James Chambers reporting from Bangkok: The president of Sansiri, one of Thailand’s largest residential developers, explains why foreigners are flocking to Bangkok to buy up his properties.
Bangkok is still officially in mourning for the late king but no amount of memorial bunting can hide the apartment-building boom here. On the day we visit a whole team of multicoloured human-shaped inflatables are standing outside new residential towers in the upscale district of Sukhumvit, waving their arms at potential buyers. And almost every intersection is adorned with billboards advertising the next high rise with a grand English name to hit the market: The Marque, The Edition, The Essence.
Sansiri leads the way, with competition in the form of Ananda, Gaysorn Group, KPN Land and Land & Houses. It has five new condominium developments set to come onto the market in the second half of 2017 and a pipeline of construction sites across the capital. A copper-clad elephant-shaped showroom stands in the Thonglor district; inside is a scale model of a 27-storey residential tower called Khun by Yoo, which will stand proud here by the end of the decade. It incorporates 148 apartments starting at thb15m (€390,000), a shared screening room, an infinity pool on the 24th floor and fittings designed by Philippe Starck.
In May, Sansiri embarked on its global marketing for the project in Hong Kong, even though 60 per cent of the apartments have already been sold to local buyers. The reason: international money has once again been pouring into Bangkok and this year Sansiri has set itself the target of reaching thb8.7bn (€224m) in sales from overseas across its portfolio. “That’s by far the largest of any Thai developer,” says company president Srettha Thavisin, who has been jetting across the region to meet this ambitious aim. “It’s about one quarter of our total sales this year so I figured I needed to travel,” he adds, settling into a leather couch inside Sansiri’s airport-style lounge at the Siam Paragon shopping mall in downtown Bangkok.
Sansiri’s decision to look for more buyers beyond Thailand’s borders began about five years ago, when the Thai economy was stuttering. Around the same time the company signed a deal with the operator of the city’s elevated Skytrain, BTS Group Holdings, to co-develop properties along its new lines. “Hong Kong was the obvious first stop for sales,” says Thavisin. “Keeree Kanjanapas [bts’s founder] has business interests there. Teaming up with him gave us a shortcut to success.”
Last year Hong Kong buyers accounted for half of all overseas Sansiri sales and will continue to make up at least a third this year. The mid-range Line series of properties, co-developed with BTS, has proven especially popular. Apartments go for between thb3m and thb5m (€80,000 and €130,000) and Sansiri has already reached the overseas-ownership threshold in two of its Line-branded developments (foreigners can only own up to 49 per cent of total floorspace).
Hong Kong buyers are primarily looking to Bangkok for higher rental yields than they can get at home – and this investment sales pitch is finding new fans among the freshly minted Chinese middle classes, where property markets can be equally frothy. Later this year Sansiri plans to open three new offices in Shenzhen, Shanghai and Guangzhou to tap into this appeal. Thavisin can see Chinese buyers accounting for more money than Hong Kong in future – unless, that is, both are one day gazumped by the Japanese. The property rule of thumb used to be that Bangkok’s large community of Japanese expats do not buy in Thailand.
However, changing retirement plans are upending the status quo; Sansiri expects to triple its sales to Japanese expats during the course of this year alone. The company is also planning to announce a major tie-up with a Tokyo developer in late summer. Thavisin knows that Japanese expats’ patriotism makes them willing to buy from a familiar brand. As he puts it, “We don’t need money from Japanese developers: we need their clients.”
Sansiri is best known in Thailand as a luxury developer. For instance, the keys have just been handed over for the company’s new flagship development: 98 Wireless. This is a Fifth Avenue-style, 25-storey residence on Wireless Road with interiors inspired by the beaux arts, where apartments start at a cool thb70m (€1.9m).
Much to be positive about then – but it has not all been plain sailing. Development came to a grinding halt in 1997 with the Asian financial crisis. It was then that Thavisin, loath to lay off his loyal staff, sent out his team to find buildings to manage. Almost inadvertently he ended up setting up a property-services company, Plus Property, which made Sansiri the country’s only fully integrated developer. Today, also to be found under the Sansiri umbrella are a successful hotel collection called Escape and Habito, a community shopping mall that’s located in Sukhumvit. “Banks want to lend us money but we simply don’t have enough projects for them,” says Thavisin with a smile on his face.
The 55-year-old executive recently considered early retirement but after a six-month gestation period has decided to “fight on” for another three years and tackle his worries about industry disruption head on. Those concerns include everything from entering talks with the CEO of Airbnb to bringing co-living concepts to Thailand and using Plus Property’s customer intelligence to bring about a data transformation.
“We are lucky,” says Thavisin, “that residential property is one of the four essentials in life – alongside food, medicine and clothing.”
Annual revenue: thb34.4bn (€910m)
Developments currently under construction: 94
Employees (Sansiri and Plus Property): 3,521
Sansiri overseas sales offices: Singapore and Beijing (Shenzhen, Shanghai and Guangzhou opening this year)
Upcoming projects: The Monument Thong Lo; a condominium in Ekkamai (a joint venture with a Japanese developer); the Line project on Sathorn; and a condominium on Sukhumvit 36.