The peaceful outcome of the election has sparked renewed interest from institutional investors scared away from the local property market ever since the 2008 airport closures, with at least three deals in Bangkok and Phuket worth 5 billion baht possible by year-end.
Longlom Bunnag, chairman of Jones Lang LaSalle (Thailand), said institutional investors began trickling back a few weeks after the previous government called the election.
“They thought it a good sign for the country,” he said at an industry event sponsored by Property Report Live last week.
“Now having visited us again, they plan to return to resume their investment, as the new government looks good. Thailand actually has had nothing wrong with it besides politics.”
Jones Lang LaSalle is negotiating three transactions _ two Bangkok office buildings that two investment banks want to take over and a Phuket hotel that an institutional investor would like to buy.
All of the buyers are Hong Kong and Singaporean funds that feel now is a good time to take advantage of Thailand’s promising yield outlook.
At the same time, property owners have no problems with their assets and believe prices are right. Some want to liquidate.
Patima Jeerapaet, managing director of the property consultant Colliers International Thailand, said foreign investors want to take over hotels in Bangkok, Phuket and Pattaya.
The Pattaya tourism market is very strong now, with occupancy of up to 95% at some high-end hotels. Property sales in Pattaya are growing dramatically, better than in Bangkok.
Mr Patima said South Korean, Chinese, Australian, Indian and Middle East tourists were fuelling the boom, some of them equalling the numbers of more traditional tourists such Japanese, Germans, British, Taiwanese, Americans and Singaporeans.
Topping the list are Indians, Chinese and Middle East residents, especially during the low season.
Medical tourism is a focus, as more than 60% of visitors coming for treatment are from the Middle East.
“Buyers from the Middle East, India, Russia and China are looking at Thailand. Some Chinese investors have bought a block of condos on Ratchadaphisek Road, while Russians are eyeing Pattaya and Phuket,” said Mr Patima.
Colliers’ research shows the number of expats in Thailand excluding employees rose to 157,379 as of June 30 from 116,063 at the end of last year.
Weaknesses in the Thai property sector include insufficient financing for foreigners, domestic politics, limited leaseholds and ownership structures.
Mr Patima said the property committee, which he chairs, of the Joint Foreign Chambers of Commerce in Thailand was updating a white paper that proposes extending leaseholds from 30 years to 60.
It plans to submit the proposal to Commerce Minister Kittiratt Na-Ranong next month.