Demand from foreign investors to buy middle- to upper-market condominiums in Bangkok’s central business districts (CBDs) is strong, especially from Asian countries, thanks to the Asean Economic Community having come into effect at the beginning of the yea
Implementation of the AEC presents a positive challenge for Thailand’s property developers to road-show their residential projects overseas, especially in China, Taiwan, Singapore, Hong Kong and the Middle East.
"We plan to road-show our luxury condominium projects in Taiwan, Hong Kong and Singapore this year, having witnessed [foreign] demand to buy in these projects last year," said SC Asset Corp’s chief executive officer, Nuttaphong Kunakornwong.
The company’s luxury Saladaeng Ond project, which was launched last year, has already achieved sales of Bt900 million to foreign buyers from Hong Kong, Singapore, China and Taiwan, he said.
Up to 30 per cent of the customer target for Saladaeng One, which offers units from Bt13 million apiece – or Bt310,000 per square metre – is the foreign market, the CEO added.
Sansiri president Srettha Thavisin also said that condominium demand among foreigners wishing to buy had picked up strongly, especially for units priced above Bt5 million.
Last year, the company recorded Bt3.5 billion in presales from foreign customers, and it expects overseas presales of up to Bt5 billion from its overall presales target of Bt42 billion this year.
This year’s presales goal is 47 per cent higher than the Bt28.5 billion achieved in 2015.
Sansiri’s total revenue is targeted to come in at Bt36 billion this year.
Most of the developer’s foreign buyers are from Asian markets, such as Singapore, Japan, mainland China, Malaysia, Hong Kong and Taiwan, Srettha said, adding that it also hoped to see good sales from Europe and the United States.
Luxury prices lower than elsewhere
"Although luxury condominiums in Bangkok’s CBDs have high prices, they are still lower than for condominiums in many other Asian economies, especially Singapore, Hong Kong, and Taiwan," the president said.
The AEC’s implementation this year and the baht’s weakening from 33 per US dollar to between 35.50 and 36 are the main factors boosting foreign demand for condominiums in Bangkok’s CBDs.
Frank Leung, managing director of Hong Kong-based Fulcrum Capital, which invested Bt2.3 billion to buy 306 units of the Park 24 condominium from Proud Residences last year, said Thailand was the first Asean country in which the company was expanding its investment. The company sees business opportunity especially for residential projects, for which prices are still lower when compared with Asian markets like Hong Kong, Singapore and China.
The current weakness of the baht also benefits its investment in Thailand’s property market, he said.
Fulcrum Capital was established in 2009 to manage a private real-estate investment fund worth US$500 million (Bt17.81 billion).
The company has investments worth ฃ300 million (Bt15.27 billion) in residential projects in the United Kingdom that together comprise more than 1,000 units.
Aliwasa Pattanthabutr, managing director of property agency CB Richard Ellis (Thailand), said demand from foreign investors to buy luxury residences in the Kingdom continued to be strong because Thai luxury condo prices were still lower than those in other Asian markets.
"Most foreign buyers looking to buy properties in the region have a fixed budget to spend. With the baht declining, they can buy more expensive properties. In Phuket, we have recently been able to sell more expensive units in projects we represent," she said.
Foreign buyers of luxury residences costing more than Bt20 million now get much better value for money than they did last year, as the baht has fallen from 33 per US dollar to between 35 and 36 at the present time – a depreciation of up to 9 per cent so far this year – she explained.
The weakening of the baht has made decision-making easier for foreign customers looking to buy a home in Thailand, said James Duan, chief executive of property developer Fragrant Group.
Meanwhile, the AEC’s coming into effect this year is also a challenge for foreign investors to expand their investment in Asean by using Thailand as a gateway to expand their investment in the region, especially in CLMV countries (Cambodia, Laos, Myanmar and Vietnam).
"We see the potential to expand our investment to develop residential projects in provinces situated close to neighbouring countries, in order to serve demand from foreign buyers who expand their investment in Thailand and need to buy residential property here," said Thongma Vijitpongpun, president and CEO of Pruksa Real Estate.
Thailand has the potential to be a gateway for foreign investors to expand their investment in CLMV countries, as a result of which they will need residences in Bangkok and provinces situated close to those countries, in order to do their business, he said.
"We believe this presents a [positive] challenge [for developers] to do business this year, at a time when domestic demand will be flat or see only slight growth," he added.