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Post-Brexit property values drop attracting Thai investors

Post-Brexit property values drop attracting Thai investors

The search for receding values is a key metric for real estate investors whose mantra of buy low, and sell high can be heard from the rooftops. One case in point is the U.K. property market that is seeing a rising tide of activity from Thailand.

Clearly currency and receding values are the two key driver’s of demand. Over the past twelve months the Thai baht has increased from THB55 to a current THB45 again the British pound.

Making news in Thailand in the national press has been Singha Estate and the FICO Group who last year bought the Jupiter Hotels portfolio and are now reportedly looking at three additional hotel assets.

This week in The Nation newspaper a report said that a top executive of leading real estate development firm Sansiri indicated the firm was keenly looking at opportunities to re-enter the U.K. market. In my own discussions with other Bangkok-based property firms the emerging post-Brexit landscape is a magnetic subject.

According to data released by Thailand’s Government Housing Bank’s REIC (real estate information center for the period of January through July the number of residential launches has dropped by 19% year-on-year. The apparent slowdown is what is spurring Thai developers to look outside of the country to continue propelling revenue streams.

Looking back a few years these same public companies fueled expansion into secondary domestic locations outside of Bangkok in markets such as Phuket, Pattaya, Cha Am/Pattaya and Chiang Mai. Rolling forward to the present the absorption capacity of these markets has been stretched and there is a mismatch for high-velocity appetite versus slower sales pace.

Looking forward to 2017 the question for Thai investors is how will the overseas acquisition and projects take shape. Currency flips continue to create a volatile edge to the market and while historically the U.K. has been a sterling real estate sector, is there now a new normal?

 

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Bill Barnett has over 30 years of experience in the Asian hospitality and property markets. He is considered to be a leading authority on real estate trends across Asia, and has sat at almost every seat around the hospitality and real estate table. Bill promotes industry insight through regular conference speaking engagements at key events and spends substantial time with his feet on the ground on research projects and gathering market intelligence. Over the past few years he has released four books on Asian property topics.

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