Pacific Star International (Thailand) plans to bring more foreign funds to invest in the Thai property market as assets here can generate high returns at double-digit rates.
“They are global financial institutions, banks and insurance companies, who aim high and are happy to invest here. Investing in Thai properties could produce an internal rate of return of 15%,” Daniel Ross vice-president for business development and direct investment said.
The parent company Pacific Star Group from Singapore now manages five property funds including the US$250-million Asian Real Estate Prime Development Fund, which was set up offshore to invest in property markets across Asia. The fund initially had a policy to allocate ten percent of total assets to Thailand.
Among the money poured in the Thai real estate market, some went to two joint ventures with SET-listed Asian Property Development (AP).
“We’re looking to raise more funds and expand the fund size to four hundred million dollar in a few months,” Mr Ross said.
Pacific Star International is now studying two or three possible deals, which would be settled within this year. It also plans more ventures with AP in the future if any interesting projects arise.
Mr Ross noted that the company was interested in developing new hospitality projects in prime destinations such as Samui and Phuket. Wealthy investors, particularly from the Middle East, are very interested in owning beachfront resort villas in the kingdom.
Pacific Star International is currently involved in four projects. Two are joint ventures with AP while the other two, Sathorn Gardens and Eight Thong Lor, are being developed on its own.
Urasate Navanugraha, the company’s assistant vice-president for asset development, said the four projects were progressing well. Sathorn Gardens has just finalized sales of hundred units in the first phase and 20% of ninety five units in the second phase have been reserved.
“We expect to sell out all units in the second phase by September. After that, we will decide what to do with the remaining one hundred fifty five units based on market situations,” he said.
The property company plans to stage road shows in Hong Kong, Singapore, Dubai and India over the next five months to promote Sathorn Gardens, two 41- storey condominium buildings. The average selling price is 100,000 baht per square metre.
The Eight Thong Lor mixed-used project launched presales of condominiums early this year with a 40% booking. The project would have 5,000 sq m of retail space, a serviced-apartment zone and residential condominiums. Construction is expected to be completed by the middle of next year.