Land and residential prices in Asean countries have been rising as investors from China expand their purchase of property in the region.

For example, the price of land in Cambodia has been increasing by up to 20 per cent a year since 2017, with residential and commercial prices in the country boosted by over 10 per cent a year from 2017 until now, Jirawuth Suwannaarj, the director and minister counsellor (commercial) of Cambodia’s International Trade Promotion Department of the Commerce Ministry, said in a recent interview with The Nation.

He added that investors from China made property and construction sector investments in Cambodia worth US$315 million (Bt9.7 billion) in the first four months of this year. Some 226 China-based construction firms had registered by April 30, 2019 to do business in Cambodia, followed by Vietnam with 26 registered companies and Thailand with 14.

“The Property market in Cambodia still has strong growth with Chinese investors expanding their investments in that country,” noted Jirawuth. His department is negotiating with China’s commerce representative in Cambodia to find opportunities for Thai firms to link with Chinese firms to expand their investment in the property and construction sector there.

In Thailand, the number of Chinese buyers of condominiums jumped dramatically over the last two years, with some developers reporting that up to 50 per cent of their condominium sales were to foreigners, mainly Chinese purchasers. Developers are now reporting that they have sold out the 49 per cent foreign quota in some condominium buildings, a situation that has rarely happened in the past, according to the latest research by CBRE property agency firm.

“China will continue to be a growing source of demand for Thai propฌerty, but that demand may be volatile and fluctuate based on sentiment and vary from sector to sector. Chinese direct investment in property development through joint ventures is also likely to increase,” said James Pitchon, the head of research and consulting for CBRE Thailand.

Globally, China has been a major driver of investment flows into real estate. CBRE Research data shows that Chinese outbound investment in real estate rose from US$8 billion (Bt250 billion) in 2013 to just under $35 billion (Bt1.09 trillion) in 2017.

China still accounts for the largest source of foreign capital for real estate markets in the Asia Pacific Region, and the slowdown in capital deployment is likely to be the start of a new chapter rather than the end of the story of Chinese investment in overseas real estate. According to LPN Development Plc’s chief executive officer and managing director, Opas Sripayak, the demand for condominiums among investors from China have boosted condominium price increased by over 10 per cent between 2017 and now.

The investment has also boosted land prices in central business districts by between 5 and 10 per cent per year, Opas said.

“Demand from Chinese customers changed the business model of the property sector in the country from 2017 until now. It has also had an affect on residential prices in some locations, which are now higher than the purchasing power of domestic customers. [Local people] cannot buy residential in the central business district when the price is above what they are able to pay,” he said.

Prasert Taedullayasatit, honorary chairman of the Thai Condominium Association, said the 2018 property market recorded a total sales value worth Bt512.17 billion, up 18 per cent from 2017, for all 121,193 units combined. That Bt512.17 billion included Bt293.72 billion from condominium projects, up 19 per cent from 2017 and spread over 70,066 units. Next was Bt122.58 billion from single detached houses, up 22 per cent from 2017, spread over 18,601 units. The remaining Bt87.57 billion from townhouses was up 13 per cent over 30,914 units.

“Most condominium projects sold last year included sales of up to 20 per cent to Chinese investors, which includes both the individual investors and the brokers and agencies who bought more condominium units than they could sell to individual investors on the China mainland,” Prasert, who is also CEO of premium products for Pruksa Real Estate Plc, said.

Following strong demand for condominium projects in the past year, which set national records for both sales value and the number of units, there is now a boost to land and residential prices as they rise up to 10 per cent a year to meet the continuing strong demand from Chinese buyers, he said.

Myanmar’s property market is also experiencing a boom from expanding foreign direct investment, especially from Chinabased investors, according to Colliers International reports.

The Myanmar Investment Committee (MIC) permitted 109 foreign investments as of February in the present fiscal year 2018-2019 (which began in October last year), according to the Directorate of Investment and Company Administration (DICA).

US$1.2 billion in FDI flowed into the country’s real estate sector in the fiscal year 20172018, trailing only the $1.7 billion that went into manufacturing in the same period, according to a DICA report. Singapore and China were the largest investors in Myanmar, pumping $2.1 billion and $1.3 billion, respectively, or more than 60 per cent of approved FDI, reported Colliers.

The strong investment in Myanmar’s property sector also boosted the rise in the country’s land and residential prices, the property agency said. Vietnam’s foreign direct investment (FDI) in the first four months of this year recorded over $7.4 billion, witnessing a year-on-year rise of 28.6 per cent, according to recent reports from the country’s Foreign Investment Agency. Of the fresh FDI of more than $5.3 billion, 74.1 per cent was poured into the processing and manufacturing sector, 9.9 per cent into the real estate trading sector, and 16 per cent into others.

China was the biggest investor among the 51 countries to expand their investment in Vietnam. Investments from China reached above $1.3 billion and accounted for 24.6 per cent of the total registered capital, followed by Singapore with US$699.7 million, noted the agency under the Ministry of Planning and Investment said, adding that Vietnam licensed 187 Chineseinvested projects in the period.

According to the latest research survey by Knight Frank, the direct investment in the property sector in Asia Pacific reached $90 billion worth of capital and beat Europe ($83 billion) and North America ($80.9 billion) as the largest source of cross-border real estate capital in 2017.

The report also noted a rise in cross-border real estate capital from other Asian countries including Hong Kong, which increased capital by 41 per cent to $20.5 billion. Meanwhile, Singapore’s crossborder capital climbed 35 per cent to $19.9 billion in 2017. South Korea ($8.6 billion), Japan ($3.1 billion), Australia ($1.7 billion), Taiwan ($1.7 billion), Thailand ($1.1 billion), Malaysia ($500 million) and India ($300 million) also contributed to making the Asia Pacific nations the largest source of cross-border real estate capital.

“The increase of cross-border capital emanating from the Asia Pacific region demonstrates the growing confidence and comfort of many different types of investors in this region [who are] sourcing and executing on opportunities outside their home jurisdictions,” Knight Frank Asia Pacific research head Nicholas Holt said.

Apartments range from 26 to 51 square metres with prices starting at Bt2.2 million. The developer said they were ideal for students and property investors.

Chaiwat Jaktae, managing director of Creators HQ Co, Ltd, said: “Common TU is our first foray into the new premium high-rise condominium segment in the Rangsit area following the success of our ‘Conner Ratchthewi’ project which sold 75 per cent of its homes within three months. This time, the Creators HQ chose the golden location of Rangsit as our ‘beachhead’ in outer Bangkok as it is an attractive location for investors. The location is excellent in terms of ease of travel to the country’s northern, northeastern, and eastern regions, including close proximity to leading universities as well as major department stores and numerous industrial estates.”

May’s recorded new project launches were worth Bt41.27 billion it total, for a combined 5,662 units.

Up to Bt25.19 billion of those launches were for condominium projects, followed by single detached house projects worth Bt9.26 billion and then townhouses worth Bt3.11 billion, the survey found.

The first innovation, Katsan, is a 24/7 intelligent personal guardian. Homewiser, the second introduction, is a personal home adviser based on the concept of preventative maintenance, while the third, YourNextU, is a learning innovation that follows what AP calls its “learning buffet model”. The firm says it aims to create a new standard for society through products that have emerged from its investment in independent businesses seeking innovative solutions using teams of professionals under Claymore and SEAC.

These innovations were created and developed using “Stanford design thinking” to meet a number of unmet needs. They will be used in pilot efforts to lift up the life quality of AP customers, while the company welcomes opportunities for the general public to benefit from the innovations.

AP Thailand diversified into other businesses to go beyond property development, as they sought solutions that enhance the quality of life under the flag of “AP World: A vision for quality of life”, explained Vittakarn Chandavimol, chief of corporate strategy and creation at AP (Thailand) Group.

“Today is a good starting point for AP Thailand Group to deliver on the promise to create good quality of life for society with our newest three service innovations that are the products of Thai innovators. They are Katsan, Homewiser and YourNextU and they answer our needs for tomorrow’s security, preventive maintenance and education for people’s development. These innovations reinforce the main mission to build a new living standard.”

The innovations were created by Claymore and SEAC, composed of teams of Thai specialists who work independently from AP using “Stanford design thinking” as their main tool to develop innovations to meet unmet needs. Claymore developed two Katsan and Homewiser home security and preventive maintenance service innovations. For its part, SEAC was tasked with developing knowledge and the quality of people in an organisation and society at large by creating a learning innovation. The result, YourNextU, is a learning innovation and ecosystem distinguished by its “learning buffet model”, which allows for unlimited learning with more than 300 courses – online and offline – to develop people’s potential and all-around capabilities.

“We will have pilot use of the three service innovations to improve the quality of life of AP customers, and will offer them for the general public – not limited to just customers living in AP’s residential projects – so as to be in line with our intent to improve the quality of life of everyone in society,” said Vittakarn. Katsan is the only quality of life design innovation that serves to bring security management in a residential project to a new dimension, he added, while Homewiser is a quality of life design innovation that offers peace of mind for home maintenance in a new dimension.

Nipatra Tangpojthavepol, executive director of SEAC, the first and only lifelong learning centre in Asean, said, “SEAC wants to play a part in building a lifelong learning society where everyone can learn and develop themselves anywhere at any time. Today, digital disruption is making people’s knowledge and skills quickly become out of date and irrelevant. Many have started to recognise the importance of reskilling to keep abreast with the changing world.

“Hence, we intended to create and design a learning innovation and ecosystem to help reskilling and respond to changes in the world, lifestyles and learning styles of everyone regardless of gender and age as we look to continue the mission to deliver good quality of life for everyone in society.” YourNextU is the world’s first design innovation to disrupt education. Distinguished as a world-class education service, the Learning Buffet Model ensures learners can learn endlessly and repeatedly with no limits to classes and through more than 300 world-class programmes offering a mix of learning approaches.

The new offerings are Katsan, an intelligent personal guardian 24/7, Homewiser, a personal home adviser with a preventive maintenance concept, and YourNextU, a learning innovation that follows what AP calls the “Learning Buffet Model”.

The company aims to create a new standard for society through products of its investment in independent businesses that are managed by teams of professionals under Claymore and SEAC.

These innovations were created and developed using “Stanford Design Thinking” to meet a number of unmet needs, AP chief for corporate strategy and creation Vittakarn Chandavimol said.

They will be used in pilot efforts to lift up the life quality of AP customers, and the company is open for the general public to benefit from the innovations, he added.

“I was born in and have stayed at Soi Suan Phlu for 48 years, I have seen many changes to this location since 2009, with more condominiums around the area,” Wipa, who remains a resident of the soi, said.

The lifestyle in this location has also changed as condominiums replaced the previously dominant shophouses. As well, the businesses have shifted to a more modern trade to replace the traditional trades.

“My friend had sold her land at the price of Bt450,000 per square wah,” she said, “and now the price for her [former] land has increased to over Bt2 million per square wah.”

With the market trend, listed and non-listed property firms are parading to launch their new condominium projects in Sathorn district, the central business district of Bangkok. Launches totalling more than Bt31 billion have been made from mid-2018 through the first half of this year, according to the recent Nation survey.

Supalai Icon Sathorn, worth Bt20 billion, is the latest project launched to market by Supalai Plc. It is priced at Bt175,000 per square metre with a starting price of Bt8.2 million per unit.

Supalai Plc’s chief executive officer Prateep Tangmatitham said the mixed-use project would feature residential along with offices, shops and complete facilities on a 12,600sqm plot, 56 floors high. The combined total of 780 residential will offer a functional area of approximately 150,000sqm.

“We decided to launch this project when we saw a strong demand in this location,” he said.

Meanwhile, other property firms are also launching their condo projects on Sathorn Road from Sathorn junction to BTS Sathorn station.

For example, in the middle of last year Pruksa Real Estate Plc introduced the Reserve Sathorn worth Bt2.59 billion – and it has already sold out. The project offered a Bt280,000 per sqm starting price, or Bt13 million per unit. The project will be completed and transferred to customers in 2022.

Sathaporn Estate Co Ltd last September introduced its Bt1.3-billion Shade Sathorn condominium project at a Bt135,000 per sqm price, or Bt3.69 million per unit. The project is to be completed and transferred to its customers in 2021 or 2022.

The latest condo project is the Bt3.4-billion Anil Sathorn by Grand Unity Development Co Ltd. It goes for Bt260,000 per sqm, or a starting price of Bt11 million per unit.

From 2003 through 2018, a total of 8,002 condominium unites, worth over Bt40 billion, were launched for sale on Sathorn Road. Up to 95 per cent were successfully sold, according to research by property agency Colliers International Thailand Co Ltd.

Their research also found an average condominium price on Sathorn was at Bt250,000 per sqm.

Most property firms that launched sales for over Bt40 billion worth of condos on Sathorn Road in 2018 through the first half of this year have successfully sold out, Colliers local research director Pattarachai Taweewong said.

For example, Reserve Sathorn launched mid-year and has managed to already sell out. Reflecting the demand, condominium prices also increased from the pre-booking Bt280,000 per sqm to Bt300,000.

Sansiri Plc in 2017 launched the Line Sathorn worth Bt4 billion. The project combines 327 units at Bt270,000 per sqm and a starting price of Bt7.9 million. The project sold out within a day of opening up to booking. Those units now enjoy an average resale price of Bt285,000 per sqm.

Raimon Land Plc last October introduced its Bt4.2 billion Tait 12 project on Sathorn Soi 12. At Bt264,000 per sqm, it offers a starting price Bt7.6 million per unit, and reached sales of 70 per cent for the sales launched.

Sathorn Road is a prime location for residential, says Pruksa Real Estate Plc’s chief executive director of premium units. Prasert Taedullayasatit pointed to the locations many lifestyle-oriented facilities, including a hospital, university, primary school, secondary school and shopping centre.

The location also boasts both MRT and BTS transit lines, giving an added boost to demand for residential projects in the area. Meanwhile, the area’s limited availability of land for building residential drives up the price of land there, he said.

For 2018, land price around Sathorn Road were recorded at an average Bt2 million per square wah. Already, the price has jumped 10 per cent, while demand for residential in the location enjoys continuing strong growth, he said.

The Bt3-billion project is located on a 99 rai plot, according to a company statement.