by Willie Tan | Nov 10, 2023 | News
CapitaLand Investment (CLI) and Pruksa Holding (PSH), Thailand’s prominent real estate entity, have disclosed the inception and successful initial closure of the CapitaLand Wellness Fund (C-WELL), a pioneering real estate fund centered around wellness and healthcare. In a collaborative effort, CLI and PSH have committed an initial equity investment of $350 million, aiming for a target equity size of $500 million. An option to expand this equity to $1 billion exists, with a projected asset value of $2.9 billion upon full deployment.
C-WELL represents the second collaborative venture between CLI and PSH, following the introduction of the CapitaLand SEA Logistics Fund the previous year. Positioned as a Southeast Asia-focused value-add fund, the newly established fund will concentrate initially on Singapore, Thailand, and Malaysia. Its investment focus encompasses single- or mixed-use assets within the wellness spectrum, encompassing residential, lodging, senior living, clinics, medical suites, and hospital facilities, along with wellness and lifestyle-oriented living solutions.
Additionally, the fund will allocate resources for strategic development opportunities in the broader Asia Pacific region. C-WELL adopts an operator-agnostic approach to investment, ensuring broad accessibility and diversity among its user base.
C-WELL’s primary objective is to meet the increasing needs of aging populations by developing purpose-built environments that foster wellness, comfort, and an elevated quality of life. This is particularly pertinent as both Thailand and Singapore are anticipated to transition into “super-aged” societies, with the senior population aged 65 and above projected to exceed 21% and 24%, respectively, by 2030.
In alignment with its asset-light strategy, CLI will maintain a sponsor stake in C-WELL, contributing to its funds under management and fee-related earnings, according to Patricia Goh, CLI CEO of Southeast Asia Investment. Meanwhile, Uten Lohachitpitaks, CEO of PSH Group, highlights the company’s commitment to elevating the lives of the elderly through multi-sectoral and community-level care initiatives in purpose-driven spaces. He emphasizes that the partnership with CLI is more than a mere investment, underscoring their dedication to redefining standards for wellness-focused real estate where individuals can thrive.
by Daryl Lum | Nov 3, 2023 | News
In the first half of 2023, there was a remarkable surge in international demand for condominiums, offsetting a slowdown in local buyer activity. Foreign buyers, predominantly led by those from China, accounted for a substantial 24.6% of the total transfer value nationwide, marking a notable increase from 20.5% in the previous year.
Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC), noted that the influx of foreign buyers was a consequence of the complete reopening in the latter part of the prior year. This enabled foreign purchasers, particularly those who had bought pre-sale units, to finalize their unit transfers.
There was also a noticeable rise in the number of foreign buyers acquiring completed units from developers, indicating a growing trend in the market.
This surge in foreign demand has been a continuing trend since the second half of 2021, with the proportion of foreign buyers receiving condo transfers in terms of value rising steadily. For instance, in the first half of 2023, this figure stood at 24.6%, up from 21.5% in the second half of the previous year.
The Thai market, however, experienced sluggish demand from local buyers. To revitalize the real estate sector and the economy, Vichai suggested that the government should consider strategies to attract more foreign buyers, such as potentially increasing foreign ownership quotas in select areas like Pattaya and Phuket.
The first half of 2023 saw a substantial increase in the number of condo transfers to foreign buyers, amounting to 7,338 units valued at 35.2 billion baht, indicating a notable surge of 65.6% and 57.8% in units and value, respectively, compared to the previous year.
Chinese nationals maintained their dominance in condo purchases, followed by Russians and Americans. Notably, Myanmar buyers, who were not among the top 10 before 2022, have risen in rank to eighth place, reflecting their increased interest in the Thai property market.
Chon Buri province surpassed Bangkok for the first time in the number of condo transfers to foreigners, with 43.4% of the total, while Bangkok accounted for 37.7%. Together, these two areas represented 81.1% of all nationwide transfers.
Regarding value, Bangkok led the pack with 20.2 billion baht, followed by Chon Buri with 9.84 billion baht, solidifying its dominance in the market.
The most popular category among foreign buyers remained units priced below 3 million baht, with 44.5% of the total, while units with sizes ranging from 31 to 60 sq m or having 1-2 bedrooms continued to be the preferred choice, making up 53.6% of the market.
Mr Vichai highlighted that while the foreign market showed significant improvement, it has yet to reach pre-pandemic levels.
Yours sincerely,
The editorial team at IBP Real Estate Co., Ltd.
by Eddie Yii | Nov 1, 2023 | News
Thailand intends to accelerate the development of the China-Thailand railway, a significant project within the framework of the China-proposed Belt and Road Initiative (BRI), as announced by Thai Prime Minister Srettha Thavisin during a live discussion on Thailand’s future in 2024.
In pursuit of BRI alignment, Thailand aims to establish a railway network connecting Bangkok, Khon Kaen, Nong Khai, pivotal transport hubs in Thailand’s northeastern region, and extending all the way to China.
Srettha emphasized the pivotal role of logistics in Thailand’s BRI cooperation and expressed the nation’s commitment to strengthening the link between its domestic rail system and the China-Laos Railway, which is a prominent BRI initiative in the region. This was conveyed during an interview with Xinhua before his official visit to China, where he also participated in the third Belt and Road Forum for International Cooperation.
The China-Thailand railway, a crucial component of the trans-Asian rail network, is poised to become Thailand’s inaugural standard-gauge high-speed railway.
Upon completion, this railway line will facilitate train travel from Bangkok to the border town of Nong Khai. There are plans for a bridge to connect it with the China-Laos Railway, thus enabling train travel from Bangkok, through Laos, all the way to Kunming in Yunnan Province, southwestern China.
Yours sincerely,
The editorial team at IBP Real Estate Co., Ltd.
by Eddie Yii | Oct 28, 2023 | News
The Mall Group Co, a prominent retail operator in the country, is set to unveil The Emsphere on Sukhumvit Road in December 2023 as a vital component of their expansive retail district, requiring a substantial investment of 15 billion baht. The Emsphere represents the latest addition to the group’s “EM District” development initiative, encompassing 50 rai of land in the Sukhumvit area and offering a collective usable space of 650,000 square meters. Situated adjacent to Benchasiri Park, The Emsphere encompasses a mixed-use project developed on a 20-rai plot.
Conceived under the “Future Retail” concept, The Emsphere embraces the latest trends, immersive experiences, and a futuristic lifestyle for its customers. Its opening has been delayed by two years from the initial plan due to the impact of the Covid-19 pandemic. Chairwoman Ms. Supaluck Umpujh expressed, “We allocated a budget of 500 million baht to craft The Emsphere, infusing a fresh aura into Bangkok. Each of our malls within the EM District is tailored to address distinct consumer needs.”
She also described The Emsphere as the most challenging undertaking in the group’s four-decade history in Thailand’s retail sector. She emphasized the importance of making each of the three malls within the EM District a fun and enjoyable shopping destination for visitors.
The new mall is slated to house EmLive, a world-class arena in collaboration with UOB, spanning 20,000 square meters, equipped with more than 6,000 seats and managed by AEG, a prominent player in the entertainment and sports business. IKEA will take up the entirety of its 3rd floor, spanning 15,000 square metres, and it will also introduce the first 2 Gordon Ramsay restaurants in Thailand – Bread Street Kitchen & Bar, and Street Pizza.
The project will create 10,000 new job opportunities across all its complexes, with an ambitious goal of attracting 80,000 to 100,000 visitors daily, elevating Bangkok to a metropolis that can rival cities such as Paris, Shanghai, London, New York, Japan, and Seoul.
Yours sincerely,
The editorial team at IBP Real Estate Co., Ltd.
by Daryl Lum | Oct 27, 2023 | News
In the third quarter, housing developers’ sentiment for the next six months saw a decline, primarily driven by growing concerns about employment following the government’s announcement of a minimum daily wage of 400 baht for the next year. Vichai Viratkapan, the Acting Director-General of the Real Estate Information Center (REIC), reported that the sentiment index for the upcoming six months dropped to 60.1 in the third quarter of this year, down from 62.1 in the previous quarter. Nevertheless, it’s worth noting that the index remained above the median of 50.0, indicating that developers still maintain a positive outlook on the overall property market for the next six months.
Among the six issues addressed by the REIC in its survey of both listed and non-listed developers, employment recorded the most significant decrease, falling from 62.1 in the second quarter to 56.8 in the third quarter. Songkran Issara, CEO of SET-listed developer Charn Issara Development, expressed his concerns about the policy to increase the minimum daily wage, emphasizing its potential impact on the overall economy.
According to Mr. Songkran, the wage hike’s impact will be substantial, given that the economy has not yet displayed robust growth or the necessary momentum to absorb additional costs, which would result in increased labor expenses for business owners. He also highlighted that the country’s economy has shown signs of recovery from the impact of the Covid-19 pandemic, largely driven by the resurgence of the tourism sector. However, global sentiment remains unfavorable, and concerns persist, both domestically and internationally, including conflicts and disputes such as the situation between Israel and Palestine.
The REIC’s report further reveals the second-largest drop in the expectations index, particularly in performance, which decreased from 69.4 to 65.0.
Mr. Vichai pointed out that the expectations index on costs was the only one to rise, with a 2.1-point increase. This suggests that developers may be able to achieve greater cost reductions compared to the second quarter.
The REIC also documented housing developers’ sentiment index regarding the current situation, which slightly improved to 49.7 in the third quarter from 47.5 in the second quarter but declined from 51.8 in the third quarter of the previous year.
Mr. Vichai attributed this decline to the fact that interest rates had been raised five times from 1.25% to 2.5% in the third quarter. Among these indices, only the current situation index for employment and the launch of new projects or phases exceeded 50.0, while those concerning performance, employment, cost, and the launch of new projects or phases showed improvement compared to the second quarter.
Yours sincerely,
The editorial team at IBP Real Estate Co., Ltd.
by Daryl Lum | Oct 16, 2023 | News
The US dollar saw a decline as the 10-year US Treasury yield dropped to 4.65% yesterday. Nevertheless, Poon Panitpiboon, a currency analyst at Krungthai Bank, has advised caution regarding the Thai Baht, indicating that it could face downward pressure should the Israel-Hamas conflict escalate, resulting in higher oil prices that adversely affect Thailand’s current account balance.
Simultaneously, the flow of foreign funds into the Thai stock market is expected to remain volatile, following the recent pattern of alternating periods of net buying and net selling. Additionally, importers may gradually increase their purchases of US dollars as the Baht strengthens.
Given these factors, Poon estimates that the Baht’s resistance level is likely around 37.25 per dollar. It is not anticipated that the Thai currency will weaken beyond 37.50, and there is a possibility of testing the support range of 36.25-36.30, according to Poon.
Whether a rising Thai Baht (THB) is good for Thailand can be a complex issue with both advantages and disadvantages. It’s important to note that economic conditions are influenced by a multitude of factors, and the impact of a stronger currency can vary depending on the context and the specific circumstances. Here are some potential effects:
Advantages of a Rising Thai Baht:
- Lower Import Costs: A stronger Baht can lead to lower import costs for Thailand. This benefits consumers as it makes imported goods, including raw materials and technology, cheaper.
- Inflation Control: A stronger currency can help control inflation by reducing the cost of imported goods and services. This can be beneficial for the overall stability of the economy.
- Attracting Foreign Investment: A stronger Baht may attract foreign investment, as it reflects economic stability and can increase the purchasing power of foreign investors.
- Reduced Debt Burden: If Thailand has significant foreign-denominated debt, a stronger Baht can reduce the cost of servicing that debt.
Disadvantages of a Rising Thai Baht:
- Exports Become More Expensive: A stronger Baht can make Thai exports more expensive for foreign buyers, potentially leading to a decrease in demand for Thai products and a negative impact on export-oriented industries.
- Tourism Impact: A stronger currency can make Thailand a more expensive destination for foreign tourists, potentially reducing tourism revenue.
- Negative Impact on Local Manufacturers: Export-oriented industries, such as manufacturing, may face increased competition and reduced profitability due to a stronger Baht.
- Economic Imbalance: A rapid and excessive appreciation of the Baht can lead to economic imbalances, potentially causing challenges for certain sectors of the economy.
Ultimately, the impact of a rising Thai Baht depends on various factors, including the pace and extent of the appreciation, the structure of the Thai economy, and government policies. The Thai government and central bank can use monetary and fiscal policies to manage the exchange rate to achieve their economic goals. They often aim for a balance that supports economic growth, controls inflation, and maintains a competitive export sector.
It is important to note that the Thai Baht has seen periods of sustained strength against the US Dollar. It follows that a strong Thai Baht cannot be viewed in a vacuum as a solely good or bad thing. However, if you are a foreigner looking to invest in Thai properties, it would serve you well to purchase Thai properties at periods when the Thai Baht is relatively weak as compared to your home currency. This is because you will need to make the purchase in your home currency. If there is any appreciation that was to occur to the Thai Baht subsequently, you will not only enjoy the appreciation in literal price but also the appreciation that happens due to the rise in the exchange rate.
The Thai Baht is hovering close to 5-year lows against the USD. This should be something that foreign buyers of Thai property will need to take note of. It could be a good time to enter the Thai property market if that is your immediate to short-term goal. This would allow you to enjoy not just possible capital appreciation but if the Thai Baht starts to appreciate, you will have more of your home currency when disposing of or renting your Thai property.
Yours sincerely,
The editorial team at IBP Real Estate Co., Ltd.
