Chinese eye Thai condo JV projects

Construction News
The general view of condominium building in Bangkok. (Bangkok Post file photo)
The general view of condominium building in Bangkok. (Bangkok Post file photo)

At least seven Chinese investors with a combined 10 billion baht are looking for joint ventures in Thai condominium development this year due to a slowdown in their country’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 who may draw buyers to acquire a condo unit in Thailand.

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 recurring-income assets such as retail, hotels, serviced apartments and industrial estates. They eye a yield of 8-10% for retail, 7% for hotels and serviced apartments and 10-15% for the industrial sector.

Harrison is in talks with seven Chinese investors prepared to spend 1.5 billion 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 1.7 billion 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 25 billion baht in sales this year, up from last year’s 7 billion, which rose by 18% from 2014.

Major drivers for the huge growth will be sales of a residential project in London worth 6 billion baht and Chinese deals worth 6.25 billion.

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.