Two months of increasingly chaotic protests in Hong Kong are driving investment money out of the city and into Thailand’s ultra-luxury condominiums, according to one of the biggest developers in the Southeast Asian country.
Some 40% of the condos in a 52-story Bangkok tower that opened last week have already been sold to buyers from mainland China, Hong Kong, Taiwan and Singapore, according to Keerin Chutumstid, an executive at Bangkok-based Magnolia Quality Development Corp., which owns a quarter of the property. Investors from China and Hong Kong have been the top foreign customers, he said.
“The protests give us an advantage for this project,” Keerin said. “If you look at Thailand right now, compared to other countries, we have a good level of political stability.”
In Hong Kong, where pro-democracy demonstrators have filled the streets since June, development and high-end investment are on hold. Last week, CK Asset Holdings Ltd. and Sun Hung Kai Properties Ltd. decided to postpone sales of new multi-billion-dollar projects, and transactions in the secondary market are down sharply, especially for luxury homes.
Those circumstance may add another tailwind to the luxury market in Bangkok, where a tourism boom has put the city on the map for investors, especially mainland Chinese who have come in droves. Bangkok in 2016 surpassed London to become the world’s most-visited city.
Bangkok real estate has also been attractive to international investors because, even after years of gains, prices are still often cheaper than in less traveled-to cities such as Jakarta, Kuala Lumpur, or Vietnam’s Ho Chi Minh City.
The new tower on the Chao Phraya River has 146 units, which are managed by 5-star hotelier Mandarin Oriental Hotel Group. Prices start at 65 million baht ($2.1 million) and go up to 533 million baht for the largest penthouses.
Siam Piwat Group owns half of the 11 billion baht development, with the rest split between the CP Group and Magnolia, both of which are owned by members of the billionaire Chearavanont family. The new residential tower is next to a 54 billion baht luxury mega-mall, called the Iconsiam, opened by the investors last year.
“Compared to Hong Kong, we’re still much cheaper,’’ Keerin said. “Foreigners come here and they can see that what we have to offer is nothing less than what you’d find in New York, Hong Kong or Singapore.”
©2019 Bloomberg L.P.