If you were to ask which provinces, apart from Bangkok, are economically developed and have investment potential, many would likely think of 'Chonburi'. In 2015, Chonburi was ranked as the second most developed province in Thailand, following Bangkok, based on a composite score of 19 indicators from government statistics, achieving an average score of 95.42%, while Bangkok scored 99.86%.

This indicates that economically, Chonburi is well-prepared in every aspect, including its proximity to the capital, tourism, foreign investment, industrial estates, water transport, and operational airports. Recently, the government has introduced the mega project EEC (Eastern Economic Corridor), making investments in this area even more attractive.

Opportunities from the EEC (Eastern Economic Corridor)      

Since the world has entered the 4.0 economic system, many countries have become proactive and ready to adapt to globalization. Thailand is no exception, responding to development with numerous government policies. Currently, no project is as hot as the EEC, with a total project value from both private and government investments exceeding 1.5 trillion baht over the first five years, aiming to elevate Thailand into a full-fledged 4.0 industry. The strategic area covers three eastern provinces: Chachoengsao, Chonburi, and Rayong, enhancing Chonburi's potential in terms of economy, investment, and living standards through the strategy of "Modern of the East".

How does the EEC relate to Chonburi's development?

            The EEC project was initiated with the hope of making Thailand a World-Class Business Hub. The development plan consists of four sub-plans: industrial potential development, transportation and logistics development, urban development, and management. The most immediate project is the first five-year development plan (2017-2021) with an investment budget of over 1.5 trillion baht, comprising 15 projects focusing on transportation and logistics, such as high-speed rail, dual-track rail, motorways, and ports, as well as new industrial city development projects to boost the economy.

Chonburi is one of the development areas of the EEC, which aims to develop into "Modern of the East". It will be a hub for tourism combined with medical services and future industries with high growth potential (EEC of Digital Park: EECd). From January to September 2017, 147 investment projects were approved in the EEC area, with a total value of 109.116 billion baht, of which 84 projects worth 27.848 billion baht are located in Chonburi.

            The appeal of these investment projects partly lies in the promoted industries, which are considered the new growth engines of the economy (New-Growth Engine). These include five types of new digital industries (New S-Curve Digital Industry): hardware and component manufacturing, software production and services, digital data services, communication equipment and services, and digital service providers. The area will be established in Si Racha, covering over 500 rai, under the project name Digital Park Thailand or EECd, which is expected to create up to one hundred thousand digital professionals annually.

            With the development of transportation systems, including connections to three major airports (Don Mueang, Suvarnabhumi, and U-Tapao), dual-track rail and high-speed rail reducing transportation costs, and the presence of motorways facilitating travel, along with quality job opportunities, attracting skilled personnel both Thai and foreign is a natural outcome. This is especially true in cities with high concentrations of business and tourism like "Pattaya".

Chonburi: The Province with the Second Highest Number of Foreign Workers After Bangkok

            Apart from Bangkok, the province with the highest number of foreign workers is Chonburi. According to data on foreign labor authorized to work in Thailand, both general and investment promotion categories, there were a total of 151,931 foreign workers in 2017, with 87,099 in Bangkok, accounting for over 57%.

            Interestingly, Chonburi has the second highest number of quality foreign workers after Bangkok, with 10,870 individuals, representing 7%, more than other tourist cities like Phuket and Chiang Mai.

            For general labor, the top ten countries with the most workers in Thailand are Japan, China, India, England, South Korea, Taiwan, France, America, the Philippines, and Russia in that order. Most hold positions as legal advisors, senior civil servants, professionals in various fields, technicians, clerks, officers, and service staff.

For investment promotion labor, the top ten countries are Japan, China, India, Taiwan, South Korea, the Philippines, France, England, America, and Malaysia in that order, with most working as department managers, various technicians, architects, engineers, managing directors, senior executives, production managers, and operations managers.

Given the rapid development of Pattaya, TerraBKK Research views Pattaya as a city worth investing in, second only to Bangkok. For investors interested in condominium investments in a vacation-style setting, TerraBKK Research recommends "Pattaya" as the best tourist city for investment, with three main factors: proximity to Bangkok, competitive return rates comparable to CBD, and the number of tourists/workers in Pattaya who primarily rely on rentals, making "Pattaya" a top investment city compared to other similar tourist provinces.

1. Tourist Attractions Within 2 Hours Travel

            The first reason making Pattaya an attractive investment destination is its proximity to Bangkok, with travel time of less than 2 hours. Investors from Bangkok can easily travel to manage their properties or enjoy their own vacation home, unlike other provinces that are farther away. Even with a broker to help manage, as the property owner, one still needs to visit occasionally. Thus, travel convenience is indeed essential.

2. Returns Comparable to CBD in Bangkok

            To confirm the investment attractiveness, TerraBKK Research has collected data on rental condos in Pattaya, which can be divided into five zones:

Wong Amat or North Pattaya is filled with five-star hotels and less crowded tourist attractions, including high-end condominiums. This zone is the only one where second-hand condominiums exceed 100,000 baht per square meter, with average prices ranging from 70,000-130,000 baht per square meter and rental rates of 30,000-80,000 baht per month, yielding a rental yield of approximately 4-6% per year.

Central Pattaya stands out for its amenities, being the only zone packed with shopping and entertainment venues, such as Terminal Pattaya, Central Festival Pattaya, Index, King Power, and numerous chill restaurants, making it bustling with tourists, especially foreigners. We view condominiums in this zone as city condos; although not beachfront, they are not too far from the beach and are surrounded by comprehensive amenities. Thus, second-hand condominiums in this zone have an average price of 60,000-100,000 baht per square meter and rental rates of 20,000-55,000 baht per month, resulting in the highest rental yield compared to other zones at 4.5-9% per year.

Phratamnak is known for having the most beautiful viewpoints in Pattaya, offering both mountain and sea views. This zone is a quiet residential area with few tourist attractions or entertainment venues, and not many hotels or condominiums. Second-hand condominiums here are priced at around 50,000-80,000 baht per square meter, with rental rates of 15,000-45,000 baht per month, yielding a rental yield of approximately 4-6.7% per year.

Jomtien is famous for its delicious restaurants and is home to 3-4 star hotels, making it suitable for relaxation without heavy tourism or entertainment focus. Second-hand condominiums in this zone are priced lower than other areas in Pattaya, at around 45,000-70,000 baht per square meter, with rental rates of 14,000-27,000 baht per month, yielding a rental yield of approximately 6-8.3% per year.

Na Jomtien is the last zone, located next to Jomtien, which is quieter than the previous four zones and stands out for having a private beach, making it ideal for families seeking true relaxation. Consequently, accommodation and condominium prices are higher than in Jomtien, with second-hand condominiums priced at around 55,000-100,000 baht per square meter and rental rates of 30,000-55,000 baht per month, yielding a rental yield of approximately 4.0-7.2% per year.

           

               The overall graph provides a clearer picture of condominiums in Pattaya. For those with a limited budget of around 2-5 million baht, "Jomtien" is a good option for reasonably priced condominiums. However, for investors, "Central Pattaya" is the best choice for those looking for investment condominiums in Pattaya.

3. A Steady Influx of Tourists

            Chonburi is the third province with the highest number of foreign tourists, following Bangkok and Phuket, with a consistently high annual increase. Pattaya is the most popular tourist city, with statistics from the Ministry of Tourism and Sports indicating that in 2016, Chonburi welcomed 16.2 million tourists, comprising 35% Thai and 65% foreign visitors, generating tourism revenue of 206 billion baht, with foreign tourists contributing approximately 125 billion baht.

            Notably, Pattaya is the number one tourist destination generating revenue of 198 billion baht from over 13.6 million tourists, accounting for about 84% of all tourists in the province.

The Trend of "Pattaya" Among Chinese Tourists

            Thailand has seen a significant increase in popularity among Chinese tourists over the past 3-4 years, with the number of Chinese visitors doubling from 4.61 million in 2013 to 8.82 million in 2016. Over 36.7% of these tourists are young Chinese aged 25-34, and "Pattaya" has become a key destination for Chinese travelers, averaging 1.16 - 2.03 million visitors annually, accounting for one in four Chinese tourists visiting Thailand.

            The previous image of "Pattaya" being filled with Russian tourists has become a thing of the past, as the number of Russian visitors plummeted due to the Russian ruble crisis in 2015. This marked a significant turning point in analyzing the tourist demographics in Pattaya. In 2016, the number of Chinese tourists surged to become the largest group in Pattaya, accounting for 31.3% or 2.54 million people, up from 18% or 1.09 million in 2014, and 28.7% or 1.86 million in 2015, far surpassing other nationalities, which remained in the hundreds of thousands.

            Looking at the tourism statistics for Pattaya in 2016, it was found that foreign tourists in Pattaya have been spending increasingly more, averaging 7% - 10.5% annually, currently averaging 4,725 baht per person per day, with one-third of this being accommodation costs, averaging 1,540 baht per night. The overall occupancy rate for accommodations in Pattaya has remained steady at an average of 73.5%.

            However, beyond tourism, Chinese investors have shown a keen interest in investing in real estate in Thailand, with a 114% year-on-year increase in 2017. According to Juwai.com, a major Chinese real estate media outlet, over 60% of wealthy Chinese investors plan to invest in real estate outside of China within three years. In 2017, "Thailand" was the number one target for Chinese real estate investment in Southeast Asia and ranked third globally, following the USA and Australia, among 90 countries. When comparing cities in Asia, Pattaya has been the top choice for Chinese real estate investment for two consecutive years, in 2016 and 2017. This is because Chinese investors view Pattaya as a lifestyle investment, a second home not far from China, suitable for both holiday relaxation and retirement living. They also perceive Thailand's medical services as world-class, making it comfortable for aging societies.

In addition to the various reasons we have discussed to affirm the investment potential in Pattaya, what remains to be seen is how Pattaya will take a new step as a tourism hub and benefit from the EEC development, transforming Pattaya into a different place. The investment and rental markets will be more vibrant than ever, especially in the future when government and private sector developments are completed.

Article by: TerraBKK Investment Tips

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