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Foreigners sell off Thai properties

The Nation March 27, 2009 Providing good opportunities for locals with cash, say agencies Foreign speculative investors who put their money into residential properties in Thailand over recent years, particularly condominium units and luxury villas, are beginning to resell them as they face the financial crunch of the economic crisis. The managing director of property agency Knight Frank Charter (Thailand), Phanom Kanjanathie-mthao, said that some investors from Europe, the United States, Singapore and Hong Kong were placing their residences - bought as recently as last year - on the market in order to reduce their portfolios and generate cash. Most of them want to hold cash rather than property because they believe property prices will fall when the full force of the global crisis hits Thailand's economy. Phanom said the market value of Thailand residential properties, including condominium units and villas, was holding steady. In some places prices have kept rising by 5 or 10 per cent. This is better than at property projects in Europe and the US, where prices have fallen between 30 and 50 per cent. Foreign investors are therefore choosing to sell their Thailand properties to make a profit because profits from property are no longer attainable in most other countries, he said. He said the resale prices were 5 or 10 per cent below market value, but this price continued to generate a profit for investors who began to put money into the Thailand property market in 2007 and 2008. "We believe that foreign investors who speculated on property projects in Thailand continue to reap benefits from those projects, but their benefits may be 5 or 10 per cent lower than their estimates," he said. Jones Lang LaSalle (Thailand)'s managing director Suphin Mechuchep said that a number of foreign investors who bought condominium units in Bangkok's central business district at prices of more than Bt100,000 per square metre in 2007 and 2008 were seeking to resell these properties to dilute their overseas holdings. Most of them wanted to make a profit from the resale, but it could be up to 10 per cent lower than their target, she said. The buyers were local people who had available purchasing power. "We believe that this is a good time for local investors who have cash to buy a residence at a reasonable price. Investing in property will generate higher returns than saving their cash in banks, which now offer interest rates lower than 2 per cent," she said. Suphin said Thailand corporate investors were also grasping opportunities to expand their investments overseas by purchasing distressed assets in places like Europe, the US and Australia. For example, beverage tycoon Charoen Sirivadhanabhakdi has taken over a hotel in Australia and the Central Group has set aside a Bt3-billion investment budget with an eye on overseas retail businesses. Suphin said that despite recessions in overseas countries and the economic downturn in Thailand, some Thai investors still had enough cash to expand their investments both locally and overseas. Such new investments depended on business opportunities, she said.

 

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