by kevinyeo | May 8, 2018 | News
Successive Japanese real estate firms are penetrating the Thai property market by joining forces with local partners to cash in on growing demand for residences.
Tokyo Tatemono Co, one of the major developers in the Tokyo metropolitan area, is the latest entrant into Southeast Asia’s second-largest economy as condominium supply swells in Bangkok.
The company recently signed a joint venture agreement with Raimon Land Public Co to implement a 9.1-billion-baht project for the development of two high-rise condo complexes, one in Sathon and the other in Phrom Phong, both in the heart of the capital.
This is the company’s first real estate project in Thailand, following ongoing development projects in Singapore and Myanmar. The project calls for about 400 units in total, each costing more than 10 million baht, with construction set to start later and be completed in 2021.
Katsuhito Ozawa, executive managing officer of the Tokyo-based firm, said his company has good long-term prospects for property investment in Thailand and believes that stable economic growth will continue to create more residential demand.
Raimon Land, which will own a 51% stake in the planned joint venture, has mainly specialized in the middle- and upper-grade residences in the center of the capital, and aims to double its annual revenue to 10-12 billion baht in the next five years in partnership with Tokyo Tatemono, chief executive Adrian Lee said.
Japanese developers have been flocking to the Southeast Asian nation since Mitsui Fudosan Co, a leading real estate firm at home, tapped the Thai market by teaming up with Ananda Development Plc in 2013 for a project with 1,875 residential units.
Major rivals such as the Mitsubishi Estate group, railway-to-property and hotel chain conglomerate Tokyu Corp and Nomura Real Estate Development followed suit, forming partnerships with local counterparts.
The 20 joint projects between Mitsui Fudosan and Ananda total about 16,000 housing units, the largest among Japan-Thai alliances, while Mitsubishi Jisho Residence and AP Thailand Public have developed 11 projects, supplying nearly 12,000 units in total.
Meanwhile, various partnerships have emerged such as Hankyu Hanshin Properties Corp and Sena Development Plc, Osaka-based Shinwa Real Estate and Woraluk Property Public, and Tokyo-based Hoosiers Holdings and All Inspire Development Public.
The property market in Bangkok remained vigorous in the first quarter of this year, said Nalinrat Chareonsuphong, managing director of Nexus Property Marketing. “We have started to see more condo projects that target Japanese people in Thailand and we expect to see at least 4-5 mega projects come from Japanese developers this year.”
A Thai real estate analyst, on condition of anonymity, said that Japanese investors have turned to the real estate and service sectors as “a new opportunity” to expand business abroad on the back of steady growth in the property market, especially the condo segment, although they previously focused on the manufacturing sector.
The Thai government’s investment promotion schemes such as the Eastern Economic Corridor and the expansion of mass rapid transit systems in the capital and suburban areas are providing foreign investors with positive factors to tap into the property market.
Mr Nalinrat said the proportion of medium- to small-sized developers, including foreign competitors, increased significantly in the first quarter of 2018.
Japanese investment is also a chance for Thai developers to benefit from funding and expertise, the analyst said. Kyodo
source: https://property.bangkokpost.com/news/1460534/japanese-partnerships-mushrooming
by kevinyeo | May 6, 2018 | News
In chic central Bangkok, a foreign buying binge is fueling a red-hot market for the ultra-luxury real estate.
At 98 Wireless, a luxury condo opened last March in the capital, one buyer from Hong Kong snapped up a US$2.2 million (S$3 million) apartment without more than a moment’s thought.
“It was an impulse purchase for him,” says Uthai Uthaisangsuk, an executive at the project’s developer, Sansiri.
For the price of a cramped studio back home, the investor had bought an opulent two bedroom spread with Ralph Lauren furniture, three bathrooms outfitted with Carrera marble, butler service and a chauffeured Bentley limousine.
Scenes like this have become more common in the Thai capital, where foreign money is pushing up prices at the top of the real estate market, even as developers struggle to sell more pedestrian properties.
With the economy still recovering from a 2014 slowdown, household debt makes it tough for the average Thai person to qualify for a home loan, so companies like Sansiri and Country Group Development are selling luxury to foreigners.
“Developers are having problems selling to locals,” said Ratchaphum Jongpakdee, general manager for Thailand at real estate firm Colliers International Group.
“But they have no problem selling to foreigners.” Buyers definitely get more bang for their buck in Bangkok than in Hong Kong (comparing things like square-footage and bathroom fixtures).
But what’s surprising is that, even though condominium prices in the center of the Thai capital have doubled in the last five years, they’re still cheaper than in less-traveled cities like Jakarta, Kuala Lumpur, or Vietnam’s Ho Chi Minh City, according to real estate advisors.
The price-gap could be set to close, though.
Once a niche tourism destination for backpackers, Bangkok in 2016 surpassed London to become the world’s most visited city, hosting 19 million overnight travelers, about two for every resident. The boom has put the city on the map for investors, especially mainland Chinese who are coming in droves.
Last year, land prices in the city center jumped a record 30 per cent, with foreign investors making up almost a quarter of the capital’s high-end property sales, according to commercial real estate firm CBRE Group.
In the last quarter of 2017, the price of luxury condos rose more than 10 percent, outpacing every other market segment, data from Bangkok’s Real Estate Information Center shows.
Fuel for the fire has come, ironically, because of China’s attempts to stop the outflow of money from its borders.
Caps imposed last year on how much capital people can take out of the country have had the unintended effect of funneling cash into property markets like Thailand’s, where prices are relatively cheap.
A scarcity of buildable land in the city center is a limitation on developers. For investors, though, it’s a big reason high-end apartments should continue to appreciate, according to Patti Tomaitrichitr, an analyst at Macquarie Securities Thailand in Bangkok.
“It’s not easy to find a good plot in a good location right now, so prices will keep going up,” she said.
Sansiri, the developer behind 98 Wireless, the 25-story apartment tower named for its coveted address, began advertising luxury condos to foreign buyers in 2014, when the local economy was in the doldrums.
The company now holds marketing events in Hong Kong almost every month and last year opened three more offices in mainland China, in addition to the one it had in Beijing.
Chinese buyers helped Sansiri sell half of the 77 apartments at Wireless before construction was finished, according to Uthai, the developer’s chief operating officer.
At another luxury condo nearby, the Magnolias Ratchadamri Boulevard, some 80 percent of the units have already sold, with investors from Hong Kong, Singapore and Taiwan accounting for more than half, according to the developer, Magnolia Quality Development.
The 60-story spire features a five-star Waldorf Astoria hotel on the lower floors.
The numbers are similar at the Four Seasons Private Residences, which is currently under construction on the edge of the Chao Phraya River. Some 70 percent of the 355 units have already been purchased, with half of the buyers coming from outside Thailand, according to Ben Taechaubol, the chief executive officer at the developer, Country Group.
Thailand has fewer limits on foreign condo ownership than some places in Southeast Asia. Even though non-citizens are allowed to own no more than 49 percent of the units in any single project, they can buy condos built on freehold land, where ownership doesn’t have a time limit tied to a lease on the underlying dirt. That’s not allowed in neighboring Vietnam or Laos.
Another benefit: Foreign buyers aren’t hit with special taxes, as they are in Singapore and Hong Kong.
The January sale of Britain’s Bangkok embassy, on a coveted freehold land downtown, was Thailand’s most expensive real estate deal ever.
The buyers, a partnership between local and Hong Kong developers, paid the equivalent of about US$600 million for a parcel the size of six football fields. The plan is to knock down the existing colonial-era buildings and put up an office tower with luxury condos or a hotel on top, according to Central Group, one of the new owners.
“Every day, developers are literally knocking on the doors of embassies, businesses and homeowners, anyone with land in the central downtown,” said Ratchaphum, the Colliers executive. “It’s almost impossible to find freehold land in these areas.” BLOOMBERG
source: https://www.todayonline.com/world/bangkoks-luxury-apartments-cost-less-studio-hong-kong
by kevinyeo | Apr 30, 2018 | News
PLANNED high-speed and double-track rail projects to serve the Eastern Economic Corridor (EEC) are expected to begin services in 2023, with an investment value of Bt296.42 billion alone flagged for the high-speed train service, the State Railway of Thailand (SRT) said.
Up to Bt214.3 billion of this amount would be spent on getting the high-speed service up and running, with Bt4.99 billion put to compensation for land expropriation covering 400 rai along the route and the rest allocated to the development of commercial areas around the main station, Chulathep Chittasombat, director of the centre that oversees railway maintenance projects, said at a press conference yesterday.
Chulathep said the two infrastructure projects would equip the flagship economic zone with the rail transport it needs for freight and people.
The terms of reference for the high-speed train project – connecting the Don Mueang, Suvarnabhumi and U-Tapao airports – are being drafted on the expectation for bidding to be opened this year and construction to start in 2019.
“The plots of land planned for expropriation will account for only 5 percent of the total construction area, of which 95 percent will cover the existing rail route,” Chulathep said.
The Office of Transport and Traffic Policy and Planning is conducting a feasibility study for construction of an Inland Container Depot (ICD) in Chachoengsao province to facilitate exports. Inspection and packing would be done before the goods reach ports in the EEC area.
Regarding the second phase of the high-speed train and double-track rail services that will connect industrial estates in the EEC, the SRT is requesting for additional funds to hire consultants, at about Bt200 million for each project, to conduct studies and project design.
The bidding terms for the high-speed project will be announced in July on the expectation for bid submissions in February next year, with the bid winner likely to be announced in May next year. The high-speed project’s full services would start in 2023.
An anonymous source from Bangkok Mass Transit System Plc said that the company is interested in the high-speed project and would assess whether to proceed with a bid based on factors such as expense, the cost of funding, projected income and the break-even period.
“Once the bidding conditions come out, the figures must be taken for evaluation and discussions will be held with a partner on the return on investment. If it’s satisfactory, all the parties will join up in a bid,” the source said.
Piyasvasti Amranand, the chairman of PTT Plc, said that the board had approved PTT Group’s planned purchase of the TOR for the high-speed project with the aim of a conducting a feasibility study into it. No consideration yet had been to given to company’s seeking of a partner for joint investment.
Prasert Marittanaporn, director of CH Karnchang Plc, said that the group was interested in joining the bidding for the high-speed train, citing its readiness to proceed in the construction business.
“The company is ready and interested to bid. But the source of financing may need to be given more consideration, given the relatively high investment,” Prasert said. “It could be an investment on our own or a joint investment with a partner. We have had some talks with potential partners.”
Separately, Deputy Transport Minister Pailin Chuchottaworn yesterday said that, after having chaired a brainstorming session on the creation of an organization for the management of the Thailand-China high-speed rail service, eight financial advisers registered with the Securities and Exchange Commission were invited to bid for a model of the establishment of such an organization. The deputy minister cited the advisers’ expertise in financial management and real estate development.
Initially, the organization may be established as a company to be listed on the stock exchange for fundraising and more management flexibility, he said. It must be a newly established unit owned and controlled by the public sector, independent from the SRT, which owns the high-speed train project, the deputy minister added.
“These financial advisers will present the model of the organization within one month and then, a subcommittee will select the best proposal,” Pailin said. “The winner will be assigned as the project’s financial adviser in return as these financial advisers will conduct the study for us at no cost. The organization is expected to be set up this year.”
The eight financial advisers are Kasikornbank, Siam Commercial Bank, United Overseas Bank (Thai), Finansa Securities, RHB, Ploenchit Capital, Avantgarde Capital, and PricewaterhouseCoopers FAS
by kevinyeo | Apr 30, 2018 | News
TOURISM experts and online travel platforms are welcoming the collaboration between e-commerce giant Alibaba and Thai tourism authorities to develop smart and digital tourism, although there are concerns over possible negative impacts.
Critics voiced concerns over a potential monopoly following a deal between Alibaba Group and Thai state agencies covering a number of areas, including tourism. Some also suggested the authorities needed measures to protect tourist attractions from an expected influx of foreign visitors.
Under a partnership deal on tourism, the Tourism Authority of Thailand (TAT) will expand cooperation with Fliggy, Alibaba’s online travel business and China’s leading online travel service provider, to focus on support for smart and digital tourism in Thailand. As an official strategic partner of TAT, Fliggy will work with the agency to offer smart technological experiences at multiple facilities and tourist attractions across Thailand for the convenience of visitors – ranging from online tour guides to electronic ticketing systems.
“In any case, like it or not, we cannot bar Alibaba from entering Thailand. So the best approach is to ensure local tour operators are well prepared for increased competition,” said former TAT governor Pradech Phayakvichien. “They should adjust their approach and work out how they could get the most benefits out of the collaboration,” he suggested. “In the digital era, we need technology to help connect us to the world and potential customers.”
“But the most important thing for Thailand is that we preserve and protect our tourist attractions,” Pradech said.
“We have to maintain or improve the standard of our [tourist attractions]. If we leave our beaches damaged, how could the Alibaba travel platform help us sell them?” he asked.
Prominent marine ecologist Thon Thamrongnawasawat said he expected the collaboration to bring changes in the proportion of Chinese tourists coming to Thailand. Whereas most Chinese now tour the Kingdom in groups, there is potential to also attract many more couples and individuals. That would make it easier to cope with the arrivals and better distribute income to local vendors. Thon said boosting the number of Chinese tourists or their spending here should not be the main objective for the partnership, as the figures are already high.
Statistics show Thai tourism relies heavily on Chinese visitors. As of April, 30 percent of all foreign tourists arriving in Thailand this year were Chinese, according to Thon, who is a member of the National Policy Committee for Tourism. Estimates are that tourism this year will generate about Bt3 trillion in revenues – a third of which is expected to come from Chinese tourists, he said. However, there is still concern over a possible surge in Chinese tourists following the collaboration. Pradech said authorities need to put measures in place to restrict the number of tourists at attractions where there are risks of damage.
Thon, who sits on the committee drafting the national strategy on environmental issues, said the draft plan would limit the number of foreign visitors to national marine parks to six million a year, to help protect marine resources from swift deterioration brought by heavy tourism traffic. Out of the six million visitors, four million are expected to be from China. “We are already in a ‘tourism trap’. Around 10 million Chinese tourists visit Thailand every year and generate around Bt1 trillion. If they are dissatisfied with us, what will happen” to Thailand’s tourism industry?” asked Thon.
Partnering with Alibaba
Yuthasak Supasorn, TAT governor, said in a recent press release that the agency would partner with Alibaba for tourism marketing activities through the giant’s online platforms, as well as connect with Alibaba’s other marketing channels to develop “big data” for the Thai tourism industry.
The partnership would help increase the competitiveness of small and medium-sized tourism companies in terms of the development of new products and services that will attract more Chinese tourists to the country, he added. “We hope it will also help both new arrivals and return visitors from China discover emerging secondary destinations, so it is a ‘win-win’ situation for both parties,” he added.
Some critics voiced concern that Fliggy might monopolize the Chinese tourist market and affect local online travel agencies.
But others see a partnership with the giant firm in more positive terms, as an opportunity to expand the market. Amornched Jinda-apiraksa, CEO, and co-founder of TakeMeTour, the largest marketplace for local tours in Thailand, said the collaboration would benefit Thai tourism in terms of getting more Chinese tourists into the country.
He said operating the travel business in the Chinese market is very challenging due to the language barrier and because Chinese tourists have specific behaviors and characteristics.
Amornched added that TakeMeTour this year planned to focus more on Chinese tourists, and that presents a good opportunity for Thai travel operators to offer their services and products directly to Chinese consumers on the Chinese platform.
The TAT has yet to give further details about the collaboration. Amornched said the format could be the opening of a Thai tourism shop or a flagship store on Fliggy.
TakeMeTour was one of six Thai start-ups and 37 Asian entrepreneurs joining the eFounders Fellowship Programme at Alibaba headquarters in Hangzhou, China, in March. Amornched said Alibaba has a strong ecosystem and his firm is willing to join the platform.
As a community-based online tourism platform that provides travel experiences in local communities around Southeast Asia, Somsak Boonkam, founder and chief executive of Local Alike, said his business may not be affected. That’s because the average Chinese tourist has no interest in community tours and only a small number have the taste for eco-friendly tourism.
Thon agreed. “You do not have to fear [about the Chinese platform snatching away customers.] The Chinese tend to buy Chinese goods, anyway,” Thon said.
As part of the collaboration, Fliggy and Ant Financial, Alibaba Group’s affiliate and operator of Alipay, are also in active discussions with various related government agencies to drive a digital transformation of Thai tourism.
Alipay, operated by Ant Financial, is China’s largest online payments and money transfer system, with more than 500 million active users. Thailand is among Alipay’s top three overseas-transaction hubs.
Somsak said using Alipay would help facilitate convenience to Chinese tourists with a familiar payment option when they traveled abroad. However, he urged the government to look into this matter carefully as there are concerns the system could allow massive outflows of money from the country.
Varithorn Sirisattayawong, research head for Kasikorn Research Centre, said Fliggy will help increase the number of Chinese tourists who choose Thailand through booking on the platform. It would benefit Thai banks and non-banks that offer international money transfers, payments, and exchange, as they would receive additional transaction fees as the number of transactions increased.
Varithorn said the use of Alipay to arrange a visa on arrival and tourist tax refunds for Chinese tourists would not directly impact the business of Thai banks and non-banks.
source: http://www.nationmultimedia.com/detail/Tourism/30344213
by kevinyeo | Apr 26, 2018 | News
The residential condominium market in Bangkok’s central business district (CBD) remains positive as the take-up rate rose significantly because of reduced supply in the first quarter this year.
Condo prices increased throughout Bangkok and this is expected to continue with stronger demand from domestic and international buyers, said Edmund Tie & Company, a real estate consulting firm.
The company reported the number of condo units in Bangkok grew by 623 units in the first quarter this year. This is a fall from the 2,504 units released in the fourth quarter of 2017.
Supply in the first quarter decreased from 2,367 units in the first quarter of 2017, down 73.6%.
The majority of the units launched in the first quarter were located around central Lumpini, followed by the Sukhumvit area. Access to green spaces, luxury views, and connection to public transport makes central Lumpini popular with developers and buyers.
The average pre-sale rate for upcoming condo projects in Bangkok’s CBD market was an impressive 81.0% in the first quarter.
This is notably higher than the 67% take-up in the first quarter of 2017 and 70% in the fourth quarter of 2017.
The average asking price of resale condo units also increased to 132,000 baht per square meter, up 0.69% from 131,100 baht in the last quarter of 2017.
Condominium values increased slightly in the first quarter of this year as the price index rose to 159 from 158 in the fourth quarter of 2017.
Edmund Tie & Company reported a variety of new projects in the second quarter of 2018. Among them are Loft Sathorn12 and Loft Sukhumvit.
“We expect the sales momentum of the condo market to continue. There is keen interest from both domestic and international investors looking to participate in the CBD condominium market in Bangkok, and prices are set to climb further,” said the report.
“Developers have a positive outlook on the market, believing there is still potential for growth and will look to move their businesses forward. Medium to large developers are typically looking for prime CBD locations because demand for homes in the CBD tends to be more resilient. The main challenge for developers will be increasing land prices, as new record land prices have become a regular occurrence. CBD plots will continue to escalate in price as the availability of land parcels becomes increasingly challenging.”
Bangkok’s CBD office market is expected to be active throughout 2018, with total supply restrained to 160,596 sqm until 2020. This implies that the vacancy rate will remain low and rents will continue to rise, the report said.
Average asking rents are likely to remain positive in the second quarter of 2018. The company expects rents to rise steadily at a modest pace in early 2018 and beyond.
Tenant occupancy levels are expected to remain strong in 2018, with demand emanating from both domestic and international companies.
Edmund Tie & Company anticipates demand will be bolstered by online businesses and firms operating in the technology sector.
The company reported the net absorption of the office market remained in the positive territory in the first quarter.
The overall occupancy level rose to 90.3%, compared with 89.9% in the fourth quarter of 2017.
The higher office take-up rate in the CBD also signals stronger leasing activity, with the growth in demand for office spaces extending from the fourth quarter of last year.
There is a continuous office space supply in non-CBD areas. New supply in non-CBD areas in the first quarter of 2018 increased by 15,000 sqm. An example of a recent completion in a non-CBD area is Ari Hills, a mixed-use development hosting office, and retail spaces.
Separately, there were no new completions in the CBD area in the first quarter of 2018, and the total office stock in the CBD remained at 1.833 million sqm. There are also several developments in the pipeline supply.
Singha Complex is officially opening in the second quarter of this year (50,596 sqm), and other CBD developments scheduled for completion in this quarter include Samyan Mitrtown (50,000 sqm in 2019), the Aspiration One (30,000 sqm in 2019) and Bhiraj Sathorn 15 (30,000 sqm in 2020).
The growth in net absorption and higher occupancy level adds upward pressure on rents, and the average asking rents in the CBD increased to 820 baht per sqm per month in the first quarter. The prime office gross rental index for the period improved to 127.0, up from 125.0 in the first quarter of 2017.
source: https://property.bangkokpost.com/news/1452658/cbd-condos-see-improved-take-up-rate
by kevinyeo | Apr 22, 2018 | News
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.
source: http://www.nationmultimedia.com/detail/Real_Estate/30343497
