Chinese eyes on condo investment

Chinese eyes on condo investment

Chinese investors are eyeing condominium development in Bangkok, with at least three groups planning to launch three sites next year worth a combined 5 billion baht near mass transit and in eastern Bangkok.

Surachet Kongcheep, associate director of research at property consultancy Colliers International Thailand, said there were more than 20 Chinese investors talking with the company this year looking at the possibility of  condo development in Thailand.

"Most of the Chinese investors visited us after the present government was established," he said. "They're seeking local landowners to form joint ventures with."

They claimed to be large developers in one of China's provinces, and mentioned investment of at least 500 million baht a project.

Most of them were interested in the middle-priced market segment of 70,000 to 80,000 baht a square metre and unit sizes of 35-40 sq m. Locations they looked at were Sois Thong Lor, Asok and On Nut as well as Rama IX and Ratchadaphisek roads.

Of three projects being scheduled to launch next year by Chinese developers, two will be located near the existing mass transit lines including a station along an On Nut extension line of the skytrain and a station along the subway on Ratchadaphisek Road.

Chinese developers that invest in Thailand usually have their own contractor to build the project, import construction materials from China and tap Chinese buyers as a target group, Mr Surachet said.

"Chinese investors look outside the country as its economy is not so good. Its government also uses preventive measures to avoid a property bubble," he said.

"Thailand is very attractive to them, as property prices are not as high as in Hong Kong or Singapore. The number of Chinese wanting to buy a condo in Thailand is increasing."

Besides Bangkok, Chinese investors are interested in Pattaya, Hua Hin and Chiang Mai, the favourite destinations of their compatriots. But condo development upcountry generally remains unattractive due to unfavourable markets.

Mr Surachet said there were also at least 15 Chinese clothing manufacturers with their own fashion brands looking to rent retail space in large department stores.

This year the Chinese made up the largest investor group interested in Thail property market, followed by those from Japan, Hong Kong and Singapore. The latter two were interested in commercial property such as office building or hotel to acquire with a budget of 3-4 billion baht per transaction.

"Many commercial properties with good occupancy or yield were either sold into a property fund or didn't want to sell off while those offered for sale were neither in good locations nor with good occupancy," said Mr Surachet.

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