The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
AsianInvestor met last week with CBREÆs David Simister in Bangkok. CBRE has just opened an office on Koh Samui in the Gulf of Thailand, which will be managed by Ms Prakaipeth Meechoosarn.
Worries about a clampdown on foreign property ownership rules have led to a slowdown in Thai property transactions. Prices have not fallen, however according to CBRE, which construes that a base is being built from which Thai property prices will rise after a new democratically-elected government is in place.
Simister believes that because the junta has not introduced measures prejudicial to foreigners in its one year of incumbency, this signifies that a hard line will not ultimately be taken to foreign buyers. CBRE nevertheless continues to lobby for clarity to be shown towards foreigners seeking to buy property in Thailand.
When is a good time to buy Thai property? It is difficult to get a balanced answer to that question from an estate agent, because ænowÆ is always a good time in the estimation of estate agents, ideally within the next 20 minutes.
ôThereÆs a price differential between Phuket and Koh Samui,ö says Simister. ôWhat would cost you $10 million in Phuket would cost $3.5 million in Koh Samui. A few years ago you wouldnÆt have found any villa priced over $1 million on Koh Samui.ö
CBRE is launching a project named W Residences, which will be managed by luxury hotel operator W Hotels. Those villas will be priced at between $3 million to $ 6 million, on a par with the Trisara development in Phuket.
The properties may be idyllic, but as with Bangkok, with what are you confronted when you step outside of your manicured villa compound?
ôYes the infrastructure does have a way to go,ö says Simister. ôGradual improvements are being made. But those infrastructure flaws are one of ThailandÆs charms.ö
Charming infrastructure flaws? Controversial. If you pass on the islands, where else can you look? CBRE thinks that Pattaya could be the next up and coming venue. But is Pattaya yet a place for the well-heeled? By day it looks like a post-apocalyptic Mad Max hellhole. What if PattayaÆs nightlife were to be closed down?
ôIf that happened,ö says Simister, ôhouse prices would go up in Pattaya. There is a world of difference between the kind of person who buys a house in Pattaya for Bt5 million ($157, 480) and one who buys for Bt10 million to Bt15 million.ö
On the assumption that investment bankers and hedge fund managers invariably abhor moral turpitude, you have to conclude his Pattaya analysis is correct.
CBRE is in many ways ThailandÆs most prestigious estate agency. One can hope it will bring a degree of decorum down to Koh Samui. Some people though, such as John Harris, feel nevertheless that incomers must possess a sense of realism and clarity with regard to real estate there.
Living the island life: A Q& A with John Harris, an ex-resident of Koh Samui
Briton John Harris is a former resident of Koh Samui. He bought land there with a view to building a property. He eventually became disillusioned with Koh Samui, did not build there and now resides in the Thai town of Hua Hin.
After your experience in Koh Samui what are your thoughts about real estate there?
John Harris: I think Koh Samui is a big gamble. After 2 years now based in Hua Hin, I can confidently say we made the right decision.
You do not need a James Bond-style house to live comfortably in Koh Samui. In fact for a relaxing existence there you should downsize as much as possible. A lot of those million-dollar homes are standing around unlived in and unsold. All these gated communities seem to be devoid of inhabitants apart from the maids and swimming pool maintenance crews, who seem to be living a life of Riley.
If all these high-end homes get built, the renter will have such a large choice that prices may not be maintained and a house standing empty soon deteriorates in the climate there. That means lots of maintenance.
How is the infrastructure on the island?
The infrastructure is not yet up to scratch and there is little to do on Samui except sit on your veranda by your infinity pool and in your Balinese-fusion-style sala and count your money, or watch it disappear.
I bought some land there several years ago with a view to building, but I left the island recently, IÆd had enough of the high prices, increasing noise and traffic, poor service, dirty water, power cuts and the greedy take-it or leave-it attitude of all who do business there.
What is your opinion of the average Koh Samui estate agent?
Hundreds of land agents have descended on the place, promising the earth in the way of rental returns and a luxurious palm tree-framed dream lifestyle. Take it with a pinch of salt.
How about the Koh Samui prices?
$1 million is a lot of money to 95% of the worldÆs population, all of whom live in the real world. To buy a $1 million home on a $9.99 island is pure folly.
Only low-rent flash ômillionairesö would buy into something as cheesy and trashy as this. Real money will stay away. It is all about envy and showing off but what appears to be a paradise at first can soon turn into a prison. We were going stir crazy there! Koh Samui is still a dime store /charity shop/Woolworths compared to the Bahamas, Hawaii, Florida, or the Mediterranean.
Buy your luxury home on the mainland in Bangkok or in Hua Hin or Phuket. You could even have a simple cheap low-maintenance holiday home of 150 square meters on a hillside there. You could do it for Bt3 or 4 million, including the land, and leave the luxury estates to the posers with more money than sense.
Is developing property on Koh Samui a good idea?
As a developer, itÆs in your interests to promote that kind of lifestyle, but realistically speaking, that lifestyle is more suited to the Caribbean , the French Riviera or Florida, where the infrastructure will give the heavy hitters what they require in the way of shops, restaurants, hospitals and infrastructure and the kind of service that the rich take for granted. Koh Samui is way behind on those fronts. Go and live there for six months before spending a large amount on building a home.
Sunsuper and QSuper appoints CIO for combined entity; State Street appoints heads of HK and Taiwan; Nothern Trust rebuilds Apac team; Manulife IM names emerging markets fixed income CIO; RBC Wealth Management hires four into HK; Lombard Odier hires two senior equity managers; Allianz Global Investors appoints Asia hand as equity CIO; and more.
Investors from China and the US are expected to continue buying assets in each other’s markets despite the blacklist of Chinese firms with military and surveillance ties.
Stronger government actions are needed to meet the Paris Agreement goal of limiting global temperature rise to 1.5 degrees, investors such as Hesta and CDPQ signed in a statement.
AsianInvestor explains why we chose the winners of the second half of our 2021 fund manager winners, by major local markets.