LONDON CALLING

Property consultant Knight Frank Thailand aims to sell 30 London residential units worth nearly B2bn to Thai buyers this year.

Property consultant Knight Frank Thailand aims to sell 30 London residential units worth nearly 2 billion baht to Thai buyers this year, up from 12 worth 720 million last year, driven by strong demand from parents and investment buyers.

Frank Khan, executive director and head of residential, said the number of Thai buyers looking for London property has been on the rise since last year as the pound is 20% weaker against the baht.

“Demand last year was from both parents looking for a unit for their children during their studies, as well as investment buyers who wanted to take a chance on capital gain from the weak currency. That trend will continue this year,” he said.

According to the Independent School Councils and Knight Frank’s The Wealth Report 2017, the number of Thai students starting the 2015/16 school year in UK private schools totalled 303, an increase of 124% from 135 in 2005/2006.

Thais had the second-highest growth over the period, following only mainland China with 191% growth and 2,924 students. The third-highest growth rate was Russians with 120% to 753, followed by Spanish (108% to 952) and Middle Easterners (91% to 363).

Last year Knight Frank sold 12 residential units in London to Thai buyers, comprising nine apartments in central London priced from £800,000 to £2.5 million, with an average of £1.2 million (50 million baht), and three houses in outer London priced £2 million each.

In 2015 it sold only three units priced £2 million each. The key driver last year was Brexit, which weakened the pound. Buyers also had more bargaining power, particularly for resale units.

“After the Brexit referendum, many Europeans who owned properties in London wanted to exit, eager to re-sell them as soon as possible,” said Mr Khan.

“One of our Thai customers last year got a bargain on a resale apartment in Kensington for £2.3 million, down from an offer price of £3 million, from a European owner.”

Among Knight Frank’s sales targets this year are Kasikornbank (KBank) Private Banking customers, who have minimum net assets of 50 million baht.

There are around 10,000 private banking customers with total net assets of around 700 billion baht under KBank’s management. KBank Private Banking customers represented 80% of the buyers of the 12 residential units sold in London last year.

The wealth report noted the number of Thais who had total net assets of US$1 million or more was 22,400 last year, up from 20,700 in 2015. The figure is expected to rise to 38,100 by 2026.

Those with $10 million or more totalled 1,400 in 2016, up from 1,300 in 2015 and expected to increase to 2,380 over the next decade.

The number of Thai ultra high-net-worth individuals (UHNWIs), or those with $30 million or more in net assets, totalled 620 in 2016, up 8% from 570 a year before. The figure is forecast to rise to 1,050 in 2026.

Around the globe, the number of UHNWIs rose by 6,340 or 4% to 193,490 in 2016 from 187,150 in 2015. The highest growth by region was in Australia with 11%, followed by Russia with 10% and Asia 8%.

By 2026 at a regional level, North America will still be the key hub for UHNWIs with a population of 95,860, a rise of 31%, followed by Asia-Pacific with 88,180, up 91%.

Asia had 27,020 fewer UHNWIs than North America last year, but by 2026 the difference is projected to shrink to just 7,680. UHNWIs in Europe are predicted to increase only 12% over the period.

Cities in the US and Greater China appear prominently near the top of the rankings for absolute growth in the ultra-wealth bracket. The US tops the chart, with New York City reaching a population of 7,722.

With exponential growth in the UHNWI population in China, Shanghai and Beijing are expected to close in on the US.

The value of the world’s leading prime residential markets recorded slower growth in 2016, up only 1.4% on average, down from 1.8% in 2015.

In Bangkok, prime residential prices rose 4%, ranked 20th among 100 leading cities, while those in Phuket rose 0.52%, ranked 54th.

The highest growth in prime residential prices was in Shanghai at 27.4%, followed by Beijing at 26.8%, Guangzhou at 26.6%, Seoul at 16.6% and Auckland at 16%.