THURSDAY, March 28, 2024
nationthailand

Foreign investors keep wallets open for residential market

Foreign investors keep wallets open for residential market

FOREIGN ENTITIES continue to expand their investment in Thailand’s property market, mainly via the establishment of joint ventures (JVs) with local partners for the development of residential projects – and with a particular focus on condominiums located close to the mass-transit system in greater Bangkok.


 
A survey by The Nation has found that property developers from Japan invested nearly Bt100 billion via JVs with Thai partners over the past five years.
For example, Shinwa Group, a large Japanese conglomerate, has established W-Shinwa with Woraluk Property to develop the Runesu Thonglor 5 condominium project, which is worth more than Bt1.2 billion.
Sena Development has also formed a JV with a Japanese company, Hankyu Realty, to develop residential projects in Thailand, with the first projects due to be launched this year.
Mitsui Fudosan, meanwhile, has invested more than Bt40 billion over the past three years via a JV with another listed developer, Ananda Development.
The Japanese company is also interested in expanding its investment in other areas, such as hotels, offices and retail in the next phase of its activity in the Kingdom.
Mitsubishi Estate Group also has a JV – with AP (Thailand) – through which condominium projects in Thailand worth over Bt20 billion have been developed during the past three years.
Moreover, Singaporean businesses are also investing in the Thai property market, doing so in both the residential and hospitality sectors.
Frasers Centrepoint is one such company, with the business proposing to spend Bt13.23 billion to take a major stake in a Thai property firm.
Property firms from mainland China are also expanding their investment in Thailand, such as King Wai Group’s Bt300-million outlay earlier this year to purchase a 45.45-per-cent stake in Keppel Thai Property, a subsidiary of Singapore’s Keppel Corp, for the development of residential projects here.
Tomoyasu Yamabe, co-chief executive officer of W-Shinwa, said Shinwa Group – founded 60 years ago and headquartered in Osaka – was now a large conglomerate with many subsidiaries and affiliates.
Its property-development business is renowned and well-accepted in the industry, he added.
The group’s policy is to expand investment overseas, and it has selected Thailand as a country with high potential for exponential growth in the property sector, he explained.
Thailand is also at the centre of Southeast Asia, Yamabe said, and it will be a solid base for expanding into other countries in the region, as well as into the United States and Europe.
“Before finalising the W-Shinwa joint venture, we [held discussions] with many firms. We chose to join hands with Woraluk Property because our policy, management and vision [are] in the same direction.
“This is the first joint venture for Shinwa Group, and we see a business opportunity due to strong confidence [and we are confident] in the Thai market. Despite [the large number of] condominium projects in Thailand, if we have a clear vision in design and construction, as well as location and the right timing, we can be successful.
“In Japan, property projects developed under the Shinwa Group brand are well-accepted for quality [rather] than pricing. We believe that with our reputation and past work, we will receive good feedback from target customers, who are Japanese expatriates in Thailand as well as Thais and other foreigners who prefer authentic Japanese living, which we can definitely guarantee [for] the first time in Thailand,” the co-CEO said.
 
Towering deal 
Meanwhile, in the latest foreign deal, alternative-investment manager Apollo Global Management and global investment bank Goldman Sachs are investing about Bt8.4 billion in Thailand’s tallest tower – MahaNakhon Tower – by way of an equity injection and financing of two of Pace Development Corp subsidiaries.
Philip Mintz, head of Apollo’s real-estate business in Asia, said a well-constructed trophy tower and working with a group as experienced and capable as Pace was a compelling combination.
“We look forward to working with Pace for many years to enhance the value of what we believe is one of the best real-estate assets in Asia,” he added.
The aggressive investment by foreign investors in Thailand’s property market is to a large extent thanks to the country’s infrastructure development, which is driving demand for residential projects situated close to the mass-transit system in Bangkok and suburban areas.
Foreign developers are rising to the challenge of expanding their investment here, looking ahead to future residential demand when the new rail and other infrastructure projects are completed in the next five to 10 years, a property expert said.
 This year alone, the government plans to invest more than Bt800 billion in developing infrastructure projects that will improve both the rail and road systems around the country, he added.
 

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