Real estate investment activity surges ahead



Real estate investment activity surges ahead

Thailand and the rest of most of Southeast Asia saw some massive gains in the real estate market in 2012 as many investment and property funds poured money into the burgeoning region.

In 2012, Thailand saw real estate investment reach two billion US dollars, which represented a whopping 81.8 percent increase on the 1.1 billion US dollars invested in 2011.

Major global property funds clearly consider Thailand and Southeast Asia as strong investment vehicles offering solid long-term profits, especially in the hotel and office sectors.

Last year, transactions by listed property funds and public funds allocated for public offerings represented 55 percent of total investment in Thailand and was the equivalent of 1.1 billion US dollars.

This was underpinned by the largest property fund listing in 2012 when the Tesco Lotus Retail Growth Freehold and Leasehold (TLGF) came on line. That listing alone represented the equivalent of 594 million US dollars and it acquired 17 Tesco Lotus hypermarkets across Thailand.

Looking more regionally, real estate investment across Southeast Asia rose 1.2 billion US dollars between 2011 and 2012, reaching a new peak of 26.7 billion US dollars in total. Much of this was down to residential investment, which amounted to almost 33 percent of the figure. Hotel investment also doubled, a reflection perhaps of the increasing mobility of the Chinese populace and their desire and ability to be able to travel more widely. Of course, the Indian middle class is also a major player in regional travel these days and so hotel investment is seen as a winning market.

Serviced apartments and residences are an increasingly popular investment choice as well for property funds. This was reflected in such purchases by the Quality Houses Hotel and Residence Freehold and Leasehold Property Fund (QHHR) which acquired three serviced residences for the equivalent of 107 million US dollars and the listed Land and Houses Freehold and Leasehold Property Fund (LHPF) which also bought three serviced residences for around 106 million US dollars last year.

Real estate investment trusts, or REIT’s, accounted for about 20 percent of Southeast Asian investment in 2012. This level is expected to continue throughout 2013.

The only flat area of the market has been in the office sector, although The Offices at Central World in Bangkok went for 161 million US dollars in 2012.

Even so, the overall office sector level of investment in Southeast Asia dropped to 15.5 percent of the regional total activity, dropping most notably in Thailand, Singapore and Malaysia.