Thai developer Ananda pivots to ultra-rich in Asia after Porsche tie-up

[BANGKOK] As Thailand’s housing boom cools, Ananda Development is moving upmarket, striking a deal with Porsche and eyeing new projects in Tokyo and Shanghai to tap Asia’s growing pool of ultra-rich buyers.

The Bangkok-based firm is in discussions with several global luxury brands to secure master franchises across Asia, its top priority, chief executive officer Chanond Ruangkritya said on Wednesday (Nov 19). It is also exploring fundraising opportunities with foreign sovereign wealth funds to support its regional ambitions.

The company is already teaming up with Porsche to build a 21-storey apartment block in Bangkok’s Sukhumvit area, which will offer 22 units costing US$15 million to US$40 million when it’s completed in 2028. The building by Porsche Design will be the group’s first in Asia, after properties in Miami, Florida and Stuttgart, Germany, each outfitted with signature garage features to appeal to car enthusiasts.

“I want to build a Porsche hotel plus residential property,” Chanond said, suggesting more projects with the German firm.

Prime real estate in Asia is gaining momentum, fuelled by robust economic growth and rising demand from affluent buyers. The region’s population of individuals with fortunes exceeding US$10 million is projected to increase by 8.7 per cent by 2028 from last year, according to a report by real estate firm Knight Frank. That would be the third-fastest growth rate in the world after Africa and Latin America.

Tokyo and Shanghai are among Ananda’s potential destinations for developing ultra-luxury mixed-use property projects, combining six-star hotels and high-end residential units, in the next 10 years. It is also open to creating real estate investment trusts based on the projects as a source of recurring income.

The company plans to scale back its mass-market real estate portfolio in Thailand because “the party is over” in that segment, according to Chanond. The country’s high household debt and an ageing population are weighing on demand.

“As a company, our job is to find opportunities, from a red ocean to a blue ocean,” he said, referring to a strategy shift from saturated markets to untapped ones.

While the shift to the ultra-luxury market offers a good diversification, expanding overseas may present Ananda with a new set of challenges, according to Sopon Pornchokchai, president of Agency for Real Estate Affairs, a Thai property market research firm.

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“It will need to pair up with some good local partners,” he said. “Several major Thai developers tried to go to other Asian markets before abandoning those projects following large losses.” BLOOMBERG