KBank Private Banking Thrives with Real Estate Advisory Services

Aiming for 5-6% Returns from Investments through Land Loan for Investment

 

KBank Private Banking has revealed that high-net-worth clients are increasingly interested in real estate advisory services, particularly the Land Loan for Investment. This tool helps manage liquidity and enhance returns from property portfolios, which often do not generate current income. Currently, over 100 clients are participating in the program, with an average return target of 5-6% this year, alongside comprehensive service offerings that include land portfolio studies and land utilization.

Ms. Korakot Attasukulchai, Executive Director, Head of Non-Capital Market Solutions, Private Banking Group at Kasikornbank, stated that last year, the real estate advisory service was one of the fastest-growing services in the bank's private banking sector. Clients recognize the importance of leveraging real estate, a significant asset that has appreciated in value but does not generate cash flow. Additionally, clients need to plan for land and building tax expenses that have already begun to be collected. In 2020, the private banking division served 121 high-net-worth clients, covering a total of 2,500 land plots, providing a variety of comprehensive services including tax consulting, utilization, and real estate investment.

Land Loan for Investment is a product that high-net-worth clients are very interested in, with over 100 clients already applying for loans to invest with KBank Private Banking, amounting to over 10 billion baht in credit. Most of the land is located in Bangkok and its vicinity, with increasing interest in major provincial cities towards the end of last year. This year, the Land Loan for Investment product is expected to continue growing, as over 90% of clients' real estate portfolios consist of undeveloped land or land not yet ready for development. Furthermore, interest rates are likely to remain low until the Thai economy recovers in the next 2-3 years, presenting investment opportunities that encourage clients to seek new investment avenues, particularly converting illiquid assets like land into investments for superior returns.

For investments aimed at maximizing the benefits of owned land, KBank Private Banking recommends clients diversify their investments across various assets to mitigate risks. This includes investing in funds that manage risk while providing long-term returns, alongside funds in high-growth themes such as technology, health, climate change, and Asia, particularly China. Additionally, clients are advised to invest in sectors benefiting from the transition to a New Economy, such as technology and alternative energy, while also incorporating cyclical sectors like energy, banking, and retail.

According to a survey of high-net-worth individuals in Thailand conducted by Lombard Odier, a strategic partner of KBank Private Banking, having special services beyond investment offerings significantly influences clients' decisions to choose banking services. The positive feedback on real estate advisory services reflects clients' strong interest. The Land Loan for Investment represents the bank's commitment to creating products that help clients manage risks and alleviate concerns regarding asset management, especially for clients holding high-value land and needing tax management.

Amid increasing risks, real estate advisory services are not just an additional offering from KBank Private Banking but are also a crucial aspect of wealth management in today's era. This year, we aim to provide real estate advisory services to at least 200 families, targeting an average additional return of about 5-6% from real estate, which is an asset that does not generate income through the Land Loan for Investment product. We are confident that this will be a key tool enabling investors to achieve superior returns and succeed in all market conditions in the long term.