BANGKOK — Thai property companies are branching out into selling digital goods within virtual metaverses, an emerging industry fueled by one of the most connected populations on the planet.
But it’s unclear just how big a real estate business that only exists in cyberspace will be.
Property Perfect is initially looking to host virtual glimpses of real-world sites in a metaverse by 2024. The project includes the company’s luxury accommodations near resort areas such as Khao Yai National Park in the north- east of Thailand.
Potential customers will take virtual tours of homes via avatars. Seasonal landscapes can be changed at the touch of a button.
But by 2027, Property Perfect intends to sell exclusive buildings and land to the Metaverse. The company will market it to department stores, universities, and even businesses looking for virtual office space for telecommuting.
Last year, Property Perfect’s revenue totaled 11.6 billion baht ($334 million). The developer wants metaverse real estate 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 skills, 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. Data stored in NFTs is virtually impervious to tampering or replication, meaning digital property can generate the same value as physical real estate. Owners can sell or rent virtual goods to third parties.
Thailand prohibits foreigners from buying land, but no such law covers the metaverse. Real estate companies here have the opportunity to expand their customer base beyond a market made up mainly of Thai citizens.
The world’s leading metaverse games settle payments using cryptocurrencies. These virtual currencies are also able to become common in Thailand.
Metaverse Thailand has been operating a virtual version of downtown Bangkok since October. Last month, the platform began allowing the use of cryptocurrency invented by Bitkub, Thailand’s largest crypto exchange, to trade virtual land.
In Thailand, 20% of internet users between the ages of 16 and 64 own some form of cryptocurrency, according to a January report by Singapore’s DataReportal. This is the highest share in the world.
The average Thai spends nine hours and six minutes on the internet a day, the seventh longest among the nations. All of this suggests that Thailand has plenty of room for growth in the metaverse realm.
This new sector attracts players from all industries. Cafe chain Class Coffee launched the Velaverse metaverse in February. The community models the central part of Nakhon Ratchasima province in northeast Thailand. Around 30,000 virtual lots are available, each selling for 300 baht.
Thai metaverse designer Brandverse has partnered with more than 50 companies and brands such as mall developer Central Pattana and convenience store chain Seven-Eleven to collaborate on metaverse business operations, including asset sales digital and the holding of virtual events.
But a risk in the field is that a large percentage of virtual currency owners hold the assets for investment purposes only. Speculative purchases of land in the metaverse could take precedence over actual demand.
The value of virtual land in The Sandbox metaverse exploded by a factor of 300 between January 2019 and January 2022, according to a study by Thailand’s central bank and Chulalongkorn University.
“Vague expectations for the metaverse are pushing prices up,” said Kanis Saengchote, associate professor at Chulalongkorn University. Kanis adds this warning to investors: “We are still researching what the real values are, and several uncertainties remain.”
Even replication-proof NFTs do not address the risk of metaverse communities becoming oversaturated, driving down the prices of virtual land and buildings. The success of a metaverse will likely depend on how many online residents it attracts.