China’s largest property developer by contracted sales in the 1st half of 2017, Country Garden Holdings, is preparing to enter Thailand and has several projects ready to launch next year, according to media reports. The developer has already launched developments in Vietnam, Malaysia, and Indonesia.
The company is based in the Chinese city of Guangdong and is now in the process of setting up Country Garden Thailand. While Country Garden won’t be the 1st foreign developer to enter the market, experts are unsure of its plans and how the population will react.
“In addition to Bangkok, Country Garden is also scouting for sites in Pattaya and Phuket. Many people in Thailand are not aware of Country Garden. And those in the know associate it with a suburban Chinese developer of mediocre properties,” sources tell the Chiang Rai Times.
The developer is hoping to tap into the real estate boom currently happening in Thailand. There is also an increase in demand from Chinese buyers for Thai property that the developer may able to capture.
Sansiri is a Thai developer that has targeted foreign buyers having opened offices in Hong Kong and mainland China. The company estimates that international buyers will account for THB10 billion of its sales this year after recording THB5.7 billion in foreign sales in 2015.
Most foreign buyers come from China, Hong Kong, Japan, Malaysia, Singapore, and Taiwan. Consumers in these locations believe the Thai market offers good value. Almost 70% of Sansiri’s international buyers last year came from Hong Kong and mainland China. In addition to attracting buyers to its projects, Country Garden will need to be mindful of the Chinese government which has been clamping down on overseas real estate investment.
“Country Garden’s initial projects in Thailand should be smaller scale so that it doesn’t invite Chinese government scrutiny. However, Beijing is keeping an eye out for projects that require major funding and borrowing. This has reined in overseas expansion of the property sector. But it doesn’t mean that they have to kill all the projects abroad,” says Alan Jin, Analyst at Mizuho Securities Asia, to the Chiang Rai Times.