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Clamp-down on foreign owned land


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European fund invests 165 mln euro in Thai property

 

Fri Jun 16, 2006 8:23am ET10

 

 

LONDON, June 16 (Reuters) - A leading European property fund manager said on Friday it had formed a joint venture to develop residential real estate in Thailand in a deal worth 165 million euros ($208.9 million).

 

A spokeswoman for the 1.8 billion-euro ($2.28 billion) TMW Asia Property Fund (I) said it had joined forces with local firm Ananda Development to build and sell plush housing in the up-and-coming district of Suvarnabhumi near Bangkok.

 

The investment marks the fund's first big push into Asian residential property as well as into Thailand, she said. Georg von Werz, chief executive of Munich-based Pramerica Real Estate Investors (Europe) GmbH, which runs the fund, said he had been eyeing the Thai market for some time.

 

"We're delighted to have found in Ananda the right partner to implement an investment strategy in the segment of the Thai property market that we deem most promising: participation in the rapidly growing housing market," he said.

 

Pramerica is the European division of Pramerica Financial, the real estate arm of Prudential of the U.S. (PRU.N: Quote, Profile, Research) and one of the world's biggest real estate investors, with more than $30 billion in gross assets under management globally. Chanond Ruangkritya, Ananda's chief executive, said he welcomed the injection of European institutional funds and was bullish about the development's prospects.

 

"We are poised to become the leader in residential housing development in the Suvarnabhumi area at a crucial time when the area is expected to boom with Suvarnabhumi's new airport opening," he said.

 

Suvanabhumi is a new international airport east of Bangkok which due to open at the end of this year.

 

Pramerica's joint venture, called Ananda One, was looking to build and sell new housing priced between 2 million baht ($51,100) and 5 million baht ($127,700), a press release said.

 

A note from credit rating agency Standard & Poor's earlier this year said Thailand's average GDP per capita in 2005 was $2,728.

 

Pramerica also said the project had room to grow further through additional land acquisitions in the same area and in other locations.

 

Real estate development in Thailand is dominated by local firms and foreign investment has lagged other parts of Asia, although Singapore-based investors have put about 50 billion baht ($1.28 billion) into Thai property market over the last two years.

 

© Reuters 2006. All Rights Reserved.

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