Seminar tells investors to research markets
Asean property sectors offer
attractive investment opportunities, but consultants and developers warn that
new players must study each market carefully before taking the plunge.
"Vietnam faces banking and
financial problems. The interest rate is quite high at 18%, while inflation is
20%. Property is a speculation market," James Pitchon, executive director
of the property consultant CB Richard Ellis (Thailand).
He was speaking at a seminar on
Asean property markets under the upcoming AEC hosted yesterday by the Real
Estate Information Center.
"The condominium and office
sectors are in oversupply, while there are barriers to entering the property
market. Most land in Vietnam is owned by the state. If it does not release it,
then it can be quite difficult to invest in the property sector there,"
said Mr Pichon.
Prasert Taedullayasatit, chief
business officer of the SET-listed Pruksa Real Estate Plc, agreed, saying his
company invested in Haiphong on the northern coast three years ago, but
development could begin only this year.
"Currency and property
prices in Vietnam are so volatile. When we entered three years ago, one baht
equalled 500 dong, but today it's about 675 dong due to soaring
inflation," he said.
Mr Prasert suggests property
investors looking at Vietnam get in and out as quickly as possible, as property
is a more difficult sector to exit than trading.
Tony Picon, research director of
the property consultancy Colliers International Thailand, said Myanmar may look
like an attractive investment, but government policy remains unpredictable amid
the changing political situation.
Enforcement of laws and
regulations is not very good, while the infrastructure is poor, he said.
As well, the Myanmar banking
sector is considered so unreliable by local residents that they hold onto their
cash instead or buy property or cars, said Mr Picon.
Suphin Mechuchep, managing
director of the property consultant Jones Lang LaSalle (Thailand), said the
office sector in Manila is fast-growing, driven by outsourced service centres
and call centres.
The vacancy rate in the city's
business districts is a very low 4.3%.
Investment yield in the country
is 6.6% but only 3-4% in Bangkok.
However, the Philippines is
hobbled by a lack of a good mass transit system, said Ms Suphin.
She said Jakarta is the most
attract Asean destination for investment due to robust growth in its retail,
condominium and office sector.
Return on investment for
condominiums is 6-8%, while the sector is driven by real buyers, not
speculators.
Porameth Chantanakomes, country
head of the property consultant DTZ Debenham Tie Leung (Thailand), told the
seminar that the Malaysian property market still remains an attractive
investment.
The government plans to push for
major economic growth by 2020 and to achieve this, foreign investment is needed
in many sectors, he said.
Mr Porameth said Singapore still
has room for property investment, but property prices are very high.
Hotels are the most interesting
sector, as they require less land than retail centres, he said.
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