There’s been a tremendous uproar in Thailand’s real estate market over the last five years. Almost 300,000 new condos have been launched and 1.3 million square meters of retail spaces have opened. Not to mention growth in the hospitality and logistics sectors.
In 2018, the primary drivers of the growth cycle are changing while creating new challenges for the leading players. According to the latest research it is found that “Rapidly rising land costs continue to represent a significant challenge for the market today. The recent annual increases around the market of 10-15% per year are pushing developers in new directions.”
Therefore, it is no longer feasible to obtain a new freehold land in the city center for office, retail uses or hospitality, particularly when there are only a few exceptions. Investors are thus seeking opportunities to secure leases for hospitality development and new commercial.
He explained that while the trend of the residential developers moving to highly priced products targeting both the local and foreign buyers, the most prolific growth strategy adopted by local players is moving into a Joint Venture partnership in a lot of cases with foreign investors.
The total value of Joint Venture investment has outdid THB 570 billion since 2013. Getting involved into such partnerships let both the parties to mutually benefit by dividing risk and by sharing technical resources and knowledge. Also, there has been a wave of new merger and acquisition activity in the present year.
Besides, so many leading local residential developers are actively sourcing new opportunities in the non-core market sectors. Several hospitality projects entered both the serviced apartments and office markets. Some bold market leaders made strategic inroads in technology as well as lifestyle brands. In the last few years many initiatives have been taken, such as establishing supportive ecosystems and corporate venture capital teams that aimed at development of “proptech” start-ups plus investment in the complementary lifestyle products.
Condominium Market in Bangkok
Bangkok’s condo market will continue to face challenges as well as heightening competition. The developers will require exercising caution while securing new development sites to ensure that the product, positioning of new project and product is customized to specific target demographics.
Office Market in Bangkok
You will be surprised to know that out of 240,000sqm of new for-lease space; more than one-third of the space has been pre-leased already. It is expected that the leasing efforts will continue to be successful as the majority of the projects are well situated and of good quality. There has been quite a number of new office project announcements in the pipeline for 2019.
Hospitality Market in Thailand
The country welcomed 35 million or more international tourists in 2017 and about half of these visitors carving their way through Bangkok. With almost 4,000 keys of new supply are scheduled for completion in 2018. As for future, a continued strong performance is expected in every segment.
