Middle East buyers eyed for luxury Bangkok condominiums

THAILAND - The Middle East will be the new customer target for luxury residential projects in Bangkok as both Arabs and expatriates find Thailand attractive as a future beneficiary of the ASEAN Economic Community and as an economic powerhouse racking up growth of 4-5 per cent a year.

Asgar Patel, chairman of House of Patels Group, who has business in Dubai, said last week that he decided to buy a Bt480-million (S$21 million) condominium at Ritz-Carlton Residences on Sathorn Road because Thailand has investment potential, the best environment, friendly people and other charms.

"We invested in it to be our second home and are also interested in buying other projects developed by Pace Development Corporation, which developed Ritz-Carlton Residences, in the future, especially its projects in Hua Hin," he said.

Patel has properties in the US, India and Dubai. House of Patels is multinational group based in India with diverse interests in the fields of logistics, financial services and real estate.

"The investors from Middle East countries, who are not only Middle East people but also foreign investors with business in the Middle East, especially in Dubai, are interested in expanding their investment in Asia including Thailand," said Sorapoj Techakraisri, CEO of Pace Development Corporation Plc, which is developing the MahaNakhon mixed-use project worth Bt19 billion on Sathorn Road.

Following strong demand from the Middle East, the company held a roadshow here last weekend with over 120 investors attending who were interested in investing in luxury residences in Bangkok.

"When we decided to take a roadshow to Dubai, we advertised in Dubai's newspaper one week before the roadshow, which succeeded in selling three units worth totally Bt140 million. This shows the demand for luxury residences in Bangkok from Dubai's investors and the Middle East market is still strong," he said.

After the roadshow, the company targets sales of Bt300 million-Bt450 million from this event, which is part of its pre-sales target of Bt2 billion for this year from the Ritz-Carlton Residences project.

Ritz-Carlton Residences has succeeded in selling 50 per cent of its Bt12-billion value. The company now targets pre-sales of 65-70 per cent from the project this year, up from the previous target of 60 per cent. Over 60 per cent of its pre-sales was from foreign investors and the remaining 40 per cent from domestic demand.

The project is already under construction with completion set for the end of 2015.

MahaNakhon was launched in 2009 by a joint venture formed by Pace and Israel's Industrial Buildings Corporation. It will become the highest building in Bangkok at 314 metres and 77 floors.

However, the retail space at MahaNakhon called Cube will be completed and opened in September, followed in October by the first Vogue Club in Thailand. A budget of Bt30 million is being spent on the club with total space of 450sqm. The Cube, which has retail space of 6,000sqm, will boast the French luxury restaurant L'Atelier de Joel Robuchon. This first branch would open the next year.

Pace's business plan to list on the Stock Exchange of Thailand is already underway. It has applied to the Securities and Exchange Commission (SEC) to increase its registered capital from Bt1.45 million to Bt2 billion by floating 600 million shares to the public.

In its filing to the SEC on November 29, Pace reported a rise in sales of 67 per cent to Bt912.8 million in the first nine months of the year from the same period in 2011. It also turned a net profit of Bt84.8 million in the period, which was better than the net loss of Bt103.2 million in the same period of 2011.

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