Thai real estate drawing investment from Northeast Asia

Real estate investors and companies from China and Japan are bullish on properties around Thailand, pouring billions of dollars into the Thai market during the past few years with several firms saying they are planning to expand investments in the Kingdom.


Thai government statistics show that Japanese real estate firms have invested over $3 billion dollars in Thailand’s residential real estate market since 2013. At the same time, Thailand has emerged as the third most popular overseas location for Chinese homebuyers, with many choosing to actually occupy their Thai properties rather than acquiring them solely for investment purposes. Korean investors have devoted more funds to buying properties in Europe or America, but analysts say their interest in Thailand has been increasing.

Some analysts have voiced concerns that a bubble might begin to emerge in the upscale Bangkok condominium market. But the involvement of overseas developers with strong track records, the diversity of locations across the country and types of properties drawing investments, and the fact that many buyers are purchasing properties they themselves will occupy are indicators that the Thai real estate market’s gains are solid and healthy.

A significant amount of Japanese investment has been directed towards Bangkok and Chonburi provinces. Chonburi is home to many industrial estates that house Japanese manufacturing firms whose employees need residential properties. Chonburi is also part of the Eastern Economic Corridor, which the government intends to turn into showcase for a more advanced Thailand.

“We see strong demand to buy residential from both local and foreign buyers in Thailand, especially in locations with mass transit systems now that Thailand’s government has made a huge investment to develop the country’s infrastructure projects,”said Akira Ichikawa, president of Sumitomo Forestry Co Ltd.

“We decided to expand our investment in Chonburi province two years ago to serve the strong demand from industries, which now Thailand’s government is promoting through the Eastern Economic Corridor,’’ he said, adding that Sumitomo has formed joint ventures with local property developers, Grande Asset Hotels and Property Plc. and Property Perfect Plc.

Japanese developer Shinwa Group also said it plans to expand its investment in the building and construction industry in Thailand, following the launch of its first condominium project in Bangkok, which it said has been completely sold out.

Tomoyasu Yamabe and Wichai Chula-Olarnkul, co-chief executive officers of Shinwa said that they plan on investing about $60 million a year over the next few years in residential projects in Thailand.

Chinese investors have also been taking a shine to Thailand. The Kingdom ranks third as a location where Chinese citizens have been buying homes overseas. The five most popular areas are Pattaya, Phuket, Hua Hin, Bangkok and Samui.

“In the beginning, the purchase of property in Southeast Asia was for the purpose of investment, but with the policy changes in Thailand, we can clearly see a rise in purchasing for self-occupation,” a Pattaya real estate analyst told the 21st Century Business Herald, a Chinese business newspaper.