Thailand is among the most lucrative markets
source: The Nation April 11, 2008

Colliers' research predicts a strong year for Thai, Indian and Chinese real estate

Thailand, India and China are the most lucrative Asian countries for foreign property investors, says a research report by international property consultant Colliers International Thailand.

The report, released at this week's Colliers International Asian Valuation and Advisory Conference being held at the Arnoma Hotel in Bangkok, which ends today, said property valuations in these three countries had risen 10-20 per cent so far this year and had room for high returns.

David Faulkner, regional director at Colliers International (Hong Kong), said foreigners investing in Thailand, India and China could enjoy higher returns compared with other countries despite land prices having gone up 25 per cent.

Colliers International Thailand said with current market trends, Thailand could see combined property investment of about Bt70 billion this year, more than doubling from Bt30 billion last year.

Segments in which foreign investors can expect good returns are retail space, serviced apartments, office buildings, hotels and resorts.

Faulkner said property valuations in South Korea, Pakistan, Taiwan and Indonesia were also expected to rise 10-20 per cent this year.

Meanwhile, property valuations in Vietnam, Hong Kong and the Philippines have risen 25-40 per cent.

Singaporean properties have also witnessed a strong rise of up to 50 per cent this year.

Patima Jeerapaet, Colliers' managing director for Thailand, said commercial properties, including retail properties, serviced apartments and office buildings in Bangkok, were coveted by foreign investors. Hotels and resorts at locations like Phuket, Hua Hin, Pattaya and Koh Samui also attract foreign investors, many of whom have plans to set up joint ventures with local partners.

He said foreigners investing in Thailand were most likely to do so with a strategic local partner who had experience conducting business in Thailand.

"Three or four of our customers are negotiating to set up joint ventures with local partners, with both listed and unlisted property developers," Patima said.

In the first quarter, the Japanese-based Asian Partnership Fund Group set up a joint venture with the Mitr Phol Group.

Together they spent Bt630 million to build the Zeavola Hotel on Koh Phi Phi in Krabi.

Australian property management company Macquarie Global Property Advisers has recommended that MGP Hazel (Mauritius) No 1 buy 130 million shares in Siam2you.

Earlier, CB Richard Ellis also said Asia's real-estate market was outperforming the US and European markets.

Jane Murray, head of research for the Asia-Pacific at Jones Lang LaSalle, said many Asian property markets had performed strongly in the past two years and that international investors now expected Thailand to outperform regional competitors.

As a result of lessons learned from the 1997 Asian financial crisis, the Asia-Pacific has weathered the credit crunch, which had the potential to derail the property markets to date.

Investment volumes have held up well over the past six months.

The latest Jones Lang LaSalle "Global Capital Flows" research report shows total investment in the Asia-Pacific rose 27 per cent last year, with the second half accounting for 55 per cent of total volume.

Cross-border investment surged to 47 per cent of total activity last year, up from 33 per cent in 2006.

"This outcome reflects the interest in the region's real-estate markets and the expectation of comparatively attractive returns over the short to medium term," Murray said.

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