Firms jumping at chance to invest overseas

Thai property firms are jumping at the opportunity of expanding overseas now that the price of land and property projects in other countries are dropping, a survey by The Nation learned last week.

Earlier this year, TCC Land - a property firm owned by beverage tycoon Charoen Sirivadhanabhakdi - cashed in by purchasing the Novotel Rockford Darling Harbour Hotel from Adelaide's Rockford Indigo Hotel Group for A$76 million (Bt1.6 billion).

Sources close to the deal said before the financial recession hit the world, the hotel was priced at nearly A$150 million, but after the recession hit Australia, TCC Land succeeded in getting the property at half price.

Meanwhile, Central Pattana has started negotiating a lease in China with the view of building its first shopping complex overseas, now that leasing prices have dropped by 30 per cent when compared to a couple of years ago.

"We are renegotiating with our landlord in China, who is now offering the lease at 30 per cent less than what was offered last year. There is high potential for the negotiations to be concluded at a good price," said Naris Cheryklin, Central Pattana's senior executive vice president for finance and accounting, property, sales and marketing. "Global economic difficulties have given Central Pattana a great opportunity to find a good location at a good price."

Central Pattana had tried to lease land in the mainland last year, but the deal fell through because they could not agree on a price because at that time China's property market was booming.

Preuksa Real Estate is also rethinking its plans to invest in Vietnam, now that land prices have started dropping thanks to the worldwide financial woes, chief executive Thongma Vijitphongphun said. Preuksa is planning to start studying residential developments in Ho Chi Minh City and has set aside Bt300 million in case it decides to go ahead, he said.

"We initially suspended our investment plans in Vietnam mid this year, because the property market was booming and that drove land prices up aggressively," he said.

However, the Vietnamese economy has slowed down significantly and land prices have either steadied or dropped, so now is the perfect time to look for business opportunities, Thongma said.

The firm is also focusing on a joint venture in Bangalore, India.

Meanwhile, Singapore construction firm and property developer Tee Group is also planning to invest in Vietnam's property sector next year. Tee's country manager, Boon Choon Kiat, said the group was thinking about the expansion of its investments in Vietnam, because the country's economy had slowed down significantly because of the global economic crisis.

"This is a good time to invest in Vietnam," he said.