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Thailand Investment MarketView Q2 2010

By on Sep 20, 2010 in Investment-Land, Research

Yields for income-producing property investments have remained flat for the second quarter of 2010, with no notable changes from the previous quarter.

The benchmark interest rate remained the same during Q2 2010 at 1.25% per annum, increasing by 25 bps in July 14th 2010. This level of interest rate has not affected property yields. Yields will remain unchanged until we see significant increase in bank deposit rates or government bond yields.

Developers continued to acquire sites for condominium developments. Noble Development Plc. has reportedly acquired the remaining 6.3 rai of Raimon Land Plc.’s Ploenchit site for a price of around 1.2 million Baht per square wah. This is a record price for this size of transaction.

With regard to major property transactions, the most notable investment transaction was the sale of Dusit Laguna Phuket by Laguna Resorts & Hotels Plc. to Dusit Thani Plc. in August 2010.

There were two office building transactions, Fenix Tower and Pacific Place I & II were sold. Fenix Tower was sold by ING to Rangsit University. The Pacific Place towers I & II were reportedly sold by the administrator of Lehman Brothers’s assets to Thai Property Plc.

Future Park Bangkhae was the largest retail space transaction in Thailand. It was sold by Thai Asset Management Corporation (TAMC) to Seacon Development.

In relation to property funds, the average dividend yield of property funds during Q2 2010 was 7.4%. The Thai Commercial Investment Fund (TCIF) was the only new property fund listed on the Stock Exchange of Thailand. There are plans to launch five new property funds in Q3 2010, with a total market capitalization of around 6.4 billion Baht. Most property funds traded on the Stock Exchange of Thailand are trading below their NAV (except CPNRF, TCIF, TLOGIS and FUTUREPF).

This is an extract from Thailand Investment MarketView Q2 2010, click to download the full report.

Toby has been living in Bangkok for a number of years and has a strong research background. With his years in Thailand Toby brings a wide range of property knowledge to his research writing

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