Chinese wealth and investment patterns in Southeast Asia

PropertyGuru invites Sorn Seap, P. Ryan Isip, and Kamolpat Swaengkit, to discuss Chinese investment in Southeast Asia 

In this first International Panel Discussion by PropertyGuru, experts share insights regarding how Chinese investment fuels the Southeast Asian property market, specifically Cambodia, the Philippines, and Thailand.  

Winston Lee, director of special projects at PropertyGuru Group and moderator of the panel discussion, kicks off the virtual event with some data insights into Chinese wealth and their investment patterns in Southeast Asia.  

The countries that are the top search in China include Japan (22 percent), Thailand (21 percent), and the U.S. and Malaysia (12 percent). Being the top outbound tourist destinations, these countries receive high chances of property investment by mainlanders.  

The four main drivers for investment preference are as follows: 

1. Return on Investment 
2. Second-home (future retirement): As many mainlanders want to escape the cold harsh winter, especially in northern China, weather-friendly destinations like Phuket, Pattaya, Boracay, Siem Reap, and Sihanoukville are very attractive.
3. Education & Business: Many of these investors’ factories in China are no longer competitive due to the higher cost of land, so they move out to seek cheaper labour. They also purchase property in countries where they send their children to pursue international education. 
4. Geography & culture: Geographic proximity is convenient, and Southeast Asian culture is much more similar to China than Western culture.  

Despite COVID-19, China continues to be the only major economy with positive GDP growth at 2.3 percent with all wealth groups seeing growth post-pandemic.   

Heading off into the panel discussion, Sorn Seap, executive vice president at Cambodian Valuers & Estate Agents Association and PropertyGuru Cambodia Property Awards Chairperson, says that Cambodia’s infrastructure development has been a key attraction.  

There are four areas for Chinese investment, which include infrastructure, manufacturing, construction, and real estate.  

Moreover, Seap mentions the change in demand and buying patterns of Chinese investors after the arrival of COVID-19.  

Before the pandemic, “Cambodia was actually young in terms of attracting investment from China, but there’s a long history of relationship between both countries,” he says.  

About three to four years ago, Chinese investment started to pick up, with the hotspots being Sihanoukville and Phnom Penh. Sihanoukville transformed from a small town into a big city with numerous constructions ongoing, even during last year.  

Foreign direct investment from China increased by 31 percent, but 2021 has experienced a slowdown due to the COVID-19 pandemic situation. He expects many Chinese projects to continue with their construction, and those completed are simply waiting for businesses to start running again.  

P. Ryan Isip, head of capital markets at JLL Philippines, talks about Chinese firms in the Philippines. As the government welcomes Chinese investors with open arms, many look for residential condominiums in the Philippines.  

When compared to big cities like Beijing, property in Manila is considered low-priced, which makes it even more attractive to mainlanders. Isip also analyses an overspill from Metro Manila into provincial areas, leading more attentiveness towards townhouses or beach resort property types.  

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K. Kamolpat Swaengkit, country manager at DDproperty Thailand, shares data on DDproperty’s consumer sentiment study. She also adds that Bangkok and Pattaya are the top choices in property investment, with the biggest preference being properties listed around THB2.5 million (USD77,130) to THB5 million (USD154,261).