Income-producing properties are still in demand in Thailand as seen from major hotel and land purchases in the second quarter, says the property consultancy firm CB Richard Ellis (CBRE).
The Sofitel Silom hotel was sold to an associate of The Pioneer Global Group. The same associate, with a 49.5% stake in the Pullman Pattaya Aisawan Resort, purchased the 469-room hotel for 2.01 billion baht, or 4.3 million baht per key.
Eilidh Callum, senior economist of CBRE Thailand, said in addition to income-producing assets, strategically located sites are also in demand. So far this year, City Virtue Limited purchased a three-rai site on Sathorn Road from the French Government while developers L.P.N. and Supalai have both purchased land for residential developments.
A new entrant, Boon Rawd Brewery Co – the company behind Singha – purchased the nine-rai former Japanese Embassy site on New Phetchaburi Road for 2 billion baht, which it intends to develop into a mixed use development.
Commercial real estate sales in Asia-Pacific totalled US$9 billion in the second quarter, a decline of 39% from the first quarter as investors in Asia turned more cautious following the March 11 earthquake and tsunami in Japan and the worsening economic picture in the United States and euro zone.
Whilst transaction volume in Asia fell by 52% quarter-on-quarter, the Pacific markets picked up strongly by 228%, albeit from a low base following a slow start to the year.
The state of uncertainty in the global economy encouraged investors to drift towards conservative plays with the period witnessing a renewed focus on core quality buildings in established markets. Australia registered the greatest transaction volume across the region in the second quarter, accounting for 24% of total investment in Asia-Pacific.
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