subject: Market View - Thailand Investment [print this page] 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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