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Thai investment applications top $25 billion in 2019

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BANGKOK (Reuters) – Investment applications in Thailand reached a total 756 billion baht ($25.07 billion) worth of projects in 2019, down about 16% from the previous year but slightly beating a target, the state investment agency said on Monday.

The agency targeted 750 billion baht in investment pledges last year, down from 902 billion baht recorded in 2018.

In 2019, Thai and foreign firms submitted 1,624 projects in Southeast Asia’s second-largest economy, the Board of Investment (BOI) said in a statement.

Of those, about 445 billion baht of planned projects was for the Eastern Economic Corridor, a centerpiece of the government’s policy to spur growth and attract hi-tech industries such as robotics and aviation.

Last year, China beat Japan for the first time as Thailand’s top foreign investor, as firms relocated production due to the U.S.-China trade war, Deputy Prime Minister Somkid Jatusripitak told reporters.

“That’s because costs in China are higher,” he said, adding China’s planned projects were worth 260 billion baht, far above Japan’s 73 billion baht.

Last year, the government launched a relocation package, including tax incentives and special investment zones, to draw foreign firms seeking to escape the trade war.

Somkid said he had asked the BOI and the finance ministry to consider further measures to spur investment over the next six months because private investment had remained low.

The BOI is expected to meet again early next month and offer an investment target for 2020 as it is assessing economic conditions, agency head Duangjai Asawachintachit said.

Thailand’s growth has lagged most regional peers for years. The central bank has projected growth of 2.8% this year after a five-year low of 2.5% in 2019.

(Reporting by Kitiphong Thaichareon; Writing by Orathai Sriring; Editing by Anil D’Silva)

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CBRE predicts record $50 billion investment for commercial real estate this year – Times Colonist

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TORONTO — Canada could see a record-breaking $50-billion worth of investment in commercial real estate this year as economic tailwinds and immigration policies support the booming sector, according to a report by CBRE, but it says the strong economy is also creating challenges of affordability and supply.

The commercial real estate services firm said Tuesday that total investment would be about $5 billion higher than 2019 and about a billion dollars higher than the record set in 2018.

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Growth comes even amid low vacancies in major markets as tech companies in particular continue to prize downtown locations. Other strong areas include investments in rental apartments as home affordability gets out of reach for many Canadians, and industrial growth driven by e-commerce demand for logistics centres.

“Canada has so many advantages, and so many underlying fundamentals that are positives over the long-term, that we certainly think that growth in the Canadian commercial real estate market is going to continue,” said CBRE Canada vice-chairman Paul Morassutti.

Those trends, along with strong population growth and stable banking and governance, would help steer the sector if a recession hits, said Morassutti.

“The wild card is a recession. My feeling is we’re very well positioned to weather a recession, and I think we’ll continue to flourish after that because of those attributes.”

Heightened interest in the market is also creating challenges, including rising rents and limited office and industrial space, while climate change is creating its own issues.

CBRE says prime office rents jumped 20.9 per cent in Vancouver between 2018 and 2019, 14.2 per cent in Montreal, and 10.1 per cent in Toronto, while national industrial rents rose by 12.3 per cent between the two years for the largest increase on record.

Rents still form a small portion of company budgets and don’t seem to be a major constraint on growth yet, said Morassutti. He noted that in the industrial sector, costs savings in transportation from better locations more than offset costs from higher rents.

Rental rates for apartments are also climbing in major centres as home ownership becomes more expensive, which has helped drive investment in the multifamily. The sector could see about $11.9 billion in investment this year, up from $8.3 billion in 2018, to see the most of any commercial sector, CBRE expects.

The upward trend in residential rental rates is however putting pressure on income inequality, said Morassutti.

“Partially because of that lack of home affordability, you have all these people becoming renters, so on the one hand that’s a good thing. On the other hand, it’s not great for society that our two major cities are becoming unaffordable, it’s not great for the income divide, which is already a large social issue.”

Along with affordability, CBRE says the lack of investment in transit infrastructure, and increasing pressures of climate change on the construction sector and land values are also structural issues of concern for the year ahead.

More immediately, the impacts of the coronavirus outbreak also loom as a big unknown, but could be short-lived if it is contained, said Richard Barkham, global chief economist at CBRE said in a statement.

“If the coronavirus outbreak is relatively contained sometime in March, impacts on the Canadian economy and most commercial real estate sectors will be noticeable in the near term but less substantive over the year.”

He noted that short-term impacts would largely hit the hotel and retail sectors. He said the global property market should be able to weather the effects of the virus as anticipated today, but that a clearer picture of the epidemic should materialize sometime in March.

This report by The Canadian Press was first published Feb. 25, 2020.

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Unstable climate policy creating energy investment uncertain – CityNews

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Provincial investment in oil and gas may be needed in changing investment climate, Kenney says – CBC.ca

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The Alberta government may set up a publicly traded corporation or agency to invest in oil and gas projects, similar to the Alberta Energy Company that helped kickstart the oilsands in the 1970s, Premier Jason Kenney says.

A growing number of international investors have been shying away from the oilsands, citing concerns about climate change. 

On Sunday, Vancouver-based Teck Resources withdrew its application for an oilsands project, citing concerns about the inability of federal and provincial governments to balance concerns about climate change with oil and gas development. 

At a news conference in Edmonton on Tuesday, Kenney said the time may have come for the government to finance such projects on its own.

The AEC, announced by former premier Peter Lougheed in 1973, joined with Syncrude to start oilsands development, Kenney said, at a time when it was difficult to access capital.

“It may be necessary again,” the premier said. “This province will not be shut down. We will not leave in the ground assets that represent ten trillion dollars of value on global markets. We will not be the only of the major energy producers in the world to choose poverty over prosperity.” 

The government has been working on what Kenney described as an “essential major project.” Details will be released soon, he said. 

He suggested shares in the new corporation could also be offered to the public.

“I think public participation is a great idea, and I think Albertans are smart, they’re patriotic, they understand that’s there’s great value in these resources,” he said. 

The Alberta legislature starts its spring session on Tuesday with a speech from the throne. The government will introduce the 2020-21 budget on Thursday.

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