UK property investors shift B2bn in funds to Vietnam
Thai business climate poor for expansion
KANANA KATHARANGSIPORN
Two British investors have shifted to Vietnam two billion baht in property investment planned for Thailand due to the uncertain market caused by political tension, the Foreign Business Act (FBA) and a serious decline in consumer confidence. ''The FBA does not directly affect our [existing] business in Thailand, as our properties are actually owned in a Type II property fund which allows full foreign ownership,'' said Joel Feldman, one of the two investors.
''The only other effect that the FBA is having on our business is our expansion. Earlier, we wanted to build and expand our company but we're now putting future expansion on hold including the taking on of additional staff.''
Feldman: Thailand trails Asian trend
Mr Feldman and his partner previously planned to spend two billion baht on new property development and the acquisition of an old condominium for refurbishment.
But early this year, after the FBA announcement, they instead decided to invest in a property fund established in Europe and managed by Citicorp. The 10-year fund, with 10 institutional investors, already invested about 10 billion baht in commercial properties in Vietnam.
In 2005, the pair invested in the Lizmans Property Fund with registered capital of 500 million baht. The fund is now managed by Akando Co Ltd of which Mr Feldman is the managing director.
The fund's holdings include 225 units in the Family Park Condominium in Soi Lat Phrao 48, 20 units in the PST condominium in Rama III and 120 units in a condominium in the Intamara area.
Last year, Akando renovated the Family Park Condominium and put the units on sale with guaranteed rental returns.
''We are continuing to achieve sales [of Family Park] but at a slower rate than before, with 90 units remaining after the sales launch in September last year because of the uncertainty in the market,'' he said.
Akando plans to launch sales of another two projects next year after the general election takes place and an elected government is formed.
''Thailand's property market this year will face a small decrease. This likely goes against the trend in the Asian region as a whole. Thailand seems to be the only country that is not enjoying the benefits of a strong growing property market,'' said the 40-year-old investor.
''Once an election has taken place and if the right measures are put in place by the new government to encourage internal and external investors then we may see ... substantial increases next year, as the Thai property market will have a lot of catching up to do with its neighbours.''
