Market View - Thailand Investment

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 Brotherss 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).

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by: Andrew Collins

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