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Knight Frank spots foreign infusion

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The Thai residential market benefited last year from foreign buyers, says property consultant Knight Frank Thailand.

Frank Khan, executive director and head of residential projects for Knight Frank Thailand, said 2017 was an outstanding year for foreign investors as new supply hit the market with innovative designs and modern facilities, helping to grow property investment.

An appealing investment climate gave foreign investors the chance to capitalise on their purchases without being affected by high taxes and stamp duties, he said. Last year also witnessed several listed developers significantly capitalize on their market share because of the influx of foreign buyers.

Mr Khan said the Thai residential market obviously received additional investment from the Chinese, even with stricter outbound investment rules.

The Bangkok metropolitan area, in particular, was a prime investment location. Several mid-priced condos in the capital have as much as 40% Chinese uptake. That uptake was actually quite slow until the second half of 2017 because of more strict controls from the Bank of China on transferring money.

Roadshow expansion throughout Asia-Pacific, including China, marked an important part of marketing activities last year, a trend that should grow in 2018, he said.

Knight Frank foresees a healthy uptake from foreign investors across Asia-Pacific.

Mr Khan said developers should note that investors always aim for three basic criteria in their final purchase decision.

Location: the main factor for overseas buyers, particularly areas that have recognizable landmarks or mass transit accessibility.

Price: this is in direct correlation with the location, with the grading of the development a second factor in price determination.

Product: amenities, facilities, and fixtures — does the overall functionality match with the grading?

Marciano Birjmohun, associate director of international project marketing for Knight Frank Thailand, said with Thailand’s expanding mass transit system, BTS lines remain the key influencer of urban development.

Mass transport is the most important aspect of a community’s infrastructure, he said. In particular, interchange stations such as Bang Sue Grand Central Station, which is under construction, have become a focal point for overseas investors.

More overseas investors are also looking at peripheral areas of Bangkok, providing low entry levels for investment but benefiting from a direct connection to tourist areas and business districts.

With Tao Poon interchange completed and Samrong interchange station nearly finished, these areas have been classified as future hot spots.

“If we only look at the existing traffic at interchange stations like Asok and Siam, we can be certain that Tao Poon and Samrong will become major transit stations by 2020,” said Mr Birjmohun.

Furthermore, the quality of infrastructure systems in Bangkok, including its transport and telecommunications systems, are another important factor influencing real estate investment and development decisions, similar to other big cities around the world.

Infrastructure development has a direct impact on property values, especially in terms of how transport infrastructure affects communities and property values. This is clearly visible along the BTS lines.

“Residential properties located close to transport infrastructure tend to be labeled as ‘premium’ and it’s common for real estate prices to appreciate in line with the development of infrastructure,” he said.




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