Posts Tagged ‘real estate’

Thailand Attracts Foreign Spending

Friday, September 24th, 2010

Thailand will attract increased foreign investment and infrastructure spending, a “more significant driver” of growth that will boost industrial estate developers such as  Amata Corp., according to JPMorgan Chase & Co.

Foreign direct investment that increased to $7.4 billion in the first half of 2010 is poised to accelerate in 2011, Sriyan Pietersz and Adrian Mowat wrote in a report dated yesterday. Japan and China may be “key players” in the spending that may also boost Hemaraj Land & Development Pcl and Rojana Industrial Park Pcl, the analysts wrote.

Ford Motor Co. and Mazda Motor Corp. said in August they plan to spend $350 million to expand a jointly owned pickup truck factory in Thailand, shrugging off the country’s worst riots in almost two decades. Investment commitments from automobile and electronics companies that include Nissan Motor Co. and Toshiba Corp. exceed $2 billion, according to JPMorgan.

“The strength of the Japanese yen could drive another wave of investment into Thailand, historically Japan’s largest investment destination in Southeast Asia,” the analysts said. “We also see scope for increasing investment by Chinese corporates or multinational corporates operating in China as cost pressures accelerate.”

The increased infrastructure and corporate spending may help banks and other companies such as Glow Energy Pcl and Thai Tap Water Supply Co., according to the analysts.

Yen’s Strength

Japan’s yen climbed to a 15-year high against the U.S. dollar, prompting the government this month to sell the currency for the first time since 2004. In China, foreign companies Honda Motor Co. and Foxconn Technology Group have been forced to raise wages following strikes and suicide attempts.

As foreign investment accelerates, domestic capital expenditure is likely to lag behind given the “slack” in overall capacity, with utilization rates at about 67 percent in July, according to JPMorgan.

Still, capacity utilization rates in the petroleum, chemical, pulp and paper, and construction materials industries are at relatively elevated levels, offering “scope for a modest recovery” in capital expenditure, the brokerage said.

“Given the relatively large scale of operations and high capital intensity in these sectors, corporates may seize the opportunity for expansion given Thai baht strength and cheap cost of funds,” the analysts said.

Thailand’s economy may grow as much as 7.5 percent in 2010, the fastest pace in 15 years, according to a July 23 forecast by the central bank. Improving prospects for the economy have helped to drive a 29 percent gain in the benchmark SET Index this year and lifted the baht to a 13-year high.


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Russian airline announces new route to Thailand

Thursday, September 16th, 2010

The Russians are coming.  Although many of them are already here, or have been and gone, the announcement that Aeroflot, the Russian national carrier, will start a three times a week high season service to Phuket is good for tourism and property. In the first quarter of 2010 Russian visitors were first, followed by the United Kingdom, Germany, Switzerland and China in the top five. Russians are interested in freehold condominium units, according to the Phuket Real Estate Association.

Russians like to purchase large, expensive villas and there are a number of local real estate agents who specialize in this Russian market. Laguna Phuket is a favourite although most of the units are not used or even in rental pools; they are mainly there for investment only. Russians tend to not like other people using their units. There are Russians working on Phuket for tour companies and there is even a Russian language magazine, a Russian version of the established Phuket Magazine.

In addition to Aeroflot, Transaero, a Russian charter airline, flies direct to Phuket and in July this year Pegas Touristik, a Russian tour operator, announced it would increase flights to Bangkok and Phuket from eight Russians cities. In January-June 2010 Russian visitors to Thailand totaled 305,415, a 10.28 percent increase on the previous year, with a large proportion of visitors traveling on to Phuket.

Russian tourists are not everyone’s cup of tea. Some hotel properties in Phuket are reluctant to have them as guests. but there is no denying the Russians’ determination to come here for a holiday, and, maybe, investment. The shortest airline flight from Moscow to Phuket via Vienna, Austria, is 29 hours.


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Foreign investors will return to Thailand’s coastal resorts

Wednesday, July 14th, 2010

The cyclical nature of the property market in Thailand’s coastal resorts means foreign investors will return – sooner or later.

Unlike the constant demand for real estate in Bangkok, the property markets in Thailand’s coastal holiday destinations such as Pattaya, Phuket, and Samui have remained subdued during the first half of 2010.

Professional real estate services firm Jones Lang LaSalle said that, dominated by foreign investors, investment activity in these areas has witnessed a marked slowdown since the global financial crisis escalated during the final quarter of 2008.

But as many parts of the world have seen signs of economic recovery, a number of international investors are regaining their financial strength and are expected to come back into Thailand’s holiday property markets in the near future.

In addition, Jones Lang Lasalle noted, there are several good resort properties and land offered for sale in these markets. Selling prices are generally very attractive with some properties being offered for sale at a price discounted by between 20 and 30 per cent from the peak levels seen three or fours years ago.

Umpon Thepnumsommanus, Director of Investment at Jones Lang LaSalle, said: “Smart investors understand the cyclical nature of property markets. Sooner or later, these investors will come back.”

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