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Foreign developers and property-fund managers are
continuing to expand their investments in Thailand's property market,
particularly in the hospitality industry that is clustered around the country's
leading tourist destinations.
According to a survey by The Nation, foreign firms have formed joint ventures
with local property companies and are planning to spend as much as Bt20 billion
here next year.
They have one thing in common: strong confidence that the property market has
potential for growth next year, despite the economic doldrums of the past 12
months.
Singapore-based Pacific Star International has formed two joint-venture firms
with Asian Property Development to build two condominiums, one on Sathorn Soi 12
and the other on Ratchadaphisek Road. They will be worth Bt3 billion each.
Hong Kong's Concord Property Group has announced plans for an integrated
property development worth up to Bt40 billion in the Pinklao area.
Singapore Residences, a subsidiary of UK-based First Oriental Investment, has
set up a joint venture with the Koolpuntville Group to develop a residential
condominium project called Belgravia Residences in Bangkok's Sukhumvit area. The
project is worth Bt1.7 billion. The company has also set aside US$400 million
(Bt13.5 billion) to expand its investments in Thailand's property market next
year.
Metrostar Property, meanwhile, is planning to form a joint venture with a
European fund to develop an integrated property project on Sathorn Road worth up
to Bt5.3 billion next year.
They all voice certainty about the future of the Thai property market.
First Oriental Investment's chairman Michael Evanoff says he feels very
confident about expanding the company's investment here, even though the country
has political problems.
"Thailand's government has a way of solving the country's problems," Evanoff
says. "Despite the political problems, the economy still grew this year and will
continue to grow next year. As a result, we decided to expand our investments
here."
First Oriental Investment is a subsidiary of Libra Holding, a UK conglomerate
that operates globally through a network of locally managed specialist
companies. Those subsidiaries currently operate in real estate, construction,
hospitality, transportation, energy, asset management and private equity.
"Our investments in the next year will focus on both residential projects and
the hospitality business at tourist destinations such as Phuket," he says.
The country head of Pacific Star International (Thailand), Pritpal Singh Gill,
says the Singaporean-based company is strongly confident about expanding its
investments in Thailand by up to US$60 million (Bt2 billion) in the coming year.
It will focus on both hospitality and residential projects in Bangkok and
tourist destinations such as Phuket, Hua Hin and Pattaya.
Pacific Star has already spent about $100 million in Thailand over the past two
years to develop residential projects and retail businesses now worth up to Bt13
billion.
"Two years after beginning our investment in Thailand, we are confident about
expanding it, especially in the hospitality business because Thailand is the
best location for tourists," he says, adding that proposed amendments to the
Foreign Business Act will not affect Pacific Star's plans because the company
always follows the legal system of its host countries when expanding its
overseas investments.
Concord Property Group (Thailand) general manager Michael Wong says his company
plans to develop a mega-property project on Charan Sanitwong Road in the Pinklao
area. Covering 60 rai and with a value of more than Bt40 billion, it will
consist of a condominium, plaza and shopping complex and will offer more than
12,000 residential units.
The Concord Group is one of Hong Hong's top three property developers, with
assets valued at more than Bt600 billion. The group has investments in many
Asian countries, such as China (including Hong Kong), Taiwan and the
Philippines, and since Thailand is considered to be a country with high growth
potential, the group is interested in making long-term investments here, Wong
says.
The recent rash of enterprises follows an earlier trend in which many top
property firms from Singapore and Hong Kong invested in Thailand, through joint
ventures with local partners, to develop residential and hospitality projects.
TCC Land, the property arm of beverage tycoon Charoen Sirivadhanabhakdi, was an
early player when it formed a joint venture with Singapore firm CapitaLand in
2005, to develop residential projects.
Singapore's Fraser Property Group also holds a 33.3-per-cent stake in Krungthep
Land, a subsidiary of local firm Property Perfect, and City Development, another
Singaporean company, has bought a number of condominiums in Bangkok's central
business district.
Singapore's Banyan Tree Group has invested billions in Thailand. At its Phuket
centre it grooms service personnel to work at its luxury hotel and resort
properties around the world.
Hong Kong Real Estate International has invested Bt18 billion to develop
residential projects in the Kingdom through a joint venture with a local
partner, and as long ago as 1999, the Government of Singapore Investment Corp
bought a 21.14- per-cent stake in leading property company Land & Houses.
The rush to enter the Thai property market is not restricted to firms from Hong
Kong and Singapore. Both property firms and individual investors from the US,
the UK and European countries are lining up to invest in Thai property,
especially in the hospitality business in tourist destinations such as Phuket,
Koh Samui, Pattaya and Chiang Mai.
Jones Lang LaSalle (Thailand) managing director Suphin Mechuchep confirms that a
number of foreign property firms and individual investors are keenly interested
in entering the hospitality business, especially in Koh Samui, Phuket and
Pattaya.
Siam Best Enterprises president, German investor Bruno Pingel, says Thailand has
many tourist destinations that suit the European demand for second homes and
retirement homes. Pingel's own firm has developed the Ocean One condominium
project, worth Bt12 billion, in Pattaya.
He says Pattaya is the best location for European tourists, especially German
people, so he has expanded his investments in the area by setting up a
joint-venture firm with a Thai partner.
First Oriental Investment's Evanoff explains that land and residential prices in
Bangkok and in Thailand's tourist destinations continue to be lower than in
other Asian cities such as Vietnam's Ho Chi Minh City, Shanghai in China,
Singapore and Hong Kong.
This is why Thailand's property market is so attractive to foreign investors, he
says.
The Nation: 15 Dec 2007
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