The facts and figures of Thailand’s overall property market may well be weaker than many would like at the present time, but this is not stopping leading firms making serious decisions about the prospects for future developments within the sector.
One major Thailand-based company, Aira Capital, announced plans to diversify into the business of property development at the end of June, and has since set up a subsidiary company called Aira Property. This new division has already been involved in entering into a joint venture with another property developer, Sena Development and Sangfah Construction and Engineering Co Ltd. 
When launched, Aira Property had a registered capital of 200 million baht, with parent company Aira Capital holding the entire stake.
The CEO of Aira Capital, Nalinee Ngamsettamas, was quoted as saying that the company considered “property development to have high potential and it is expected to grow in line with a surging demand for accommodation and the economic upturn. Also, this business will create [a} sustainable income for us in the long term.” 
The CEO said she expected to see a number of foreign companies investing in property in Thailand over the coming years, which made this an ideal time to start a property development business.
That said, Aira Capital realized the limitations of their Aira Property division and has actively sought out partners with expertise in the field of property development. Hence the joint venture deal with Sena Development and Sangfah Construction and Engineering Co Ltd which was announced in the second week of July.
While 75 percent of Aira’s capital will be retained for use in its core financial business, the remaining 25 percent will go into its non-financial sector.
The new property division will concentrate on developing high-rise buildings such as offices and condominiums with income to be generated through direct sales or by collecting rental fees for short and long-term contracts.
The announcement of the joint venture deal with Sena Developments and Sangfah Constructions consists of a Memorandum of Understanding for the two companies to jointly invest in at least five high-rise building projects worth five billion baht over the next five years.
There are no specifics on the purchases to be made as yet, although all the developments will be restricted to Bangkok. They may be in the acquisition of existing buildings or the development of new ones. The first area of development is expected to be in office buildings with space for rent.
The first project is expected to start in the second half of this year. As the CEO notes, “We see a huge demand for…high-rise buildings in Bangkok and it is likely to grow continuously in the future following more foreign investment. Therefore, it is a good chance for [the] three of us, who have different strengths in financial, property development and construction, to boost the partnership and move forward together.” 
While the overall share structure has not been disclosed as yet, Aira Property is expected to take at least 60 percent of the assets and liabilities. The CEO also stated the intention of listing the joint venture on the Thai Stock Exchange (SET) and turn the assets into a Real Estate Investment Trust (REIT) at some point in the future.
Parent company Aira Capital has also announced that it will be entering into a joint venture with at least one or more leading foreign companies in the insurance or leasing business in a deal they expect to be finalized within the next two months.
The CEO said Aira Capital is in discussions with two British and three Japanese companies and hopes to effect a deal with at least one of them.
Aira Capital was not happy with its first half-year performance, with revenues falling short of expectations. The company had planned for a 10 percent growth in 2015 but sluggish revenues from brokerage, which constitutes up to 60 percent of its income, meant the yearly targets will likely not be hit. Aira Capital believes revenue will mainly be generated from the personal loan business in the next two years.
A JV aimed at the region
Another joint venture announced in the first half of July was that between Thai consumer giant Saha Pathana Inter Holding (SPI) and the Japanese logistics company Seino Holdings. The two have formed a joint venture company named Seino Saha Logistics, to support the expansion of SPI’s distribution network in the Southeast Asian region. 
The new company has a registered capital of 20 million baht with SPI (a SET-listed company) holding 49 per cent stake and Seino 51 per cent.
The managing director of SPI is quoted as saying Thailand would become a logistics centre in the Southeast Asian region because of its geographical location and the joint venture would help drive SPI’s intended growth.
Management said the new company would initially focus on Cambodia, Laos, Myanmar and Vietnam with a revenue target of one billion baht from logistics in 2015. This would be made up of 80 percent from SPI’s goods and the other 20 percent from other companies.
The company expects revenues to reach five billion baht in the next three to five years.
Foe Seino, this is their second investment in Southeast Asia, having set up a firm in Malaysia previously.
According to the management of Seino, the Japanese company wanted to become a player in the Southeast Asian logistics industry.
Saha already has around 300 companies under its umbrella with quite a few in joint ventures with Japanese companies. 
Apart from logistics, SPI plans to continue investing more in high-potential sectors such as food, property, industrial estates and services rather than textiles, which had been its main business in the past.
SPI recently developed its first industrial estate, in Mae Sot in northern Thailand, one of the new Special Economic Zones (SEZ). It is considering developing a second estate in Sakaeo province to serve the growth in croos-border trading.
SPI is also building a so-called Japanese Town in the Sriracha Industrial Park in Chonburi, comprising 190 units of accommodation. It is scheduled for completion by early 2016.