Friday Asia Digest: Thailand’s Bump on the Way to the Top, World’s Richest Turn to Property


An ugly spat between local developers and government officials in Phuket, one of Thailand’s and Asia’s most luxurious resort property markets (pictured on right) threatens to derail the country’s stellar rise to real-estate supremacy evident in the last few years. A series of government-sponsored investigations over encroachment onto public land and allegations of corruption and illegal titles – involving national and intentional major players such as TCC, Minor Hotel Group, Kajima Overseas and award winning projects such as Trisara and Malaiwana – have swept across Thai media channels.

Government officials were quoted threatening the destruction of resorts and villas and revocation of land titles if illegal activities were proven, with 12 properties listed in the investigation and an alleged team of 366 investigators targeting nearly 600 hectares of island land. Thailand’s property sector, in recent weeks hailed by RREEF, of the Deustche Bank Group, as a highly recommended destination for international funds seeking high return, and with world-leading luxury market positioning, may suffer greatly from the ensuing collateral publicity damage and loss of foreign investor confidence, should these issues remain unsettled or unclear in coming months.

Thailand’s property market will benefit from the Asean Economic Community (AEC) when it comes into effect in 2015, property experts said. Meanwhile, Thailand’s property developers could face labour shortage if foreign labour from Cambodia, Myanmar and Laos move out from Thailand to their own countries, possibly following the casino and gaming resort infrastructure boom sweeping the south-east asian regions. At present, Thailand’s property and construction business faces labour shortage amid rising demand for residential and infrastructure projects since 2010.

* Myanmar’s far-too-swiftly-heating property market – a result of the country’s sudden sharp influx of foreign interest and a pool of local funds with nowhere else to go until recently, as a result of its decades-long isolated military and foreign relations philosophy – is still struggling. Frontier market venturists “Capital Exploits” , as mentioned in last week’s post, have forsaken their interest in the fledgling economy, setting their sights on the opportunity they see these days in Fiji’s sustainable community initiatives, in an event which they hope may be the harbinger of a flagship development spear-heading Asia’s green revolution. From a traditional property investors perspective, however, Fiji unfortunately remains a less-than-regulated environment, internationally infamous for coups, land grabs, corruption and other causes for concern for the remote investor.

Big Asian Money Finds Solace in Real-Estate

A report profiling ultra affluent real estate investors in six Asian prominent markets and detailing the common characteristics of over 11,730 Asian Ultra High Net Worth (UHNW) real estate investors has been released this week – profiling a highly sought after investor base worth more than 1.9 trillion USD. Real estate remains an asset class of choice for Asian UHNW investors, the report reveals – an added 70 billion USD of investment flows into real estate in 2011 were directly attributable to ultra wealthy investors, who are estimated to be reverting to their original modus operandi after the losses they incurred on more complex instruments, with a return to more tangible assets such as bricks and mortar.

In the Middle East, where many Asian investors have traditionally fueled the world’s most expensive luxury markets of Singapore and Hong-Kong, that money has been turning west, increasingly buying into NYC, London, and other formerly sky-high markets, as covered previously, seeking security. Qatar, which now plans to turn some of its prime real estate assets into hotels, capitalising on the Harrods brand to build a chain of international resorts, is a prime example of how real-estate has offered the gulf funds the freedom to seize opportunities as they arise.

Kuwait and abu-Dhabi, similarly, have had some high profile fund deals publicized as well. Despite a swiftly heating up semi-recovery market in the west, driven mainly by competition between Asian and other foreign funds, all vying for the same limited pool of trophy assets, these buyers continue to grab for more western commercial real estate because of the demand for both yield and security.

Global Gossip

* The Imperial Mansion, Beijing is the name of the new Marriott Executive Apartments Resort, a 220-unit apartment block and its fifth extended stay property in China. The Mansion, is located within the capital city’s busy central business and leisure district, next door to the Forbidden City, the world’s largest imperial palace (pictured below). The company claims it’s a “five-star, full-service hotel with the space, ambience and privacy of residential living”. The property offers studios, one-, two- and three-bedroom apartments ranging from 64 to 228 square meters. Each apartment features a professional workspace and full kitchen, and all are equipped with state-of-the-art entertainment systems. A gourmet breakfast is served daily and guests have 24-hour access to the fitness center, complete with a spacious playroom for children and heated 25-meter pool, overseeing the imperial landscape of the Forbidden City.

* The Wall-Street Journal, traditionally a “pure business” publication, is finally recognizing the relevance of the new era of cross-border property investments to a large proportion of its affluent readers. The paper said its new weekly section covering the global luxury real-estate marke, debuting this week, will be called Mansion, and is one of several investments the newspaper is considering at a time when its parent company, News Corp. (NWSA, NWS.AU), is preparing to spin off Dow Jones & Co., publisher of The Wall Street Journal as well as Dow Jones Newswires, along with other publishing assets from its entertainment businesses. The new section’s stories will include property coverage with industry statistics and a focus on high-end financing, luxury real-estate topics, distinctive neighborhoods and properties around the world.

(Partial list of Sources – “The Phuket Insider“, “World Property Channel“, “Fox Business“, “Channel News Asia, Singapore“, “The Nation, Thailand“, “Gnom National News Service, Spain“, “Financial Times“,”Bloomberg“)

(Pic 1 – Phuket Sunset / Dennis Wong / Pic 2 – The Forbidden City, Beijing, China / Ivan Walsh)

About Author

Ziv Magen

Ziv Magen (G+) is an Australian, and has been living alternately in Japan and Australia for the past decade. "Born and bred" an IT project manager, he has made the transition to full-time real-estate investing several years ago, and subsequently opened a buyers' and proxy agency - assisting others in remotely capitalising on Asia's booming property market.


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