BANGKOK — Thai real estate companies are shifting into selling digital property within virtual metaverses, an emerging sector fueled by one of the most online demographics in the world.
But how big a real estate business that exists purely in cyberspace will become is unclear.
Property Perfect initially intends to host virtual previews of real-world locations in a Metaverse by 2024. The project includes the company’s luxury homes near resort areas such as Khao Yai National Park in northeast Thailand.
Potential customers will take virtual tours of the houses via avatars. Seasonal landscapes can be changed at the touch of a button.
But by 2027, Property Perfect intends to sell Metaverse-exclusive buildings and lots. The company will market this to department stores, universities and even corporations looking for virtual office space for teleworking.
Property Perfect’s revenue totaled 11.6 billion baht ($334 million) last year. The developer wants Metaverse properties to make up 20% of its revenue by 2027.
Rival real estate company Magnolia Quality Development is building a virtual city called Translucia with Thai animation production company T&B Media Global. The buildings will use T&B’s animation capabilities, while Magnolia will sell the digital structures. The project is expected to cost more than 10 billion baht.
Non-fungible tokens, or NFTs, are key to developing metaverses. The data registered in NFTs is nearly immune to forgery or replication, meaning digital property can generate the same value as physical real estate. Owners can sell or rent virtual property to third parties.
Thailand prohibits foreigners from buying land, but no such laws cover the metaverse. Real estate companies have an opportunity here to expand their client base beyond a market made up primarily of Thai citizens.
Major global Metaverse games process payments using cryptocurrencies. Such virtual currencies are capable of becoming mainstream in Thailand as well.
Metaverse Thailand has been running a virtual version of downtown Bangkok since October. Last month, the platform started allowing the cryptocurrency minted by Bitkub, Thailand’s largest crypto exchange, for virtual land trading.
In Thailand, 20% of internet users aged 16 to 64 own some form of cryptocurrency, according to a report released in January by Singapore-based DataReportal. This is the highest proportion worldwide.
The average Thai spends nine hours and six minutes online every day, the seventh longest of any nation. This all suggests that Thailand has a lot of room for growth in the Metaverse business.
This new sector attracts players from all industries. Coffee shop chain Class Coffee launched the Velaverse Metaverse in February. The municipality models the central part of Nakhon Ratchasima Province in northeastern Thailand. About 30,000 virtual plots are available, each selling for 300 baht.
Thai Metaverse designer Brandverse has partnered with over 50 companies and brands including mall developer Central Pattana and convenience store chain Seven-Eleven to collaborate on Metaverse business operations, including selling digital assets and running virtual events .
One risk in this space, however, is that a large percentage of virtual currency owners hold the assets solely for investment purposes. Speculative Metaverse land purchases could take precedence over actual demand.
The virtual property value in The Sandbox metaverse exploded by a factor of 300 between January 2019 and January 2022, according to a study by the Central Bank of Thailand and Chulalongkorn University.
“Hague expectations of the metaverse are driving prices up,” said Kanis Saengchote, associate professor at Chulalongkorn University. Kanis adds this warning to investors: “We are still investigating what the actual values are and some uncertainties remain.”
Even replication-safe NFTs do not solve the risk of metaverse community saturation, which would drive down virtual land and building prices. The success of a metaverse will likely depend on how many online residents it attracts.
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