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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.
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