Thailand is seeing an uptick in its tourism sector, with December 2022 welcoming 2.24 million foreign tourists. This was a significant increase from July 2022, when only 1.17 million tourists arrived. The Tourism Authority of Thailand (TAT) predicts that January 2023 will see foreign tourist arrivals exceed 2 million. This has attracted foreign investors to invest more in the supply-side business in Thailand, particularly in Bangkok, Phuket, and Chiang Mai as Thailand’s market continues its expected recovery over 2023.
The Thanasiri Group, a mid-sized Thai real estate developer, is set to launch four new projects worth 3.3 billion baht in 2023, aiming to generate 1.8 billion baht in presales. Over a third of the total amount is expected to come from joint ventures with Japanese partners. The company’s chairman, Boonchai Thanasiri, said that the company’s focus would be on high-rise condominiums, low-rise housing, and townhouses. The projects are expected to be launched in the second quarter of 2023.
The economic outlook for Thailand in 2023 is looking positive. The finance ministry maintains the country’s GDP growth outlook for the year at 3.8%, and Thailand’s real estate market is growing, with strong demand in the low-rise housing sector. Thai developers are taking advantage of the growing market. AP Thailand, for example, aims for B57.5bn in revenue with 58 ambitious projects in 2023, while two major developers, Noble & Supalai, are making significant investments in Thai real estate as they bet on market resurgence in 2023.
Meanwhile, Chiang Mai, in particular, has seen a rising influx of Chinese investors. Five patterns of Chinese investment in the province are hotel and accommodation, restaurant, tour agency, logistics and transportation, and property-related businesses.
Chinese investment in hotel and accommodation in Chiang Mai has been increasing rapidly, with a Chinese business typically comprising 5-6 investors, with an estimated fund of around 240 million baht to take-over small-scale boutique hotels from local owners.
Following the high demand for direct flights from Chinese cities to Chiang Mai, the province has become a ‘second home’ to more and more Chinese descendants. It is also one of the reasons why Chinese investment in Chiang Mai is related to restaurants and logistics businesses. This comes as moving to Thailand has become increasingly in vogue among Chinese netizens.
Thai-Chinese law firms operate in Chiang Mai and Bangkok to help Chinese investors set up companies to invest in Thailand, along with financial advisors from Chinese institutions to grant credit approval. These firms are operated by Thai-Chinese citizens who can communicate in Thai.
The vibrant areas for restaurant and logistics businesses in Chiang Mai are San Kamphaeng and Hang Dong districts, as they have been known as the best locations for golf driving ranges, sports complexes, international schools, and housing development projects among foreigners. Recently, a so-called ‘Chinese Community’ has set up there, expected to attract more Chinese entrepreneurs to the area in the future.
In Bangkok, the Huai Khwang District is becoming a new Chinatown. A decade ago, Chinese investors started doing business around Huai Khwang District in Bangkok. However, the business faced vulnerability from the outbreak of COVID-19, and until the governments of Thailand and China ordered the policy change, the business was getting back on track. Wealthy Russians have also been flocking to Thailand to escape the war in Ukraine. Property sales have skyrocketed, with Phuket Island becoming the destination of choice for many.
Now, the Chinese investors reside in Huai Khwang are the new settlers, unlike Thai-Chinese descents in Yaowaraj, the Old China Town of Bangkok. Most of them are from Mainland China or Chinese diaspora from the United States, Canada, and Taiwan.
These Chinese investors are interested in doing business in Thailand and are not fluent in Thai. More than 70% of their customers in Huai Khwang are Thai, especially in the restaurant business. However, the investors prioritize Thai customers over visitors. They’ve done market research to understand the Thai customers’ preferred flavor profiles and hired social media influencers to review their restaurants.
The Bangkok Metropolitan Council member, Praprut Hankitchakul, sees the positive side of Chinese investment in Huai Khwang. He believes that the investors’ spending on real estate rental and their businesses will create more jobs for Thai people and provide more benefits to the Revenue Office. However, he made it clear that the authority must strictly comply with the laws on business regulations, and the public should help monitor to prevent any illegal practices.
Overall, the influx of Chinese investment in Thailand’s real estate sector is a positive sign of growth and economic development. With more Chinese investors flocking to cities like Bangkok and Chiang Mai, it is expected that more job opportunities will be created, benefiting the local economy. As the tourism sector continues to recover, it is likely that foreign investment in the real estate industry will continue to increase, further driving economic growth in Thailand.
Thailand’s real estate market is experiencing growth and development, thanks to the influx of foreign investment, especially from Chinese investors. As the tourism sector continues to recover, it is expected that the demand for real estate will increase, benefiting the local economy by creating more job opportunities.
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