CHINESE developers have bulked up their presence in the Bangkok property market with a steady pace of condominium unit launches at projects worth more than Bt30 billion in the first quarter of this year as the city cements its status as a prime destination for Chinese investments, property experts said.
Bangkok ranks as the third most popular city for Chinese entities expanding their investments in the property sector in terms of corporate leasing activity over the past three years, an industry expert said.
Nexus Property Marketing managing director Nalinrat Chareonsuphong said that in the first quarter foreign investors increased their investments in Bangkok’s condominium sector. Large Chinese companies that did not invest in joint ventures with Thai developers accounted for around 20 percent of the condominium units launched in the city for the three months – at projects worth a combined Bt30 billion-plus.
The brisk activity in the market is seen as reflecting foreign investors’ increased confidence in Thailand.
Despite foreigners investors already being very active in the Thai market – along with Japan, Hong Kong, and Singapore – they are looking for opportunities to add to their investments in the Kingdom.
“We have started to see more condominium projects that target Japanese people in Thailand as well. And we expect to see at least four to five large-scale projects from Japanese developers this year,” Nalinrat said.
In the first quarter of the year, some 14,094 condominium units were launched in the Bangkok market – by both large and small developers. The new supply corresponds to an earlier projection, resulting in a total of 564,000 units.
Due to the rising land prices in the heart of Bangkok, it has been very challenging for the developers to retain the land for new developments, Nalinrat said. This has resulted in most projects being located farther out from the center, with the Sukhumvit zone accounting for 29 percent, the Phayathai-Ratchadapisek-Rama 9 zone with 23 percent and Thaksin-Petchkasem, 17 percent.
In the second half of 2018, the company expects to see more projects launched in the Chaeng Wattana and Ram-Indra areas due to a clearer view of the plans for the Pink Line mass rapid transit route.
“We also will see more projects of super-luxury condominiums with a starting price of Bt400,000 per square meter by the end of this year or early next year, as a result of the higher land price,” Nalinrat said.
“Meanwhile, the market for city condominiums will keep expanding into the areas served by the extensions of the rapid mass transit lines, but the prices in this market will not increase by much.”
Meanwhile, JLL yesterday announced the finding of its latest survey in the series “China12: China’s Cities Go Global”. Bangkok was found to be the 10th most popular destination for mainland Chinese firms expanding overseas and ranks third in terms of volume for Chinese corporate leasing activity over the past three years.
The report analyses 12 Chinese cities and their transformation into major hubs of innovation and global interaction. It also delves into the country’s emerging wave of influential corporates and the impact that this group of dynamic Chinese companies has beyond the domestic market.
“The China12 is home to a growing group of highly dynamic and ambitious new-generation firms that will drive the next wave of globalization,” said Jeremy Kelly, director of global research at JLL. “We’re already seeing a higher number of domestic brands – both established firms and startups – enter the international market, with key targets in South and Southeast Asia.”
Among the global network of cities, Asian markets such as Singapore, Tokyo, Jakarta, Bangkok, Seoul, and Delhi are featured prominently. Leading the pack is Singapore as the top destination for mainland Chinese firms expanding overseas.
“Not only is it Asia’s most stable and transparent market and a global financial services hub, Singapore also carries strong links to China and is geographically well-placed to act as a gateway into Southeast Asia,” the JLL report says.
Two of the world’s most globalized cities – Tokyo and Seoul – come in at a close second and in fifth place, respectively, demonstrating China’s appetite for the world’s leading gateways and financial centers.
Jakarta ranked sixth, and Bangkok at 10th are major beneficiaries of Chinese companies’ expansions into Southeast Asia. Delhi, in 13th place, is also noted as a key target as Chinese corporates seek to tap into India’s vast population of over a billion people, the report notes.