ROH-GROREIT dispute exposes liquidity strain in Thai property sector

The failure by Royal Orchid Hotel (Thailand) Plc (ROH) to complete its scheduled buy-back of the Royal Orchid Sheraton Hotel from GROREIT has raised concerns that Thailand’s property market is facing deeper liquidity pressure than headline recovery figures suggest.

The issue is no longer being viewed as a problem affecting only one company. Industry observers say it reflects a broader struggle among real estate operators, many of whom are now prioritising cashflow and liquidity over expansion amid high financing costs and a sluggish asset sales market.

ROH had been due to buy back the Royal Orchid Sheraton Hotel for 4.87 billion baht on July 14. However, the transaction was not completed by the deadline, prompting One Asset Management, as manager of Grande Royal Orchid Hospitality Real Estate Investment Trust (GROREIT), to notify the Stock Exchange of Thailand that ROH had failed to comply with the contract conditions.

The trust manager then began taking steps under the agreement, including notifying ROH to comply within 30 days, preparing for temporary hotel management through the Marriott network, and seeking debt relief from the Government Savings Bank.

ROH later clarified that it did not intend to default on the agreement and insisted it had financing support worth more than US$187 million from OCP Asia. The company said the delay stemmed from the payment structure between the lender and the asset seller.

Even so, the incident has unsettled unit holders, bondholders and capital market investors because it marks the first time a Thai REIT buy-back structure has faced a failure to complete a repurchase on schedule.

The case has also put the financial position of ROH and its parent company, Grande Asset Hotels and Property Plc (GRAND), under scrutiny. Both companies have recorded accumulated losses, while auditors have raised observations on several issues, including loans to related parties, reliance on asset sales to generate liquidity, and GRAND’s ongoing bond restructuring.

Property figures improve, but recovery remains fragile

A senior real estate source told Thansettakij that the ROH case should be seen as part of a wider liquidity problem across the industry, not as an isolated corporate dispute.

Many developers and property firms are now operating under a “Liquidity First” strategy, focusing on preserving cash rather than expanding their businesses. The source said financing costs remain high, while selling hotels, office buildings or land to raise funds has become more difficult than in previous market cycles.

In GRAND’s case, the company has tried to sell several assets, including hotels, office buildings and riverside land along the Chao Phraya River. However, current market conditions have made it difficult to close transactions quickly, delaying the company’s cashflow plans.

According to the source, ROH’s problem was not a lack of financing, but the process and conditions for transferring funds between the lender, buyer and seller, which prevented the transaction from closing on the scheduled date.

‘Statistical illusion’ behind property rebound

The source also warned that several 2026 property indicators may be giving an overly positive picture of the market.

New project launches in the second quarter were worth about 80 billion baht, rising both year on year and quarter on quarter. However, if one large ultra-luxury project worth around 37 billion baht is excluded, total new launch value falls to about 50 billion baht, one of the lower levels seen in the market.

Presales also appear to have improved compared with last year, but part of that growth came from an abnormally low base in 2025, when the market was affected by an earthquake and many developers delayed condominium launches. As a result, this year’s growth may look stronger than the actual market recovery.

Transfers of ownership in the first half of 2026 also benefited from a low comparison base. Last year, many buyers postponed transfers while waiting for the Bank of Thailand to ease loan-to-value, or LTV, measures. This made first-quarter 2025 transfer figures unusually low, causing this year’s numbers to appear stronger even though actual transaction volume has not increased significantly.

The source said growth in sales, transfers and new launches could slow in the second half as the comparison base from last year becomes higher, giving a clearer picture of the market’s real condition.

Liquidity and confidence remain key challenges

The ROH-GROREIT case is therefore more than a dispute over a 4.87-billion-baht hotel buy-back. It has become a signal of the liquidity pressure facing many property operators in Thailand.

Although ROH insists financing is available and negotiations are continuing to complete the transaction within the required timeframe, the incident underlines how vulnerable the sector remains in an environment of high financing costs, difficult asset sales and incomplete market recovery.

For many property firms, the challenge ahead will be walking a fine line between preserving liquidity and maintaining investor confidence — a balance that could determine the industry’s direction over the coming months.

Source: Thansettakij