REAL ESTATE 2018 ASIA PACIFIC - CBRE Thailand
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CBRE RESEARCH
2 0 1 8 A S I A PA C I F I C
R E A L E S TAT E
MARKET
O U T LO O K
TABL E OF CONTENT
04 06
EXECUTIVE SUMMARY ECONOMIC OUTLOOK
25
08 12
OFFICE SECTOR
RESIDENTIAL SECTOR OFFICE SECTOR
16 19
RETAIL SECTOR INDUSTRIAL &
LOGISTICS SECTOR
22 25
CAPITAL MARKETS RISKS & OPPORTUNITIES
© 2018 CBRE, Inc. 2018 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK | BANGKOK CBRE RESEARCH
2
EXECUTIVE SUMMARY
The new year has started with a mood of DEMAND CONTINUES FOR PRIME
optimism for the Thai economy lifted by an SITES
upbeat global outlook.
Demand for prime sites has remained strong
Developers are competing fiercely for prime with developers continuing to acquire sites
development sites, driving up prices to record both for condominium and rental income
levels and both condominium prices and office producing office, hotel and retail
rents are at record highs. developments.
EXPORTS AND TOURISM: MAIN Central business district (CBD) land prices will
CONTRIBUTION TO THAI ECONOMY continue to increase in the most prime
locations near mass transit stations.
The Thai economy is picking up with growth in
exports and tourism. Thailand finished last We have already seen the biggest land sale in
year with 3.9% Y-o-Y gross domestic product Thai history with the acquisition of the British
(GDP) growth, resulting from a significant Embassy site by the CPN/Hongkong Land joint
increase of 9.9% in exports to all major venture and a record price paid for a
markets. development site on Soi Langsuan by SC Asset.
The tourism sector, accounting for 20% of the Developers are starting to diversify with
country’s GDP, saw a record 35.4 million residential condominium developers looking at
arrivals in 2017 with further growth predicted moving into income producing office, retail
for 2018. and hotel properties.
LOCAL DEVELOPERS FORM JOINT The scarcity of prime, CBD freehold sites will
VENTURES WITH FOREIGN drive prices up.
PARTNERS
STEADY DEMAND FOR OFFICES BUT
Thai banks are being conservative about new TENANTS START TO LOOK AT
project lending to developers and so Thai ALTERNATIVE WORKPLACE
developers are seeking funding from foreign SOLUTIONS
partners. Most joint ventures to date have been
with Japanese investors on a project-by-project CBRE expects steady office demand of 200,000
basis for condominiums. sq.m. per year for the next few years, but does
not expect a sudden jump in demand, so new
CBRE is now also seeing investors from other supply of less than 200,000 sq.m. in 2018 will
countries such as Hong Kong, Singapore and mean that vacancy will remain low and rents
China. Although earlier joint ventures started will continue to rise, but at a slower rate.
with condominium development, we expect
new investment in both condominium and
income producing properties.
© 2018 CBRE, Inc. 2018 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK | BANGKOK CBRE RESEARCH
4
EXECUTIVE SUMMARY
As rents rise, office tenants will seek to reduce 100,000 square metres in 2017, increasing
occupation costs by applying workplace competition among retail centres to attract
strategies so they can put more people in less customers.
space.
Retailers and retail landlords will have to adapt
Changes in international accounting rules by creating unique experiences that cannot be
where leases now have to be accounted for on replicated online.
the balance sheet and the desire not to pay for
the capital cost of fit-out and have no long-term Retailers will also become omni-channel with a
commitments will lead some multinationals to mixture of online and offline sales which could
choose renting by the desk in co-working mean they need less space.
space, rather than leasing and fitting out
traditional offices. E-COMMERCE DRIVES DEMAND FOR
MODERN LOGISTICS
Four international co-working space operators
will open their first locations in office buildings The growth in e-commerce will lead to
in Bangkok’s CBD this year. CBRE expects they increased demand for all forms of modern
will continue to expand in 2018. logistics properties.
RETAIL LANDLORDS TO CREATE Export growth in manufactured goods could be
NEW EXPERIENCES the catalyst for a recovery in serviced industrial
land plot sales and ready-built factory rentals.
The contest between “bricks versus clicks”, Infrastructure improvements under the
with the disruptive effect of e-commerce on Government’s Thailand 4.0 and Eastern
traditional retail formats, will start to be felt in Economic Corridor (EEC) policies should make
Thailand in 2018. Thailand a more attractive destination for local
and foreign investment in manufacturing, but
CBRE predicts that the vacancy rate of 5% will much of this improvement will only come
fall as renovations are completed on existing when the infrastructure is completed.
shopping centres. New supply will be about
300,000 square metres in 2018, compared to
Fierce competition for prime development site, driving
up prices to record levels.
© 2018 CBRE, Inc. 2018 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK | BANGKOK CBRE RESEARCH
5
ECONOMIC OUTLOOK
ECO NO MIC OU TLOOK
ECONOMIC GROWTH IS PICKING UP
WITH EXPORTS AND TOURISM
Thailand’s economic growth is gradually 2017 was a strong year for exports with
improving, and the Bank of Thailand has estimated full year growth at 9.9%, the highest
forecasted that GDP growth will reach near 4% in six years and exceeding overall global export
in 2018. Thailand’s rapid increase in tourist growth of 8.6%. The Commence Ministry
arrivals, export growth and infrastructure expects export growth to increase by 6 - 6.5%
developments are continuing to drive the this year.
economy.
CBRE Research expects to see a recovery in
Thailand had 35.3 million tourist arrivals in consumer confidence and spending which will
2017, a record number with 8.6% growth Y-o-Y. be positive for the property markets.
In 2018, the total revenue from both
international and domestic tourist arrivals is
expected to be at 2.7 trillion baht or 20% of the
country’s GDP.
© 2018 CBRE, Inc. 2018 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK | BANGKOK CBRE RESEARCH
7
RESIDENTIAL SECTOR
RESIDENTIAL SECTOR
FOREIGN CAPITAL INFLUX
HIGHER FOREIGN CAPITAL INFLOW There have also been greater efforts by
developers to market Bangkok condominiums
Raising capital through collaboration with offshore with much emphasis on Chinese
foreign partners has now become the new buyers. Thailand, unlike Hong Kong, Singapore
standard as local developers seek bigger war and Australia, does not have special stamp
chests for new development because Thai duties for foreign purchasers, but it is very
banks have become more cautious about difficult for foreign buyers to obtain a loan to
project lending. Joint ventures have allowed fund a purchase of property in Thailand. The
younger developers like Ananda Development Chinese government has also made it clear that
and Origin Property to replicate the growth it wants to discourage Chinese nationals from
accomplished by their bigger competitors. buying overseas properties by implementing
Foreign investors are also seeing this need for even tougher capital control policies.
capital to penetrate the Thai market.
Thai buyers still accounted for more than 75%
Unless banks relax their project financing of transactions for new luxury downtown
criteria, CBRE Research believes this trend will Bangkok condominium properties based on
continue. With most of the top publicly listed sales by CBRE in 2017.
developers already having one partner or more,
it will be interesting to see who will be next in
line for a foreign partnership.
© 2018 CBRE, Inc. 2018 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK | BANGKOK CBRE RESEARCH
9
RESIDENTIAL SECTOR
The Bangkok luxury condominium market will midtown/suburban areas to make way for
continue to be dominated by Thai purchasers. newer developments.
The performance of the downtown luxury
market will depend on Thai buyer’s willingness However, there continues to be a great disparity
to pay the increasing asking prices. between the downtown and midtown/suburban
markets. The midtown/suburban markets still
STEADY LUXURY MARKET WITH faces challenges in clearing off unsold
MID-MARKET SLOWLY REGAINING inventory whereas there is little unsold
PACE inventory in the downtown area.
In Q4 2017, CBRE Research started to witness Most downtown projects will continue to
signs of recovery in the midtown/suburban achieve record prices, but not every developer
markets after three consecutive years of decline hoping to achieve more than THB 300,000 per
in the number of sales and new launches. sq.m. will be successful.
This is also reflected by the Consumer The midtown/suburban markets will see mixed
Confidence Index (CCI), which rose for six performance. Successful projects will either be
straight months since August 2017 to January in locations closer to CBD, existing/under
2018. The index showed that consumers were construction mass-transit lines or in locations
more positive about the economy and felt more with limited existing supply.
confident to spend money. Developers have
responded quickly with 64,000 new Rapidly rising land prices and scarcity of
condominium units launched at all price freehold land in prime downtown locations
ranges and locations in 2017, compared to have forced developers to explore and reach out
55,000 units in 2016. to new locations and unexploited land plots for
development opportunities.
CBRE Research believes that the outlook for
the end-user driven residential market will be Residential developers will continue to
brighter in 2018. Banks have eased lending diversify their investments into other property
criteria on mortgage loans, which should classes or new customer segments. Relying on
increase the buyer’s ability to borrow money only one market will be too risky in this
and access to mortgage finance. This should increasingly competitive environment.
help clear up unsold inventory in the
Figure 1: Newly Launched Condominium Units in Bangkok
No. of Units Midtown/Suburban Areas Downtown Area
100,000
80,000
60,000
40,000
20,000
2011 2012 2013 2014 2015 2016 2017
Source: CBRE Research
© 2018 CBRE, Inc. 2018 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK | BANGKOK CBRE RESEARCH
10RESIDENTIAL SECTOR
EXPAT ALLOWANCES CONTINUE TO NEW MASS TRANSIT LINES OPEN
LIMIT RENTAL GROWTH OF NEW DEVELOPMENT AREAS FOR
APARTMENTS AND SERVICED HOUSING PROJECTS
APARTMENTS
The demand for housing will recover due to the
Lump sum monthly rentals will remain increase in new mortgage lending up by 20% in
unchanged as expatriates’ housing allowances Q3 2017, the latest data available from the Real
have not increased in over a decade and the Estate Information Center (REIC). The increase
growth in the number of expatriates is expected in the mortgage lending will support sales of
to be flat in 2018. However, occupancy for both housing units. This will give developers
sole-ownership apartments and serviced confidence, allowing them to launch more
apartments is expected to remain healthy at housing projects in line with the recovery of
above 95% and 80%, respectively, due to demand.
limited supply.
On the developer’s side, banks will continue to
Demand for apartments in Bangkok mainly be conservative about project lending which
comes from foreign expatriates. Due to the may reduce the new supply from small
limited supply, the competition will continue developers.
to come from condominium units for rent.
However, expatriate tenants prefer sole- Future infrastructure development, especially
ownership apartments over multi-ownership the mass transit lines, will spur residential
condominiums because of the availability and development in more areas of the city. The
convenience of maintenance services. development of the MRT Orange Line and Pink
Line will increase the attractiveness of the
The serviced apartment market is driven by two Northeastern part of Bangkok as a residential
groups: the long-term market which is driven area. However, home buyers will only decide to
by expatriate employees, especially Japanese, buy when they see significant progress of the
and the daily rate business which is driven by construction of this infrastructure.
tourists and business travelers. Serviced
apartment operators cannot rely only on the Housing supply is going to increase in the
long-term market. outers areas of Bangkok due to the increasing
land price in central and midtown Bangkok.
CBRE has seen a growing number of serviced
apartments focusing on the daily rate business
by operating more as hotels and the units
become smaller in newer serviced apartment
developments.
© 2018 CBRE, Inc. 2018 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK | BANGKOK CBRE RESEARCH
11OFFICE SECTOR
O F F ICE SECTOR
CHANGING WAYS OF WORKING
OVERVIEW developments in good locations such as Bhiraj
Tower at BITEC, Gaysorn Tower and Ari Hills,
The overall Bangkok office market remained all of which were 80 - 95% leased shortly after
stable in 2017, with steady demand, limited completion.
new supply, falling vacancy rates and rising
rents, but with slower growth compared to last Rents in every location and grade continued to
year. rise at 4 - 5% Y-o-Y. At the end of 2017, the
average grade A rent in the CBD rose to THB
In 2017, supply rose by 217,000 sq.m., making 994 per sq.m. per month, a 4.3% increase
the total amount of office space 8.8 million Y-o-Y.
sq.m. while demand rose by 194,000 sq.m.,
which is the same level as it has been in the Gaysorn Tower became the most expensive
past four years, resulting in a stable vacancy building in Bangkok with the highest rental
rate at slightly lower than 8%. rate of THB 1,400 per sq.m. per month,
exceeding the rent in Park Ventures which had
Demand for space in new buildings remained been at THB 1,300 per sq.m. per month since
strong as shown by the strong leasing 2013.
performance of recently completed office
© 2018 CBRE, Inc. 2018 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK | BANGKOK CBRE RESEARCH
13O F F ICE SECTOR
Currently, Gaysorn Tower, Park Ventures and Bhiraj Tower at EmQuartier are achieving rental rates
above THB 1,000 sq.m. per month. All these buildings can be accessed by the BTS Light Green Line,
in locations from Chidlom Station to Phrom Phong Station, which office tenants perceived as the
most prime locations in Bangkok. All rental rates mentioned are for small units of 100 to 300 sq.m.
Figure 2: Bangkok Office Market
sq.m. Total Supply Total Take-up Vacancy Rate Vacancy Rate
F o r e c a st
10,000,000 50%
9,000,000 45%
8,000,000 40%
7,000,000 35%
6,000,000 30%
5,000,000 25%
4,000,000 20%
3,000,000 15%
2,000,000 10%
1,000,000 5%
0 0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: CBRE Research
Figure 3: Average Achieved Rents for Bangkok Office Figure 4: New Office Supply by Area
Space
CBD Grade A CBD Grade B sq.m. CBD Non CBD
THB /sq.m.
Non CBD Grade A Non CBD Grade B
980 F o r e c a st
1,000 300,000
795 250,000
800 688
715 200,000
600 553 656
477 150,000
400 431
100,000
200 50,000
0 0
2011 2012 2013 2014 2015 2016 2017
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Source: CBRE Research Source: CBRE Research
© 2018 CBRE, Inc. 2018 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK | BANGKOK CBRE RESEARCH
14O F F ICE SECTOR
OUTLOOK flexible as tenants do not have to commit on
Looking forward over the next two years, the long-term lease, but only to membership fee.
overall market condition is expected to be the
same as 2017, with vacancy rates falling as The co-working space trend is emerging in
space from new office completions will be less Bangkok. In the second half of 2017, CBRE
than the expected net take-up of 200,000 sq.m. leased approximately 18,000 sq.m. of office
per year, but rents are expected to rise more space to co-working space operators across the
slowly. CBD. In 2018, four international players will
open their first centers in six locations in grade
About 584,000 sq.m. of office space was under A office buildings in Bangkok.
construction across Bangkok which is
scheduled to be completed between 2018 and Besides international players, local operators
2020. 200,000 sq.m. will be completed in 2018, like HUBBA also have plans to open more
100,000 sq.m. in 2019 and 250,000 sq.m. in locations in 2018 with sizes ranging from 1,000
2020. to 4,000 sq.m., which is bigger than any of their
existing centers.
If construction starts on more projects in 2018,
then the market condition after 2020 will Not only start-ups are using co-working space,
change. but some multinational companies are putting
their staff in co-working space. This is partly a
Developers have acquired sites where they plan result from changes in international
to build two million sq.m. of office space, but accounting rules where leases now have to be
construction has not yet started. More accounted for on the balance sheet.
developers have acquired sites to build mixed-
use complexes with an office component. Landlords need to design buildings to support
more people per sq.m. Besides column-free
Demand for office space has been reasonably floor plate, other core specifications and
healthy over the last few years despite a slow supporting facilities include a sophisticated air-
economy. CBRE expects companies will conditioning system with greater temperature
continue to expands, but as rents rise, more control, faster more efficient lifts, more toilets
and more tenants will seek to reduce per floor and supporting retail.
occupation costs. We have seen tenants started
to apply the 360 workplace strategy, where they With all this being said, rent is still the most
use less space to fit more people. This can be important factor for tenants when choosing
done in a column-free floor plate which allows their new office premises, followed by the
them to fit out their space in a more creative location and how close the office building is to
way. a mass transit station. The last factor, which
has become more important, is to win the
Some tenants will give up their meeting rooms talent war by providing a working environment
and there are some tenants considering leasing that allows companies to attract and retain the
co-working space. This is not only cost saving best employees. This can be achieved by
from renting smaller space, but also saving applying 360 workplace strategy supported by
capital spending on fit-out cost. It is more the right building specifications.
© 2018 CBRE, Inc. 2018 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK | BANGKOK CBRE RESEARCH
15RETAIL SECTOR
RETAIL SECTOR
CLICKS DRIVING THE REVOLUTION
IN BRICKS
With Thailand’s Consumer Confidence Index Occupancy has been positive since the second
maintaining its positive trend since the second half of 2017 due to a recovering economy and
half of 2017, the retail sector is expected to see some shopping centers reopening space after
growth in 2018. With this being said, the retail renovation.
property sector still faces challenges from high
consumer debt, low wage growth and the There is at least 500,000 sq.m. of new supply
growth of e-commerce. planned where developers have acquired sites
and said they would include a retail
As of Q4 2017, there was a total of 7.36 million component, but where construction has not yet
sq.m. of retail net lettable area, with new started and exact details have not been
supply increasing by about only 100,000 sq.m. released.
since the previous year. There will be major
increases in supply, with nearly 500,000 sq.m. Thai retail landlords will still focus on
of net lettable area of retail supply under renovating and, in some cases, expanding their
construction, of which about 350,000 sq.m. is existing shopping malls to improve their
expected to be completed in 2018. The major competitive position.
upcoming projects due for completion this year
are ICONSIAM and the second IKEA at
CentralPlaza WestGate.
© 2018 CBRE, Inc. 2018 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK | BANGKOK CBRE RESEARCH
17RETAIL SECTOR
The biggest theme for the retail sector The future is still uncertain, but e-commerce
continues to be the growth of e-commerce. In will change Thai retail property. If weaker
2017, the total revenue in the Thai e-commerce retailers and malls cannot reinvent themselves,
market is expected to reach THB 2.8 trillion, an they will become obsolete.
increase of 9.86% Y-o-Y, which is still less than
1% of total retail sales. In other countries with The retail mall is not dead and people will still
developed e-commerce, online sales now want to visit retail stores, but the way that they
account for between 10 - 18% of total retail shop and the preferred format will change.
sales. Many retailers are reacting to This will have the biggest change on the retail
e-commerce by adding an online channel so property market since the evolution of modern
that they can have an online and offline retail with the advent of the department store
omni-channel offering. more than 100 years ago.
Globally e-commerce is the biggest threat to
traditional retail malls and landlords are
looking for solutions to compete, with a focus
on creating experiences that cannot be
replicated online.
Figure 5: Bangkok Retail Market
Net Area (sq.m.) Total Supply Total Take-up Occupancy Rate Occupancy Rate
8,000,000 100%
7,000,000 98%
6,000,000 96%
5,000,000 94%
4,000,000 92%
3,000,000 90%
2,000,000 88%
1,000,000 86%
2011 2012 2013 2014 2015 2016 2017
Source: CBRE Research
© 2018 CBRE, Inc. 2018 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK | BANGKOK CBRE RESEARCH
18INDUSTRIAL & LOGISTICS
SECTORINDU STRIAL & LOGISTICS SECTOR
DIGITAL TRANSFORMATION LEADS TO
BETTER LOGISTICS
In 2017, the overall Thailand industrial Thailand is the largest automotive producer in
property market was stagnant due to weak South East Asia and ranked 12th globally, but is
demand from manufacturers wanting to set up likely to see a limited growth in car production
new factories. in 2018, according to the Federation of Thai
Industries (FTI).
According to the Bank of Thailand, Foreign
Direct Investment (FDI) in the first eleven Total Serviced Industrial Land Plot (SILP) sales
months to the manufacturing sector rose by in CBRE Research survey basket in 2017 were
6.8% Y-o-Y to USD 1.2 billion. With the total 1,700 rai, an increase of 35.2% Y-o-Y. Ready-
FDI of USD 7.2 billion, nearly 40% came from built Factories (RBF)’s vacancy rates as of Q4
Japanese and Taiwanese investors, whereas 2017 remained high at nearly 30%, with rents
ASEAN investors accounted for 22%. remaining flat.
The car industry will be critical to future Thailand’s industrial & logistics sector is
growth in demand for serviced industrial land continuing to grow with the increase in
plots and ready-built factories. e-commerce leading to greater demand.
© 2018 CBRE, Inc. 2018 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK | BANGKOK CBRE RESEARCH
20INDU STRIAL & LOGISTICS SECTOR
E-commerce sales have shown continued growth across the world with the improvement in last-mile
delivery services. Top e-commerce firms have been successful in boosting e-commerce sales by
lowering the delivery costs and modern logistics properties are key element in this delivery supply
chain.
Figure 6: Net Flow of Foreign Direct Investment to Manufacturing Sector
USD million
6,000
5,000
4,000
3,000
2,000
1,000
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: Bank of Thailand
Figure 7: Online Retail Sales By Country, 2015-2016
USD Bllion 2015 2016
900
783.8
800
700 672.0
600
500
393.9
400 341.9
300
137.8 147.4
200
100 32.7 38.3 14.1 19.6 11.9 17.5 4.1 5.6 3.2 5.3 3.6 4.1 0.4 0.5
0
China USA Japan South Korea Thailand Malaysia Vietnam Indonesia Singapore Philippines
Source: Electronic Transactions Development Agency
Note: Latest available data is from 2016
© 2018 CBRE, Inc. 2018 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK | BANGKOK CBRE RESEARCH
21CAPITAL MARKETS
CAPITAL M ARKETS
CBD LAND PRICES SPIKE
Demand for prime sites has remained strong Last year, Raimon Land signed a 30-year lease
with developers continuing to acquire sites for for a 6-rai site on Ploenchit Road for an office
all types of development. Land prices have development, Dusit Thani has renewed its lease
dramatically increased especially in the most for a 24-rai site on Rama IV Road with the
prime locations and along mass transit lines. Crown Property Bureau of Thailand and will
The biggest land sale in Thai history was the redevelop the site together with CPN.
recent acquisition of the British Embassy site
by the CPN/Hongkong Land joint venture at The lack of arm’s length transactions for
GBP 420 million and a record price paid of THB income producing properties make it difficult
3.1 million per square wah for a development to provide comment on the movement of
site on Soi Langsuan by SC Asset. yields, but we know that there is strong interest
in any quality income producing property, but
The Treasury Department of the Finance few vendors are willing to sell.
Ministry reported land prices rising by double
digits, especially in downtown Bangkok. While The proposed new land tax that penalizes
there was a 12.5% Y-o-Y increase as of Q4 2017 owners of unutilized land has been postponed.
in the REIC’s undeveloped land price index. The expected date for the tax to be effective has
Not only freehold sites but more leasehold land not been finalized nor have the exact details of
plots are also in demand. the tax.
© 2018 CBRE, Inc. 2018 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK | BANGKOK CBRE RESEARCH
23CAPITAL M ARKETS
FOCUSING ON DIVERSIFIED mixed-use project called Supalai Icon on the
INVESTMENTS recently acquired former Australian Embassy,
an 8-rai site on Sathorn Road. Pruksa Real
Developers are seeking diversification of their Estate diversified to non-residential
investment portfolio to ensure multiple development by developing a hospital in the
revenue streams. Residential developers are Saphan Khwai area.
now looking at developing income producing
office, hotel and retail properties. Residential developers broadened their
product line from mass to luxury
Origin Property announced plans for office, developments. Pruksa Real Estate and LPN
hotel and serviced apartment developments Development widely-known for their
while Ananda Development is planning a accomplishments in the mass market have now
mixed-use development comprising retail and a begun to offer more luxurious products.
serviced apartment on Ratchadaphisek Road as Similarly, Origin Property announced its
well as a hotel development on Sukhumvit Soi 8. acquisition of the Park 24, a high-end
Supalai reported that they would build a condominium project.
Figure 8: Government Bond Yields, 2011 - 2017
Yield 1 Yr Gov. Bond 5 Yr Gov. Bond 10 Yr Gov. Bond
6
5
4
3
2
1
Sep-12
Mar-11
Mar-12
Mar-13
Mar-14
Mar-15
Mar-16
Mar-17
Sep-11
Dec-11
Dec-12
Jun-13
Sep-13
Dec-13
Jun-14
Sep-14
Dec-14
Jun-15
Sep-15
Dec-15
Jun-16
Sep-16
Dec-16
Jun-17
Sep-17
Dec-17
Jul-11
Jul-12
Source: Bank of Thailand
Developers are seeking diversification of their
investment portfolio to ensure multiple revenue
streams.
© 2018 CBRE, Inc. 2018 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK | BANGKOK CBRE RESEARCH
24RISKS &
RISKS & OPPORTUNITIES
OPPORTUNITIESRISKS AND OPPORTUNITIES
CBRE Research expects a number of opportunities and risks to arise in 2018 as outlined
below.
OPPORTUNITIES RISKS
➢ Economic growth with growing consumer ➢ Overpriced land making developments
confidence leads to improved demand for unfeasible.
all types of property.
➢ Lack of affordability in the mass residential
➢ Tourism growth drives hospitality and market.
retail.
➢ Risk of oversupply in many sectors if most
➢ Infrastructure expansion acts as a catalyst planned new developments go ahead at the
for property development. same time.
➢ Banks ease criteria on mortgages. ➢ Political uncertainty around planned
elections.
➢ Incoming foreign investment in property
development joint ventures. ➢ Uncertain in tax policy
➢ Use of new technology by property ➢ Possible rises in interest rates.
companies.
➢ Development opportunities in the EEC.
© 2018 CBRE, Inc. 2018 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK | BANGKOK CBRE RESEARCH
26For more information about this regional major report, please contact: RESEARCH Executive Director Manager Manager james.pitchon@cbre.co.th thatchanan.siddhijai@cbre.co.th rathawat.kuvijitrsuwan@cbre.co.th Senior Analyst Analyst Analyst tornbonkot.patcharaprakiti@cbre.co.th malin.phlernjai@cbre.co.th pakapon.utaobin@cbre.co.th Analyst Analyst Analyst pichamon.chomanan@cbre.co.th korn.supappoj@cbre.co.th pattaratorn.pornsirikul@cbre.co.th Analyst Analyst pobporn.svetasobhana@cbre.co.th khanachai.kitisorayut@cbre.co.th For more information regarding global research, please contact: Global Head of Research Global Chief Economist nick.axford@cbre.com richard.barkham@cbre.com Head of Research, Asia Pacific Head of Research, EMEA Head of Research, Americas henry.chin@cbre.com.hk jos.tromp@cbre.com spencer.levy@cbre.com Follow CBRE CBRE RESEARCH This report was prepared by the CBRE Thailand Research Team, which forms part of CBRE Research-a network of preeminent researchers who collaborate to provide real estate market research and econometric forecasting to real estate. All materials presented in this report, unless specifically indicated otherwise, is under copyright and proprietary to CBRE. Information contained herein, including projections, has been obtained from materials and sources believed to be reliable at the date of publication. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. Readers are responsible for independently assessing the relevance, accuracy, completeness and currency of the information of this publication. This report is presented for information purposes only exclusively for CBRE clients and professionals, and is not to be used or considered as an offer or the solicitation of an offer to sell or buy or subscribe for securities or other financial instruments. All rights to the material are reserved and none of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party without prior express written permission of CBRE. Any unauthorized publication or redistribution of CBRE research reports is prohibited. CBRE will not be liable for any loss, damage, cost or expense incurred or arising by reason of any person using or relying on information in this publication. To learn more about CBRE Research, or to access additional research reports, please visit the Global Research Gateway at reports www.cbre.com/research-and-reports © 2018 CBRE, Inc.
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