Opportunity for investment abroad
By Roxanne James

Chinese Investors Surge on JVs in Thailand Condominiums

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According to real estate brokers in Thailand, at least seven Chinese investors with a combined 10bn baht are looking for joint ventures in Thai condominium development this year due to a slowdown in China's construction sector and overall economy.

Alan Lin, managing director of property brokerage Harrison Co said the Chinese investors included contractors, developers, property funds and construction material makers. "As the Chinese economy tumbles, many Chinese investors in property-related business are looking for an opportunity for investment abroad," he said.

"The first destination is normally Britain, followed by Australia, the US and Asian countries".

Those most interested in Thai property are contractors with expertise in high-rise construction of 70-100 storeys and connections with Chinese partners capable of introducing potential buyers of condo units in the country.

Chinese developers interested in Thailand are mostly medium-sized operators unable to compete with huge developers with bigger funds to bid for land plots.

Property funds in China are looking to invest in income-generating assets such as retail, hotels, serviced apartments and industrial estates. Yields of 8-10% for retail, 7% for hotels and serviced apartments and 10-15% for the industrial sector are readily available in Thailand in the current climate.

Harrison is in talks with seven Chinese investors prepared to spend 1.5 bn baht per deal in a joint venture with Thai developers. Locations of interest include Ratchadaphisek Road, the riverside area and Sukhumvit Road in Bangkok as well as Pattaya, Phuket and Chiang Mai.

One Chinese contractor plans to spend 1.7bn baht on a high-priced condo project worth 5 billion baht in central Bangkok. The deal will be finalised in the first quarter.

Harrison expects 25bn baht in sales this year, up from last year's 7bn, which rose by 18% from 2014 with major drivers for growth expected to come from sales of a residential project in London worth 6bn billion baht and Chinese deals worth 6.25bn.

Mr Lin said the property market this year would be stable, but growth would be seen in locations along the Purple Line and inner-city areas such as Silom, Lang Suan, Sathon and Sukhumvit roads.

There has been a general surge of interest in income-generating assets among international property investors in recent years, something that is set to continue into 2016. Assets that have achieved exponential market growth internationally include hotel rooms and serviced apartments, with student accommodation grabbing a significant market share.

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