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Chinese continue to soak up Thailand’s condo glut

The Thaiger

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Chinese continue to soak up Thailand’s condo glut | The Thaiger

There are man reasons why Thailand is a favourite location for property buyers from Hong Kong and mainland China – the street food and great weather are just a part of the allure.

Chinese nationals spent a record 40 billion baht (US$1.25 billion) on Thai properties in 2018, according to the Bank of Thailand.

So who is buying Thailand’s condominiums? Chinese, but buyers from the US, Singapore, Taiwan, the UK and Japan were also big spenders on condominiums looking at last year’s stats.

Meanwhile the Russians, up to recently being up big in the Phuket and Pattaya condo markets, has now dwindled due to the weak rouble, according to property analyst Phattarachai Taweewong from Colliers International.

“The rising popularity of Thai properties in China was such that units of condos marketed in the mainland were often sold out before the domestic sales.”

Thailand is experiencing a glut in the property market, Phattarachai said.

About 58,000 new condominium units were developed in the country in 2017, and 66,000 were built last year – compared to the usual 40,000 to 50,000 units developed annually.

Carrie Law, CEO and director of China’s biggest property website, Juwai.com, says that low prices and taxes were important factors that appealed to Chinese buyers in Thailand.

“Both Canada and Australia have declining property markets and new foreign buyer taxes. This helps drive investment away from those countries. Thailand does not impose extra taxes on foreign buyers.”

Carries says that Juwai.com received a record number of inquiries on Thai properties last year, with total sales in Thailand topping its 2018 charts for the first time. Australia and Canada have been pushed down to second and fourth place, respectively.

Foreigners are allowed to own 49 per cent of apartments in any Thai condominium project but are not permitted to own land.

In order to prevent a real estate bubble, the Bank of Thailand tightened lending policies which have made it more difficult for Thai people to buy homes, causing a slowdown in local property sales. But observers say interest from foreign buyers and Chinese investors will sustain the sector for years to come.

Read The Thaiger’s tips on buying a condo in Thailand HERE.

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Bangkok

Airline on brink of collapse, TG president warns

Greeley Pulitzer

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Airline on brink of collapse, TG president warns | The Thaiger

The president of Thai Airways has announced that the national flag carrier is in deep financial trouble and may have to fold unless staff members unite to work harder.

He also said that there may still be time, though not much, to save the company. “Otherwise speculation that THAI is going bankrupt will materialize and there is a chance that we will reach that point,” he declared, directly contradicting his claim earlier this month that that the carrier has no liquidity crisis.

In his speech on Tuesday to THAI executives at the company’s head office, the president cited fierce competition from low-cost airlines on the northern domestic routes, which used to generate a third of the airline’s revenue, adding that European routes have been affected by the strong baht and Brexit.

The airline is facing disruption to operations from cut-throat competition in the aviation industry in general, the closing of air space by some countries, high fuel costs and the grounding of a number of planes while they undergo major maintenance.

He disclosed that the airline ran up about six billion baht in losses in the first half of this year, which is expected to increase to 10 billion baht by year’s end. Losses for the past five years total 36 billion baht.

Although the situation looks grim, he said that he would not give up and urged staff members to “wake up and do something in earnest, because there is little time left for us. There is no more comfort zone, and we will all be dead if the ship sinks.”

SOURCE: thaipbsworld.com

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Bangkok

Another Thai hotel management dispute flares up – The Peninsula Bangkok Hotel

The Thaiger

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Another Thai hotel management dispute flares up – The Peninsula Bangkok Hotel | The Thaiger

PHOTO: The Peninsula Bangkok Hotel

The Hongkong and Shanghai Hotels, which operates luxury brand The Peninsula Hotels, says it will “vigorously defend its rights” to manage The Peninsula Bangkok, following a legal win by the hotel’s Thai shareholder that paves the way for the management agreement to be terminated.

And so the open wounds of a business saga are now on full display between a international hotel management company and the local Thai owners. This time it’s involving one of Bangkok’s best known luxury hotels.

Thai business law prevents many of the international hotel brands actually owning the properties so wealthy Thai families acquire the properties and then contract international hotel expertise to manage the assets where two entities are trying to get a larger slice of the pie. And, for now, the pie is getting smaller with the contraction in the traditional hotel business and the challenges Thai tourism is currently facing.

Peninsula Hotel, the iconic 370 room Chao Phraya riverside hotel, is 50% owned by the Phataraprasit family and the other half by The Hongkong and Shanghai Hotels’ subsidiary in Bangkok.

The Peninsula Bangkok is a 5-star hotel in Bangkok, Thailand. The hotel opened in 1998, counting 37 floors and 367 rooms.

Skift.com reports that the Thai shareholder went to court after it failed to end the agreement in the boardroom on January 26, as it was blocked by the Hong Kong and Shanghai Hotels subsidiary, which has a voting majority in the board. But on September 10, the local Thonburi Civil Court ruled that the subsidiary should not have been allowed to vote on a resolution regarding the termination of the agreement.

The legal case between a Thai owner and hotel chain managers over non-performance, isn’t the first. Minor International is suing Marriott International is sueing the Marriott Group for a “highly disappointing” performance of the JW Marriott Phuket Resort & Spa in Mai Khoa. Minor fully owns the luxury beachside hotel and and Marriott manages. The lawsuit was filed on July 12. The case is ongoing.

The statement says…

“Any termination of Peninsula’s management would be tantamount to a breach of the shareholders agreement between Hongkong and Shanghai Hotels and the Phataraprasit shareholders, as well as the Peninsula’s management agreement. Hongkong and Shanghai Hotels will vigorously defend its rights. Pending the outcome of the appeal and other legal processes which are ongoing, The Peninsula Bangkok continues to be operated by The Peninsula under the hotel management agreement which continues to be legally binding.”

Some background, the Thai Phataraprasit family, who also have interests in The Mall Group (that manages the Siam Paragon and Emporium shopping centres in Bangkok), alleges that The Hongkong and Shanghai Hotels had not run the hotel profitably in the last 20 years.

In an article in the Bangkok-based Travel Impact Newswire, Pradit Phataraprasit, head of the Thai family’s investments, had strong words.

“In the last 20 years, there has not been a single year in which the Peninsula hotel group’s management company has run the hotel profitably for its shareholders.”

“The Peninsula sits on one of the most expensive riverside land plots in this city but, very curiously, it cannot yield a dividend for its shareholders. We have been very patient with the management company belonging to our partners from Hong Kong. However, the time has come for another management company to run this hotel.”

For their part the COO of Hong Kong and Shanghai Hotels, Peter Borer, says the group had always operated “with integrity” regarding the operation of the hotel.

“Over the past decade, the hotel’s financial performance has been affected by political uncertainties and a challenging luxury hotel market in Bangkok, but as a group with a long-term investment philosophy, we have always remained committed to Thailand.

Commenting on the ongoing legal fracas….

“The daily operations of the hotel are not currently affected pending the final outcome of the legal actions.”

The company’s Q1&2 results shows the hotel had a drop of 5% in revenue compared with January to June last year. The average room rate rose 8%, but the occupancy rate dipped 6%.”

Reporting on the results so dar this year….

“The Peninsula Bangkok reported a relatively soft start to the year, impacted by a slower economy and uncertainty over the country’s first elections since 2014. Our hotel was also negatively affected by extensive roadworks adjacent to our property which impacted our food and beverage and catering business.”

Again, the Phuket boat tragedy, killing 47 Chinese tourists in July 2018, was presented as a key reason for current woes.

“Chinese mainland tourist arrivals declined year-on-year following a tragic boating accident in Phuket in 2018 which led to reduced group tourism to the country overall.”

Two years ago Pradit Phataraprasit was named as being involved in the Dhammakaya Temple scandal.

“Prominent Businessman Pradit Phataraprasit has denied any involvement in alleged embezzlement or the scandal-hit Dhammakaya Temple after records show he bought a land plot from a suspected money launderer.”

SOURCE: skift.com

Another Thai hotel management dispute flares up - The Peninsula Bangkok Hotel | News by The Thaiger

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Bangkok

Tax on salt content being considered

Greeley Pulitzer

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Tax on salt content being considered | The Thaiger

The Excise Department is considering imposing a tax on the salt content of food to encourage food producers to reduce the sodium content of snacks, instant noodles and seasoning cubes.

The director of the Office of Tax Planning said that the department is discussing a limit on the amount of sodium food can contain, in line with the standard set by the World Health Organization (WHO), which is 2,000 milligrams of salt per day.

In reality, Thai people consume an average of 1,000 milligrams per meal, making their daily intake well above WHO guidelines, according to the director.

He said any tax imposed would be at a level which would encourage food producers to reduce the sodium in their processed food without being punitive, adding that the proposal isn’t intended to generate more tax revenue, but to help protect the health of consumers. Excessive sodium in the diet can lead to high blood pressure and kidney disease.

Fish sauce, soy sauce and salt would not be taxed.

SOURCE: thaipbsworld.com

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