Best real estate in Thailand

Global Direct Real Estate Investment Reached a Record US$290 billion in First Half of 2006 Asia Pacific’s investment value of US$43 billion is a 40% increase over the same period last year Bangkok, September 28, 2006 - Jones Lang LaSalle’s latest global real estate capital report – “Record Volumes, Record Globalisation”, recorded global direct real estate investment of US$290 billion in the first half of 2006, up 30% on the same period in 2005. Of this total, Asia Pacific accounted for approximately 15% at US$43 billion, which is a 40% increase over the same period in 2005.

Guy Hollis, International Director in Jones Lang LaSalle’s International Capital Group says, “Real estate markets are continuing their strong evolution into a global asset class, with cross border investment now representing 44% of total volumes, compared to 34% for the first half of last year. The real proof of this globalisation is that inter-regional investment, meaning transactions involving either purchaser or vendor from outside the region where the asset is located, now represent 31% of total volume (US$89 billion), up from 24% a year ago. In relative terms, the globalisation of real estate investment has had the greatest impact on developing markets.

In Central Europe and some Asian and Latin American markets, inter-regional investors are purchasing the majority of avail able prime quality stock.”

“Across the world, fund managers are receiving record fund inflows as populations in developed countries approach retirement age. Many of these funds are attracted by real estate’s strongest able returns and we are witnessing a significant re-weighting of investment portfolios in favour of real estate assets. With this in mind, we believe that 2006 is on target to be another record year for commercial direct real estate investment as we expect total transactions to reach US$600 billion this year,” adds Mr Hollis. Longlom Bunnag, Chairman of Jones Lang LaSalle in Thailand , who is also the firm’s Head of Investments, comments: “In line with the regional perspective, the real estate investment market in Thailand has been very active this year. A number of major direct investment transactions have been recorded, particularly in the office sector.”

Mr Hollis notes, “Japan and China were the stand-out performers in Asia Pacific. Japan had a particularly impressive half year with transaction activity almost reaching full-year 2005 levels. Both local and cross-border investors have returned strongly to the market, buoyed by sustained economic growth, low interest rates and an end to property price deflation. As for China, transactions were double those recorded in H1 2005.”

“The improved real estate market transparency in Asia Pacific as noted in our 2006 Global Transparency Index bodes well for investment growth in the region, particularly in Australia, New Zealand, Hong Kong, Singapore, Japan and India. Cross-border investors are focusing on this region to grow their portfolio of assets and we expect interest and activity levels to intensify for the rest of 2006. It is worthwhile to note that the hunt for positive yield is pushing investors to ever-distant frontiers and in Asia, investors are now targeting second and third tier cities in China, Vietnam and other fast-developing markets.

The Indian real estate market has also attracted a high level of interest from foreign private equity and venture capital funds, following the relaxation of foreign investment regulations. Many are showing interest although few deals are yet to be announced,” concludes Mr Hollis.

This article was first published in Business Day October 28th 2006