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LH to develop Terminal 21 malls in Pattaya, Phuket

SET-listed property developer Land and Houses Plc (LH) plans to spend 14 billion baht to build Terminal 21 shopping centres in Pattaya and Phuket.

The investment value of the two shopping malls is estimated at 7 billion baht each, compared with the 3-billion-baht price tag of the first Terminal 21 in Bangkok, LH chairman Anant Asavabhokin said without giving a time frame for development.

The new malls are part of the company’s 20-billion-baht expansion plan over the next six years. Terminal 21 Korat is another project in the pipeline. LH said recently that it would begin developing the shopping mall in Nakhon Ratchasima province next year.

Mr Anant spoke of great potential in the retail business, particularly upcountry, but said LH would use caution next year while awaiting a clearer economic picture.

Apart from shopping malls, the company will turn its attention to hotels and property investments in Britain, he said.

LH will also continue to put money into rental property projects in the US, aiming to invest 15 billion baht over the next several years on top of 5 billion in past spending.

Next year’s investment budget will resemble this year’s amid an uncertain economic outlook, Mr Anant said.

“We will maintain business expansion [in terms of investment budget] next year to be equivalent to this year’s,” he said.

“It is our conservative investment plan in the current economic situation. We need to wait and see if there will be clarity both internally and externally, though local economic momentum is showing better signs.”

The government’s stimulus measures to aid low-income earners and small businesses will ease financial burdens and give a boost to Thailand’s overall economy, Mr Anant said.

In his view, the property market has already bottomed and is on track to rebound.

The property sector avoided big problems but was hit by weak domestic consumption and homebuyers’ difficulty in accessing bank loans, he said.

Next year, LH plans to launch a real estate investment trust (REIT) with shopping mall and hotel projects as the underlying assets, aiming to raise fresh funds for business expansion.

In other news, Land and Houses Bank (LH Bank) is still in talks with potential strategic partners from three Asian financial institutions.

The Asavabhokin family, the founder and major shareholder of property companies Land and Houses and Quality Houses, owns about 75% of LH Financial Group, the parent of LH Bank.

LH shares closed yesterday on the SET at 8.10 baht, up 5 satang, in trade worth 101.15 million baht.

China’s middle class is now the biggest in the world, and growing much faster than America’s, according to research by Credit Suisse.

There are 109 million Chinese with wealth of between $50,000 and $500,000. Since 2000, twice as many Chinese as Americans have joined the middle class.

Credit Suisse measured wealth rather than income to avoid temporary changes caused by unemployment, for example.

Chinese are getting richer at an astonishing rate. Wealth per adult has quadrupled to about $22,500 since 2000. The country now accounts for a fifth of the world’s population, while holding about 10% of global wealth.

“The wealth of the country’s households could well continue to leapfrog the growth rates of developed economies,” Credit Suisse said.

China should also see the number of millionaires soar 74% to 2.3 million by 2020, according to the report.

A report by UBS and PricewaterhouseCoopers found that a new billionaire was created almost every week in China in the first quarter of the year.

Make a right investment

February 15, 2019ZONEZI No commentsBusiness, News

With the island’s real estate market staying strong, some owners could be thinking of selling their property. If so, here are some tips for making this move.

Establishing a Price

Consider what you paid for the property, how long you have lived there, what similar properties have sold for, any improvements added, present condition of the property, ask the agent about the current property climate and arm yourself with the facts.

Signage

Allowing the agent to erect a sign is very important as their brand name and reputation may draw in passers by as they understand the professional nature of the company which can assist with the buying process while also representing their interests.

Qualifying the buyer

A major part of the agent’s job is to ensure that you have a genuine buyer, that he or she is serious and that they actually have the funds available. Many times private sales end in disaster and wasted effort due to misunderstandings between the parties and lack of knowledge of the buying process.

Price Parity

If you are not listing exclusively with one agent, then ensuring that other agents offer the same price is important.

Negotiating

The key to remember is to not get wrapped up in any games. If you keep your goals in focus at all times, you will be better able to respond to offers. You will have three choices when an offer comes in. You can accept the offer, reject the offer or make a counter offer. In the end it is what the buyer is willing to pay that counts.

Sharing costs

In Thailand, it is customary for the seller and buyer to share the transfer costs 50/50, but this is up to you to negotiate. Sellers must understand the costs associated with selling their property and incorporate them into the selling price. Trying to renegotiate who pays what fees after a selling price has been agreed with a buyer will almost certainly lose the sale.

Buyer payment

Let your agent know at the beginning where and how you wish to be paid, as many buyers wish to make payment offshore or outside Thailand and they need to know up front to avoid unnecessary bank and interest charges. Regardless, a percentage of the purchase price must be paid in Thailand to cover transfer and tax fees but the amount depends on negotiation with the seller.

Title Deed

Ensure that there are no complications and that the property is free to be sold with no encumbrances and that the seller is the name on the back of the title deed (or company). If the property was set up through a Thai company, then the company must be ‘clean’ and cannot have been used for other business.

Sellers must ensure that they have all necessary original documentation for their property to complete a sale. A seller should be prepared to provide a buyer with copies of all property documents as soon as a sales price has been agreed so the buyer can complete due diligence on the property. If documentation cannot be provided in time, or is missing, this will delay the sale and could lose the sale altogether.

Incentives

To set your property aside from others, it is a good idea to offer some enticement such as advance rental bookings, thereby effectively giving the buyer a reduction in sales prices; free furniture; maid for a period; and so on.

Reservation deposit

When the buyer makes an offer acceptable to the seller, usually a non-refundable deposit is taken until such time as contracts are exchanged. This is a minimum 150,000 baht or 1 per cent of the selling price, whichever is greater. The reservation agreement allows the buyer 21 to 45 days to review and agree to the contracts. If a deal cannot be reached in that time, the reservation can be extended by mutual agreement.

From offer to close

It is normal once a reservation deposit has been secured for the process to take one to two months or more to the final payment. The buyer first needs a lawyer to do due diligence and for the seller to provide a ‘sale and purchase contract’ which has to be reviewed and agreed by the buyer’s lawyer and any changes made and agreed between the parties.

Once this is completed and contracts are signed, a visit to the land office to exchange title deed and buyer’s final payment is the final stage. In some instances, you may need to first give the land office a 30-day notice period prior to transferring ownership.

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The Board of Investment of Thailand (BOI) has expanded its 2016 investment value target to 550,000 million baht ($ 16 Bln), an increase of about 20% from the previous target of 450,000 million baht

Improved political and economic situation enhance investment climate and investors’ confidence and New opportunities explored in overseas markets while actual investment activities in Thailand to be accelerated.

BOI manpower to be expanded to support more aggressive investment promotion Driven by political and economic recovery, the Board of Investment of Thailand (BOI) has expanded its 2016 investment value target to 550,000 million baht ($ 16 Bln), an increase of about 20% from the previous target of 450,000 million baht.

The new target was announced at the annual meeting, chaired by Deputy Prime Minister Somkid Jatusripitak, with the heads of the BOI’s 14 overseas offices today. Mr Somkid updated the meeting in Bangkok about the positive signal in political and economic recovery and global investment trend that moves toward Asia.

Considering such trend, he recommended BOI to increase manpower to support the expected increase in investment inflow and to grow new and existing markets across Asia, including Japan, Korea, China, India as well as Singapore.

“Other advantages, such as the benefits of using Thailand as the hub to grow business in China, ASEAN and India can be highlighted to draw more investment”

BOI has adjusted its application target from 450,000 million baht to 550,000 million baht. The 10 target industries will remain in focus. We hope to increase the proportion of investment in these target industries to more than 50% of the total investment application.

“Considering the very positive trend in investment applications, coupled with strong investors’ confidence towards economic and political development in Thailand, we are certain to achieve the new investment goal by the end of 2016.”

In the first seven months of 2016, the number of investment incentive applications by project increased by 77% while application value soared by 218%.

The BOI received 853 applications worth 320,720 million baht, up from 483 projects with a value of 100,740 million baht in the same period of 2015.

The value of project applications in the 10 target industries accounted for 43% of the total applications or 138,871 million baht, reflecting the success of investment promotion policy and execution. An investor confidence survey done by the BOI in May 2016 also showed a positive trend.

The survey, released last week, indicated that 32.8% of companies currently investing in the country have plans to expand their investment. The majority of respondents cited good infrastructure, sufficient supplies of parts and suppliers, efficient logistics and strong investment promotion incentives as key factors behind their decisions.

Meanwhile, investors’ concerns over political and economic instability have significantly decreased from the same period last year, showing overall improved confidence in Thailand’s political and economic development.

Investors’ concern over the government sector’s transparency has significantly dropped from 30.15% in 2015 down to only 19.38%. In addition, the increase in GDP growth from 3.2% in the first quarter this year to 3.5% in the second quarter contributed to improved confidence among investors and the business sector in the Thai economy and its outlook.

“Thanks to these positive factors, the overall investment outlook is promising,” said Mrs Hirunya.

To maintain and enhance the positive investment momentum and confidence, the BOI will continue its plan to promote Thai investment opportunities in major markets through international road shows. In the remaining four months, a total of more than 40 road shows are planned in major markets, such as Japan, South Korea, China and northern Europe. The BOI will also work closely with its partners worldwide, including leading organisations in the trade, investment and banking sectors.

Honorary investment advisers will provide information about investment opportunities and government support in Thailand.

“With a concerted effort from the BOI’s 14 overseas offices worldwide, local offices and concerned government organisations, we hope to attract more investment from foreign investors, especially in the 10 target industries that are crucial to supporting the transformation of Thailand to a knowledge-based economy. Coupled with the positive development trend and political and economic stability, the country’s strength as the gateway to ASEAN and South Asia, as well as the upcoming laws that enhance investment climate, including the new BOI law, Eastern Economic Corridor (EEC) law and the competitiveness fund law, Thailand is positioned well as the desirable investment destination,” said Mrs Hirunya.

Make a right investment

February 15, 2019ZONEZI No commentsBusiness, News

THAILAND: Thailand’s new six-month, multiple-entry tourist visas will become available Nov 13, but will limit stays to 60 days at a time.

New Visa

The six-month multiple-entry visa will allow unlimited border crossings during the validity period. However, to prevent foreigners from basically living in Thailand on tourist visas, each entry will be be limited to 60 days.

The new multiple-entry visa will cost 5,000 baht, versus 1,000 baht for a single-entry, 60-day visa, which can be extended in-country for up to 30 days for an additional fee.

More information

February 15, 2019ZONEZI No commentsNews

The total FDI into ASEAN countries in 2014 hit $136.2 billion, and Vietnam was the best performer among emerging territories in receiving inbound investment, according to the United Nations Conference on Trade and Development.

Companies in Thailand and Japan are both eager to grow outside their home markets, which have witnessed low growth and have mature markets, in contrast to Vietnam’s soaring rate.

Vietnam’s politicians also revised the nation’s laws covering M&As, to make the process quicker and more transparent. A new law enacted in July has cut the time to acquire an investment license to just 15 days, a reduction of about two-thirds of the earlier duration.

A month earlier, the government said that foreigners can now buy majority stakes in certain kinds of listed companies.

Vietnam has also specified 18 industries including consumer, property, transport, construction and manufacturing, where foreign investment is allowed.

Taken together, these measures have laid out a clearer path for companies interested in M&A.

“Thai companies have acted more swiftly than their Japanese counterparts in striking M&A deals.”

Yoshida said that the reason was slower decision making process in Japan.Thai companies Central Group and TCC Holding expanded their presence in Vietnam’s retail market with the acquisitions of Big C Vietnam, and the Vietnam operations of fashion e-commerce platform Zalora and Metro Cash&Carry.

Another big-ticket deal that involves a Thai corporate buyer is the $1.1 billion transaction to buy majority stake in Masan Group‘s subsidiaries.

Meanwhile, Japanese investors have been active in various sectors, including ANA Holdings‘ strategic investment in Vietnam Airlines, Taisho’s acquisition of over 24 per cent in DHG Pharma, JX Nippon Oil & Energy’s 8 per cent shareholding in Petrolimex — the country’s largest distributor of petroleum products — and AEON‘s purchase of two local retailers.

Choose your investment

February 15, 2019ZONEZI No commentsBusiness, News

JW Marriott Phuket Resort & Spa has once again been recognized by the prestigious world-class travel magazine Condé Nast Traveler in their Reader’s Choice Awards.

JW Marriott Phuket Resort & Spa is only resort on Phuket that has achieved this acclaimed award and recognition for second consecutive year.

The Reader’s Choice Awards are held annually by Condé Nast Traveler by conducting a poll of their readers for the best in the travel industry. More than 128,000 travellers took part in this 28th annual Reader’s Choice survey to choose the best from resorts, spas, cruise ships, airlines and airports.

“We are very thrilled to receive this prestigious award for second time in a row. Among the greatest of accolades a resort could be honoured with. Every single day we strive to provide the finest hospitality and epicurean experience to our guests, and to maintain to be recognized as one of the Best Resort in Asia, granted by Condé Nast Traveler’s readers is extremely rewarding for our associates,” said Oriol Montal, JW Marriott Phuket Resort & Spa’s General Manager.

Since opening in December 2001, JW Marriott Phuket Resort & Spa has clinched more than 200 awards and is highly recognized in Asia for its outstanding Family, Eco-friendly, MICE and five-star luxury resort facilities.

Being on this year’s Reader’s Choice Awards complements other awards that the resort has won, such as The Certified of Excellence Hall of Fame by TripAdvisor, which is granted only to businesses that have won the Certificate of Excellence for five years in a row.

JW Marriott Phuket Resort & Spa has also listed first in the Top 25 Hotel for Families in Thailand as well as fifth in the Top 25 Hotels for Families in Asia category by TripAdvisor,a s well as Smart Travel Asia Reader’s Awards (HK) Best in Travel Poll, Eat Drink Travel (EDT) Top 10 Travel Family Fun Time, by edt guide; and an Award of Excellence for Resort Hotel (80 rooms and over) in the 10th Thailand Tourism Awards by Tourism Authority of Thailand.

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As internet penetration rates continue to rise in Southeast Asia, ASEAN grows more interconnected by the day.

Home to over 663 million inhabitants, the region is projected by many to be among the world’s most promising markets for a variety of internet based services.

Chief among these are services involved in what has been coined the “sharing economy” – a loose collection of peer-to-peer services known to substantially lower costs for key necessities such as transport and accommodation.

In a 2014 study conducted by Nielsen, Indonesia and the Philippines ranked as two of the top five populations worldwide primed to participate in the sharing economy. While Indonesia ranked second in the study, with 87 percent of respondents reporting a willingness to utilize products within a sharing economy, the Philippines only trailed by two percentage points, earning fourth place Vietnam

Thailand: New KYC Guidelines Issued

Thailand’s central Bank of Thailand (BOT) has introduced new regulations to ease the Know Your Customer (KYC) process using the electronic process (e-KYC) to open accounts on deposit acceptance of funds accepted from the public. Financial institutions globally are increasingly being required to comply with KYC guidelines under the anti-money laundering law (AML). As per the BOT Notification No. SorNOrSor. 7/2559 the following guidelines have been issued.

E-KYC procedures must have the same standards as KYC procedures and available only for individual customers using electronic means such as computers, mobile phones, other electronic devices etc. Financial institutions however, must get prior approval from the BOT.
Electronic signatures are acceptable.
Verification of customers must be done using ID cards or a smart card reader
Financial institutions must retain all information including KYC documents or their copies as per the AML law.

The regulation went into effect in August.

Vietnam

As Vietnam increasingly becomes a hub for foreign businesses, the government is streamlining the mergers and acquisitions (M&A) process to encourage investment in new sectors of the economy. While establishing a business in Vietnam may prove too cumbersome for some hopeful entrants, the M&A route provides a unique solution to many of these obstacles. With this path, investors will enjoy preexisting access to consumers, locations, and distribution channels. This local knowledge can prove critical to successful operations within Vietnam’s vibrant but rapidly changing investment environment .

To successfully carry out M&As within Vietnam, it is important to recognize the legal foundation of current policies, and to understand the procedures and limitations associated with acquisitions in Vietnam..

Make a right investment

February 15, 2019ZONEZI No commentsBusiness, News

The Thai Government’s push to drive up property sales by making mortgages more accessible to millions of people through transfer and mortgage registration relief has made headlines for months.

Customers seek home loan details from officials of the Government Housing Bank. The bank has offered cheap rate loan under the government’s property stimulus package. Photo: Bangkok Post / Phrakrit Juntawong

However, scores of people have yet to fully understand what the rule changes are, and what the changes mean to them. (See story here.)

The first factor to keep in mind is that the changes so far are only a temporary reduction of Thai real estate transfer and mortgage registration fees, effective October 29, 2015 to April 28, 2016.

Here, the rest of this article aims to explain in simple terms what the changes are:

The relevant details of the three regulations providing for the fee reductions are as follows:

Part 1. UNREGULATED LAND AND BUILDINGS

Law: Ministry of Interior Regulation Regarding Registration Fee under the Land Code for Housing (published in the Royal Gazette on October 28, 2015)

To boost the sale and purchase of immovable property in Thailand, the Cabinet on October 13, 2015 resolved to set the registration fee under the Land Code for the transfer and mortgage of housing property as follows:

Clause 1: Registration fee for the transfer of residential: detached house; twin house; row house, and commercial building, and any of these buildings with land where the building is located and such land is NOT under Land Allocation Act or under any development by the government, and mortgage of the said transferred property, would be at the rate of 0.01%.

Clause 2: This regulation is effective from October 29, 2015 to April 28, 2016.

Note: 0.01% applies to:

– Transfer of any of these buildings;

– Transfer of any of these buildings + land that is not under Land Allocation Act or government’s land development;

– Mortgage of any of the above (if for example Mr A receives a house by gift or inheritance then he mortgages said house, he will not get this reduced rate);

– Not applicable to raw land (that is not in the licensed development);

– Not applicable to land that is not the location of the building even though such extra land is transferred (and mortgaged) at the same time as the house + land.

Part 2. LAND AND BUILDINGS WITHIN A LICENSED DEVELOPMENT

Law: Ministry of Interior Regulation Regarding Registration Fee under the Land Code for Immovable Property Licensed under the Land Allocation Act (published in the Royal Gazette on October 28, 2015)

To boost the sale and purchase of immovable property in Thailand, the Cabinet on October 13, 2015 resolved to set the registration fee under the Land Code for the transfer and mortgage of immovable property that is in licensed development under the Land Allocation Act as follows:

Clause 1: Registration fee for the transfer of land, land and residential building: detached house; twin house; row house, and commercial building, under Land Allocation Act or under any development by the government, and mortgage of the said transferred property, would be at the rate of 0.01%.

Clause 2: This regulation is effective from October 29, 2015 to April 28, 2016.

Note: 0.01% applies to:

– Transfer of land only, or land and any of these buildings in the licensed development project or the government’s development project;

– Mortgage of any of the above (if for example Mr A receives a developed raw land by gift or inheritance then he mortgages the land, he will not get this reduced rate);

– both first hand and resale.

Part 3. CONDOMINIUMS

Law: Ministry of Interior Regulation Regarding Registration Fee under the Condominium Act (published in the Royal Gazette on October 28, 2015)

To boost the sale and purchase of immovable property in Thailand, the Cabinet on October 13, 2015 resolved to set the registration fee under the Land Code for the transfer and mortgage of condominium unit(s) under the Condominium Act as follows:

Clause 1: Registration fee for the transfer of the following condominium unit under the Condominium Act and mortgage of such transferred unit, would be at the rate of 0.01%:

(1) Transfer, and mortgage of all units at once in any licensed condominium under the Condominium Act;

(2) Transfer, and mortgage of any condominium unit in any licensed condominium under the Condominium Act.

Clause 2: This regulation is effective from October 29, 2015 to April 28, 2016.

Note: 0.01% applies to:

– Transfer of the whole condominium building or individual unit;

– Mortgage of the above (if for example Mr A receives a condominium unit by gift or inheritance then he mortgages the condo, he will not get this reduced rate);

– both first hand and resale.

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For several years now, commentators – particularly in the business community – have opined that Thailand is in need of a significant infrastructure upgrade such as its mass transportation, road and railways systems.

Investment in state infrastructure projects may pay off better for some, depending on the understanding of what rights and forms of redress they may have.

The government appears to agree. Despite the differences between Thailand’s two main political parties, both of them have presented proposals for large scale and comprehensive infrastructure projects. Both parties continue to agree that Thailand needs to invest significant amounts to modernize and improve its infrastructure.

In such circumstances it is not uncommon for a government to encourage private sector investment. Such private participation may have several benefits for the government. These may include technical or managerial expertise not available domestically, a larger and more competitive bidding pool for the project and, depending on the type of private participation, project financing.

Where the potential private investor is foreign, a significant consideration will be an assessment of the protections afforded to the investment. Internationally, this is usually provided by substantive rights and enforcement provisions in a public-private contract (“PPC”) between the host State and the foreign private party or under any relevant investment treaty (“IT”) or both.

The following will briefly explain what types of rights and enforcement provisions are commonly available to foreign investors under these two options and conclude with a brief comment on the current investor-State situation in Thailand.

SUBSTANTIVE RIGHTS

The rights afforded to an investor under a PPC are for the contracting parties to determine and may vary with regard to the type of investment. However, a common concern for foreign investors is that the State may enact or change its law relevant to the investment such that it would diminish the investment’s value. Thus, an example of a substantive right commonly included in the PPC for the investor is a provision, which applies the law of the host State – at the time of the investment – to the investment throughout its duration. This is commonly known as a “freezing clause”.

Whereas the investor will need to convince the host State to include investment protection provisions contractually, ITs provide such protections to the investor without such requirement.

ITs take three common but different forms:

Bilateral agreements between two countries (BITs) and to which Thailand is currently a party of at least 34 such agreements;
Multilateral investment agreements between more than two countries (MITs) and of which the 2009 ASEAN Comprehensive Investment Agreement (ACIA), to which Thailand is also party, is a good example; and
Free-trade agreement (FTA), which although not dealing only with investment protection issues, commonly include such provisions. The 2009 ASEAN-Australia-New Zealand Free-Trade Treaty (AANZFTT) is a good example of an FTA and to which Thailand is a party.

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