An influx of companies from Japan, Hong Kong, and China invested in Thailand’s real estate market targeting condo projects located by Bangkok’s mass transit system, according to local media reports. The increased investment comes as the government plans to develop infrastructure projects over the next 5 years.
“Thailand has a number of economic corridor projects and the country is considered the hub of the Greater Mekong sub-region, while Bangkok has continued to attract people as the centre of the economy. Those factors bring about sustainable housing demand and as a result we have expanded our investment in Thailand since the year 2014,” says Toshiyuki Hoshino, Senior Managing Executive Officer and Executive General Manager of International Business Headquarters of Tokyu Corp.
Tokyu Corp is one of many Japanese companies to increase investment in Thailand’s property market since 2013. The most popular way for these companies to expand their Thai real estate holdings has been to partner with Thai property developers through joint venture projects.
Combined initial investment capital from Japan to Thailand was estimated to be THB1.9 trillion in 2015 and this has likely increased. According to Board of Investment (BOI) statistics, Japan is Thailand’s leading foreign direct investor (FDI). The country contributes 39% of total FDI with Singapore the second largest investor. China, Hong Kong and Taiwan complete the top 5 with a majority of this investment being in condo projects.
“We consider joint ventures with Chinese firms when we see the opportunity to promote our products to Chinese buyers who are interested in buying residential property in Thailand, because our partner will also support both our capital and marketing,” says Pairoj Watanavarodom, Managing Director of WJSP Property Plc, to The Nation.
Meanwhile Thai property companies have needed to adjust their approach to succeed in the current market. Costs and risks are higher and joint venture partnerships help defray some of this. They also provide them with bigger budgets for marketing efforts.
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