Thai developer Sansiri eyes 40% growth in property sales to foreigners - Hua Hin Property Listing

Thai developer Sansiri eyes 40% growth in property sales to foreigners

April 14, 2016

TOKYO — Sansiri, one of Thailand’s biggest developers, expects 40% growth in domestic real estate sales to foreigners this year as efforts to woo Japanese and Chinese investors to the Southeast Asian country’s property market continue to pay off.

The Bangkok-listed company expects to sell $143 million in Thai real estate to overseas buyers this year, up 43% over 2015, Senior Executive Vice President Uthai Uthaisangsuk told The Nikkei here Tuesday.

With the Bank of Japan adopting negative interest rates, Japanese investors are searching for high-yield investment options, Uthai said in an interview, adding that a rising yen and a weak baht help make Thai real estate an attractive asset.

Sansiri is partnering with Japanese real estate agency Century 21 Fuji Housing to sell apartments in a seven-story, 262-unit building under construction in Bangkok. The low-rise development, named Mori HAUS, stands near On Nut station in the Sukhumvit district, home to many Japanese expatriates.

The apartments will range from about 35 sq. meters to 118 sq. meters and are expected to sell for 18.7 million yen to 44.1 million yen ($172,000 to $406,000). Sansiri’s nearby residential developments have occupancy rates of around 90% and expected rental yields of 5-8% a year. Their property values have risen 30-50% in the past five years.

In Thailand, foreigners can own up to 49% of an apartment building’s floor space.

With the Thai economy slowing and domestic demand for real estate softening, Sansiri has for years been making a serious effort to bring in foreign investors. Its sales to foreigners surged 140% to $100 million last year, with Asian buyers accounting for more than 80% of the total. Hong Kong investors made up 45%, Singaporeans 25% and mainland Chinese 20%.

To take advantage of the Chinese demand, Sansiri has found real estate agency partners in Beijing, Shanghai, Shenzhen and Guangzhou and stationed sales and marketing teams in those cities. As property investment returns in China fall, Chinese appetite for investing in foreign real estate remains strong, according to Uthai.

On the development side, Sansiri has allied with BTS Group Holdings, the operator of Bangkok’s Skytrain rapid transit system. Plans call for constructing 25 apartment buildings worth a total of $2.9 billion along the railroad by 2019. Sansiri also has projects in the works alongside the Purple Line and other new rail lines extending out of the Thai capital, Uthai said.

MANABU ITO, Nikkei staff writer