Thai developer turns to Hong Kong, foreign buyers for upscale Bangkok project as Covid-19 crimps demand at home, slams hospitality sector

Cheryl Arcibal
·3-min read

Dusit International is joining other Thai companies in tapping foreign investors by marketing its first residential project in Hong Kong after the Covid-19 pandemic crimped demand from local buyers and worsened a supply glut.

The hotel operator is building a 46 billion baht (US$1.48 billion) mixed-development project in the heart of Bangkok’s central business district, as part of an effort to speed up its income diversification plan, group chief executive officer Suphajee Suthumpun said.

The Dusit Central Park will have 406 residential units built on a 9.17-acre of land that formerly housed the iconic Dusit Thani Hotel, overlooking Lumpini Park. The project is expected to be completed by 2025 in a joint collaboration with local developer Central Pattana, she added.

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About one-fifth of the units will be set aside to entice Hong Kong buyers during the company’s overseas marketing stopover in the Asian financial hub on April 15, Suthumpun added.

Thailand’s property market has been struggling even before the pandemic hit last year. Inventory of apartments and landed houses in Bangkok jumped 28 per cent in four years to 176,000 in 2019, according to Savills. Supply amounted to 86,000 units at the end of 2020, Colliers estimated. Visitor arrivals slumped last year to the lowest since 2008.

“Overall, our market for the midscale and even high-end could still take some time [to improve] because of the supply that flooded the market in recent years,” CEO Suthumpun said. The market may take two to three years to recover, based on economic projections, she added.

At Dusit Central Park, the company is selling a 55 sq m (592 sq ft) one-bedroom unit at HK$4 million or about HK$72,730 per sq m. The lowest asking price for a flat on sale around Lumpini Park is about the equivalent of HK$62,205 per sq m.

The same outlay may only get less than a quarter of the size of the one-bedroom unit at Dusit Central Park, using the price at Grand Victoria in Cheung Sha Wan as a comparison.

The iconic Dusit Thani Bangkok Hotel sat on the site until it was closed in 2019 to make way for Dusit Central Park. Although the development plan was decided in 2017, Suthumpun said it was also precipitated by a desire to optimise the full value of the property. The pandemic has since hastened the process.

General view of Sino Group’s development, Grand Victoria project at Lai Ying Street, South West Kowloon. Photo: K.Y. Cheng
General view of Sino Group’s development, Grand Victoria project at Lai Ying Street, South West Kowloon. Photo: K.Y. Cheng

“For hotels, you need to put a lot of capital, then the returns will come gradually over time before you can get the payback,” Suthumpun said. “But if you also add other elements to give you some short-term returns, like say, residences, then you have balanced your investment quite well.”

Thailand received 6.7 million foreign visitors last year, according to government data, lowest since 2008. Dusit operates 340 properties in 15 countries, with the segment at one time contributing as much as 80 per cent to the group revenues.

“Now, the segment is contributing 60 per cent and my target is [to bring it down further to] 50 per cent,” said Suthumpun.

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