It says they should focus on foreign quotas for condominium ownership and leasehold properties developed by well-known and established companies.

CB Richard Ellis Thailand managing director Aliwassa Pathnadabutr said the proposed changes might affect large foreign investments in property projects and the construction industry but not private investment in a second home in Thailand.

The company has looked carefully at the "real effect" of the government's proposals in conjunction with major law firms and has considered the psychological affects and the perceptions of both foreign businesses in Thailand and foreign purchasers of Thai property, she said.

The danger of the proposals is that they might be seen as a rejection of foreign investment, with large potential losses for both the real-estate and the construction sectors of the economy. They might also be viewed as poor public relations on the part of Thailand internationally.

Aliwassa said her company's first piece of advice to all clients is that the proposals are not yet law.

Second, a detailed reading of the proposals shows them not to be as harsh as the headlines have presented them. Most businesses that will be redefined as foreign will be largely unaffected and allowed to continue, with time to amend their structure if necessary.

Therefore, she said, most office tenants should not be affected, although demand from incoming tenants might well be reduced.

CB Richard Ellis is now focusing on two further proposals under consideration by the government. The first is to restrict nominee-structured companies from owning landed property; and the second is to support the real-estate industry by allowing 90-year leases for villas and increasing the ratio of foreign buyers in condominium projects from the present 49 per cent to as high as 90 per cent.

She said there was strong foreign demand for luxury real estate in Thailand, from Bangkok condominiums to resort properties in the price range of Bt12.5 million and above. There is also strong demand in the mid-range market, with prices of Bt3.6 million and above for holiday and retirement homes in destinations like Pattaya, Hua Hin and Phuket.

Properties like Laguna Phuket have never had significant local demand but rather are targeted specifically at foreign buyers, she said. Such developments are major contributors to foreign-revenue inflow, the construction industry and local economies. Foreigners buying such properties contribute income not only with the purchase itself, but also continuously over the life of the properties through the hiring of local services.

For any current owner of a house or villa with a nominee structure, CB Richard Ellis advises owners to monitor the proposals and seek expert legal advice on how to amend their company's structure and comply with any changes. The proposals allow a period of one year to amend or change a company's status.

If the government decides to go ahead with extending the right of foreigners to lease villas for up to 90 years, conversion to leasehold will be an obvious route for them to follow.

Despite recent events, Aliwassa said there was still sustained foreign interest in Thai real estate. She pointed out sales bookings over Christmas and the first week of the New Year on multi-million-dollar leasehold villas in Phuket and continued condominium sales in Bangkok and Pattaya.

CB Richard Ellis is also proceeding with two international sales campaigns: one in Stockholm later this month for Condominiums at The Cove in Krabi; and one next month for the launch of leasehold pool villas at the Shangri-La Resort and Spa, a beach project on the west coast of Phuket.

"We hope current uncertainties are quickly and professionally resolved, so foreign investors know how to invest in Thai property safely," Aliwassa said. "CB Richard Ellis very much hopes for and recommends longer 90-year leases and extended condominium-ownership quotas.

"We believe that with confidence maintained, the Thai real-estate market will continue to perform well and rise on the back of sustained demand. Thailand is still a good real-estate buy and foreigners' preferred choice over other tropical countries," she said.