China becoming top foreign market for Thai property developer

[BANGKOK] Sansiri Pcl, one of Thailand's largest property developers by sales, sees China becoming its biggest foreign revenue source as early as this year, the latest sign that the world's largest property-buying binge is undimmed by China's tighter capital controls.

The Bangkok-based developer has seen no cancellations from Chinese buyers since the world's most-populous nation imposed stricter rules to deter residents from buying overseas property, Head of International Business Cobby Leathers said in an interview. Sales from China are on track to double to US$106 million this year, and estimated to jump another 32 per cent to US$140 million next year, according to the firm.

For Sansiri, the growth means China is set to overtake Hong Kong as its top foreign market next year, President Srettha Thavisin said. Sansiri is "highly reliant" on foreign buyers and as much as 40 per cent of the developer's sales are from buyers in Singapore, Hong Kong and China, according to RHB Securities.

Tighter capital controls have done little to dent the appetite of Chinese buyers who already helped drive prices higher across the globe. While definitive data are hard to come by, real estate brokers including Knight Frank LLP, Savills Plc and domestic firm Shiju report rising purchases of overseas property this year by Chinese buyers.

Stricter enforcement of quotas to convert yuan for property purchases have spurred Chinese buyers to buy cheaper properties, helping developers in markets where home prices aren't inflated. Most of Sansiri's Chinese buyers bought homes priced between US$150,000 to US$300,000, Leathers said.

Those prices are "only a third or half of those in Chinese cities," he said.

Sansiri is the second-biggest Thai developer by trailing 12-month revenue, according to data compiled by Bloomberg. China will likely contribute 40 per cent of overseas revenue overseas next year, eight percentage points more than in the first half of this year, the firm said. Sansiri is adding three more Chinese offices in Shanghai, Guangzhou and Shenzhen to its existing Beijing foothold to expand its local network.

"If the ban hadn't been in place, we would have gone a lot more aggressive in marketing here," said Mr Thavisin.

BLOOMBERG