Opportunites, challenges lie ahead
Developers to consider investments abroad only after study of legal issues
Developers believe the property market will benefit from the Asean Economic Community that will be effective in 2015 as regional investors will move around the region and there will be need for accommodation.
Pruksa Real Estate chief executive officer Thongma Vijitpongpun said it was interested in investing in AEC countries, especially Indonesia, Malaysia and the Philippines, which have the population bases to support demand. However, the company will wait to learn about the legal requirements for developing residential projects in each country, he said.
"Our experience with investing in Vietnam, India and Maldives has taught us that the main problem when expanding overseas is acquiring knowledge about the country's laws and consumer behaviour," he said, adding that this takes time.
Land & Houses senior vice president Naporn Soonthornjitcharoen, who had experience investing in the Philippines and Indonesia more than 15 years ago, has said his company also would take time to study the legalities of regional investment after the AEC goes into effect, and base its decisions on what the challenges are.
As well, developers considering doing business in foreign countries must study buyers' behaviour in such markets so they know how to design homes to match their lifestyles. This holds true not only for Thai property firms looking to expand into other AEC countries, but also for developers in those countries looking to invest here, he said.
SC Asset Corporation chief operating officer Kree Dejchai said Thailand's market would not suffer under the AEC because it would still be difficult for foreign developers to expand into this country.
"Residential design has to match the demand, and tastes differ in each country. It is likely that will make it difficult for us to expand in Asean. We have to take time to study consumer behaviour and the demand before making an investment," he said.
However, the AEC will challenge local property firms to develop residential projects in Thai resort destinations as investors from Singapore, Malaysia, Brunei and elsewhere require a second home in this country. That is why SC Asset is interested in expanding investment in resort destinations, focusing on both local and foreigners' demand, Kree said.
Supalai managing director Atip Bichanond said there would also be demand in destinations close to neighbouring countries, such as Udon Thani province.
"We are interested in expanding our investment in Udon Thani to serve both locals and foreigners who marry Thais, and foreign investors who will use that province as a gateway to Laos," he said.
Other listed companies are also interested in investing in Udon Thani province, such as Land & Houses.
Meanwhile, the Home Builder Association is preparing to upgrade construction standards to compete with Asean builders, the association's president Dr Patchara Tantayanyong said. She said the AEC would open up opportunities for both Thai builders expanding into other Asean countries and vice versa. Therefore Thai companies would need to upgrade to meet regional standards.
The association's strategy aims to upgrade professional standards for home-builders so that they are well accepted by consumers in terms of quality and reliability, which will result in industry expansion. It is also meant to enhance operators' strengths in terms of knowledge and project-management capabilities, while reducing disputes between builders and consumers, as well as to promote the association to the general public in preparation for the AEC.