Even with domestic demand expected to pick up and Thailand’s economy likely to rebound this year, developers look set to ramp up efforts to reach international buyers. The move comes after Thai homebuilders recorded encouraging international sales totals in 2016.
CBRE released its Bangkok Real Estate Market Outlook 2017 and among the report’s highlights was the fact developers will target both foreign buyers to purchase units and international partners to help contribute to future projects moving forward.
“Developers have seen increasing interest from international buyers recently with units priced under THB 10 million in central Bangkok being particularly attractive,” Aliwassa Pathnadabutr, Managing Director at CBRE Thailand, told Dot Property. “In many cases, international buyers are using these units as a second home. Bangkok is a popular tourist destination and a project such as The Line Jatujak, with an attractive price point in a popular location for visitors, has proven to be a hit with international buyers.”
Of course, marketing projects to foreign buyers is not a simple process. Not only must a firm have a desirable project in the right location, but it must also be reaching an audience who has purchasing power and interest in buying a unit. Some developers have had success appointing overseas sales agents while other firms found directly marketing to buyers at roadshows and property exhibition events to be lucrative.
“Developers with a proven track record tend to be the ones most successful at attracting international buyers,” Aliwassa explained. “They know who they are targeting with their projects and know the location they are marketing and the price point that will make it appealing.”
According to CBRE’s research, branded luxury and superluxury projects are also attractive to international buyers. Units at these developments can cost upwards of THB 50 million and are usually located in prime locations such as Wireless Road or near the riverside.
“International buyers looking at luxury developments prefer branded residences since they are able to recognize the brand as being prestigious. Thai developers may be able to market their luxury projects without being branded to domestic consumers, but these are not as attractive to international buyers who won’t have the same familiarity with the company,” Aliwassa stated. “ The Four Seasons Residences by Country Group and The Ritz Carlton Residences at Pace’s MahaNakhon are two examples of superluxury projects with branded residences that appealed to foreign buyers.”
Thai developers team up with foreign firms
A number of developers in Thailand have been looking to partner with their international counterparts for a wide range of projects and CBRE noted that this is another trend that is likely to continue. Firms from China, Hong Kong and Japan have been the most active in Thailand and will continue to be so in 2017.
CBRE research added that one reason for the increase in foreign investment is due to Thai banks becoming more cautious when lending to developers. There is no one preferred segment for these joint ventures with residential, commercial, retail and hospitality all seeing international investment in the past few years. Some foreign firms could also take a look at value-add projects in the country with the assistance of a domestic partner.
“There is strength in the Thai market and that is why international interest in Thai real estate continues to increase,” Aliwassa said. “There is less speculation in Thailand’s real estate market when compared to others in the region. Additionally, it is a resilient market. It has kept moving upward since 1988. Even in the aftermath of instability, the Thailand real estate market has always rebounded quickly.”