of 492.69 million baht, and noted ''the existence of material uncertainties which may cast significant doubt about the [company's] ability to continue''.

The SET noted that the Securities and Exchange Commission could force K-Tech to amend its 2007 financial statements due to the auditors' disclaimers.

Shares remained suspended yesterday with a notice pending (NP) attached in light of the potential delisting. The SET will review whether the company could be subject to delisting by April 22.

Shares of K-Tech, suspended from trade since last November for its failure to submit financial statements, last traded at 1.16 baht each. The company is trading just off its 12-month low, and over the past three months has fallen more than 28% in value compared with a 0.7% gain for the broad SET index.

K-Tech directors also announced the appointment of Porntat Amatavivadhana, a long-time investment banker, as a director. He replaced Suprangporn Thumsujrit. Donald Ian McBain was also named a director and audit committee member, replacing Michael Brian Sinkinson.

Established in 1997 by Norair ''Bob'' Der-Kevorkian, K-Tech listed on the SET in February 2004. Mr Der-Kevorkian died in 2005. His son Dominic is currently the managing director of the company.

Developers face clampdown
source: The Nation Apr 8 2008

Bad roads, leaking pipes lead to complaints as authorities warn they will fine offenders

Some 5,000 housing estates in Bangkok will be inspected after developers failed to maintain infrastructure and facilities after the houses were bought.

The authorities will fine the developers Bt1,000 a day until the problems are solved, Land Department chief Chairerk Dissayaamnaj said yesterday.

Housing estates in Bangkok and some nearby provinces will be inspected after 97 people filed complaints to the department that developers had failed to maintain commonly used facilities to a proper standard, Chairerk said.

Most complaints featured deteriorating road surfaces, leaking roadside pipes, poor garbage management, wastewater management systems that were reportedly shut down intentionally to save electricity costs and overgrown weeds in parks and playgrounds.

If the complaints are true, the department will demand the estate owners solve the problems or face Bt1,000 in fines per day, Chairerk said.

Fines will be imposed on the estate owner or the juristic person decided by residents after the estate owner transferred facilities to their supervision, he added.

About 5,000 housing estates in Bangkok have been granted a licence since 1972. The department will first inspect 1,169 projects that have been granted licences since 1995.

People can file a compliant about housing estate owners to the Land Department at 02222 6824 and 02222 3271.