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News Release

Bangkok

Chinese investment in Thailand’s real estate markets expected to grow


Institutional investors from China have showed keen interest in Thailand's real estate markets in recent years. While real estate investment activity by the Chinese has not been as buoyant as many may expect, these Chinese investors are likely to play a bigger role in the Thai market in the near future, according to JLL, a professional services firm specialising in real estate.

 

Mrs. Suphin Mechuchep, Managing Director of JLL Thailand, says "Chinese corporations have been actively looking for opportunities to invest in a wide range of real estate assets in Bangkok and major resort markets. Nonetheless, despite keen interest, investment activity by the Chinese to-date has remained limited with most of the transactions being joint ventures in property development projects or acquisitions of stakes in Thai property development companies."

 

Some of the major Thai-Chinese joint venture property development projects are Baba Beach Club Phang Nga, comprising 16 hotel villas, 104 residential suites and 42 villas by China's Junfa Real Estate Co. Ltd. and Charn Issara Development Plc; The Terminal Phuket, a mixed-use development comprising condominium, hotel and serviced apartments, community mall, office building and clubhouse facility, by Royal Lee Asset from China; and 30-storey condominium project Artemis Sukhumvit 77 by Chinese state-owned firm China Tianchen Engineering Corporation.

 

"It is apparent that Chinese investors have strong appetite for investment opportunities in Thailand. A rapidly growing number of enquiries that JLL offices in Thailand and China have received exemplifies the case. However, most of these investors have adopted a cautious approach at this point, needing more time to explore alternative investment options that are available and understand relevant legislations and regulations," Mrs. Suphin.

 

"Having said that, as more Chinese investors are getting to understand the investment landscape in Thailand's real estate sectors better, we expect Chinese investment to rise soon," she adds.

 

Mr. Mike Batchelor, Managing Director for Investment Sales – Asia, JLL's Hotels and Hospitality Group, says "We expect to see more activity from Chinese investors in 2017 as the Chinese have invested heavily in overseas real estate and continued to look for opportunities abroad to diversify their risks. Thailand is considered to be one of the most attractive markets in the region, particularly for hospitality-related investment."

 

Mr. Batchelor's view is supported by a separate report by JLL.

 

According to JLL's Global Capital Flows report, China hit a record of US$33 billion in overseas commercial and residential property investment in 2016, an increase of nearly 53 percent year-on-year,

 

While investment in land, offices and hotels account for 90 percent of all Chinese outbound capital in the last three years, the hotel and industrial sectors showed the largest increase in 2016 due to significant transactions in the U.S. in the form of portfolio sales and Chinese appetite for industrial parks.

 

"Hotel activity last year was boosted by the purchase of Strategic Hotels and Resorts by Anbang Insurance for over US$6 billion," says Mr. David Green-Morgan, JLL's Global Capital Markets Research Director. "China Life Insurance has secured assets across the hotel and office sectors with portfolio purchases from the Starwood Capital Group and an office tower in Manhattan; sovereign wealth fund Chinese Investment Corporation has been active in the office sector in New York as well," he adds.

 

Land acquisitions by Chinese investors made a comeback last year, with a rise of 44 percent following significant transactions in Hong Kong, Australia and Malaysia.

 

"We do believe that Chinese investors will continue to be major movers of capital into global real estate for many years to come," says Mr. Green-Morgan. "But a similar increase in 2017 may be challenging given the recent discussion about China monitoring its capital outflows."