BANGKOK, 31 May 2022: Property consultant JLL expects hotel investment activity in Chiang Mai to rise this year.
While significant assets have been put up for sale, investor sentiment is improving in response to a more positive outlook for Thailand’s post-lockdown tourism.
JLL’s Hotels & Hospitality Group – Asia executive vice president Chakkrit Chakrabandhu Na Ayudhya said: “Chiang Mai has been one of the most dynamic tourism markets in Thailand. International arrivals to the city during a pre-Covid period were ranked number 4 after Bangkok, Phuket and Pattaya. With the continued ease of travel restrictions across the region and Thailand, optimism is now growing. The market has recently seen a number of new openings and completions of major renovation projects such as Melia Chiang Mai having opened early this year, and InterContinental Chiang Mai Mae Ping, scheduled for opening by the year-end.”
Chiang Mai is also one of the top hotel markets in Thailand that see continued demand from both foreign and domestic investors. However, investment activity in the city was generally lower compared to other major hotel markets, largely due to the lack of investment-grade assets that were put up for sale, according to JLL.
“We expect the Chiang Mai hotel market to witness higher investment activity this year as there are a number of significant hotel assets being put up in the market,” said Chakkrit.
One of the most notable disposals being marketed by JLL is Dhara Dhevi Chiang Mai Resort, recently won at the auction by Inter Far East Thermal Power Company Limited.
Situated on over 150 rai of land, a 15-minute drive from Chiang Mai International Airport, the 123-key resort is one of Thailand’s most luxurious hospitality developments and was operated as the Mandarin Oriental from 2004 to 2013. Due to the Covid-19 pandemic, the award-winning hotel temporarily ceased its operation in April 2020.
Inter Far East Thermal Power CEO Thavich Taychanavakul said: “Our decision to dispose of Dhara Dhevi Chiang Mai is aligned to our strategy to divest non-core businesses. Advice from JLL suggests that this is a suitable time as the more positive outlook of Thailand’s tourism is putting Dhara Dhevi Chiang Mai in a position to attract well-capitalised investors looking to invest in a trophy hotel asset in Thailand.”
According to JLL, Chiang Mai saw only one hotel sale transaction worth THB 85 million in 2018, recording no hotel investment activity in 2019 and 2020. Last year one hotel investment transaction worth approximately THB300 million was recorded.
So far this year, the city has seen one hotel investment deal worth THB 435 million that is close to completion.