2018曼谷房地产市场展望（英文版）_25页_4mb

2018 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK: BANGKOK

Core Content Summary

Economic Growth and Market Conditions

• Economic Recovery: Thailand's economy showed positive growth in 2017, with a GDP increase of 3.9% Y-o-Y, driven by strong export performance (9.9% Y-o-Y) and tourism growth (8.6% Y-o-Y).
• Tourism Impact: Tourism accounted for 20% of Thailand's GDP. In 2017, 35.4 million tourists arrived, and 2018 is expected to see total tourism revenue reach 2.7 trillion baht, or 20% of GDP.
• Export Growth: Export growth in 2017 was the highest in six years, exceeding global export growth. The government expects continued export growth of 6–6.5% in 2018.

Property Market Trends

• Residential Market:

  • Foreign Capital Influx: Thai developers are increasingly forming joint ventures with foreign partners, especially Japanese, to secure funding. This trend is expected to continue.
  • Condominium Sales: Condominium prices and office rents reached record highs in 2017. The luxury downtown market is still dominated by Thai buyers, though prices are rising.
  • Midtown/Suburban Recovery: There were signs of recovery in midtown and suburban markets in Q4 2017, with 64,000 new units launched in 2017. Banks eased mortgage lending, which should support buyer confidence and inventory clearance.
  • Diversification: Developers are expanding into income-producing properties like offices, hotels, and retail, and exploring new locations due to rising land prices and scarcity of prime downtown sites.

• Office Market:

  • Stable Demand: Office demand remained steady in 2017, with 200,000 sq.m. of space leased annually. Vacancy rates were below 8%, and rents rose 4–5% Y-o-Y.
  • Prime Locations: CBD office spaces near mass transit stations saw rising rents. Gaysorn Tower and Park Ventures became the most expensive office buildings in Bangkok, with rental rates exceeding THB 1,000 per sq.m. per month.
  • Workplace Strategy: Tenants are adopting cost-saving strategies like co-working spaces and "360 workplace" models to reduce space and fit-out costs. CBRE expects more co-working space operators to enter the market in 2018.
  • Future Outlook: New supply is expected to be less than demand, keeping vacancy rates low and rents rising slowly. However, if more projects start in 2018, the market could change after 2020.

• Retail Market:

  • E-Commerce Impact: The retail sector faces challenges from e-commerce, which now accounts for 9.86% of total retail sales in 2017. Retail landlords are focusing on creating unique in-store experiences to compete.
  • New Supply: New retail supply is expected to increase significantly in 2018, with nearly 500,000 sq.m. of net letable area under construction. Major projects like ICONSIAM and the second IKEA are set for completion.
  • Omni-Channel Retail: Retailers are adopting omni-channel strategies, combining online and offline sales, which may reduce the need for physical space.

• Industrial & Logistics Sector:

  • E-Commerce Growth: The rise of e-commerce is driving demand for modern logistics properties. CBRE expects this trend to continue as Thailand improves its infrastructure.
  • FDI Inflow: FDI in manufacturing rose by 6.8% Y-o-Y in 2017, with nearly 40% coming from Japan and Taiwan. The car industry is a key driver for industrial demand.
  • Serviced Industrial Land Plot (SILP): SILP sales increased by 35.2% Y-o-Y in 2017. However, Ready-Built Factories (RBF) remain underutilized with high vacancy rates (nearly 30%) and flat rents.

• Land Market:

  • Land Price Surge: Land prices in prime downtown areas rose sharply, with some reaching record levels. The biggest land sale in Thai history was the British Embassy site acquisition by CPN/Hongkong Land.
  • Land Tax Delay: The proposed new land tax targeting unutilized land was postponed, with no finalized details or effective date.

Investment and Development Trends

• Joint Ventures: Developers are forming joint ventures with foreign partners to access capital and expand their reach. Chinese buyers are a key focus for condominium marketing.
• Diversification: Developers are diversifying into multiple property classes (residential, commercial, industrial) to ensure multiple revenue streams.
• Infrastructure Impact: The development of mass transit lines, such as the MRT Orange and Pink Lines, is creating new residential and commercial opportunities in previously less attractive areas of Bangkok.

Key Opportunities

• Economic Growth: Continued GDP growth and rising consumer confidence are expected to boost demand across all property sectors.
• Tourism and Hospitality: Tourism growth supports the hospitality and retail sectors.
• Infrastructure Expansion: Government projects like Thailand 4.0 and the Eastern Economic Corridor (EEC) are expected to drive property development.
• Mortgage Easing: Banks are easing mortgage lending criteria, which should increase buyer access to financing.
• Foreign Investment: Increased foreign investment in joint ventures and co-working spaces presents new opportunities.
• Technology Adoption: Property companies are increasingly using new technologies to enhance operations and tenant experience.

Key Risks

• Overpriced Land: High land prices in prime locations may make developments unfeasible.
• Affordability Issues: The mass residential market may face affordability challenges.
• Oversupply Risk: If too many new developments proceed simultaneously, certain sectors could face oversupply.
• Political Uncertainty: Upcoming elections may create political uncertainty.
• Tax Policy Uncertainty: The lack of clarity on new tax policies poses a risk.
• Interest Rate Increases: Possible rises in interest rates could affect financing and investment.

Conclusion

The 2018 Thai property market is expected to continue its growth trajectory, supported by economic recovery, tourism, and infrastructure development. Developers are increasingly diversifying their portfolios and forming joint ventures with foreign partners. While the luxury downtown market remains strong, midtown and suburban areas are slowly recovering. The office and retail sectors are adapting to new trends like co-working spaces and omni-channel retail, while the industrial and logistics sectors benefit from e-commerce growth. However, challenges such as high land prices, affordability, and political uncertainty remain. Overall, the market is poised for continued development, with a focus on innovation and diversification.