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Market Research Report

Commercial Real Estate Market in Thailand - Growth, Trends, and Forecast (2020 - 2025)

Published by Mordor Intelligence LLP Product code 925426
Published Content info 120 Pages
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Commercial Real Estate Market in Thailand - Growth, Trends, and Forecast (2020 - 2025)
Published: February 1, 2020 Content info: 120 Pages
Description

The Thai economy is expected to grow in 2020 as its tourism and exports are a steady growth indicator. The number of expats applying for work permits, as well as foreigners, who want to live in Thailand full-time, continue to rise steadily. Thailand's property market is in a slow but consistent upward trend for over a decade now.

The Thai commercial estate market is growing marginally and most likely to grow weakly in 2020. There´s been tighter mortgage regulation, higher interest rates, and slowing economic growth, not to mention the country's volatile political situation. Foreigners are restricted in their activities to invest in commercial real estate property by both the Thailand Land Law Code and the Thailand Foreign Business Act. Low and medium-priced properties in the suburban areas, that are mainly built to cater to Thai buyers, has seen a greater oversupply.

Thailand offers among the region's lowest living costs and office rentals. The office real estate market in Bangkok is changing with the trend of the active workplace and co-working space playing a major role in leasing large amounts of office space in Bangkok. The incoming new supply is expected to put pressure on older office buildings to renovate and upgrade their buildings to be competitive in the changing market. Bangkok features the region's best cost of living to development ratio as well.

The expansion of existing companies and the emergence of new companies in the logistics market has increased demand for modern logistics properties (MLPs) in Thailand. The fast growth of e-commerce has fueled demand for logistics real estate in Thailand. The average occupancy rate of all industrial estates in Thailand is approximately 90%.

Key Market Trends

Growth in Tourism Is Driving the Market

There are 40 million international tourists expected to arrive in-country in 2019, driven by the growth of Chinese tourists who now comprise 60% of total tourist arrivals. Countries from East Asia remained the largest contributor to international tourists' arrival With rising tourist arrivals, the average occupancy rate at Bangkok downtown hotels has steadily risen to almost 75%. However, the room rate has remained relatively flat.

Thai-property is still affordable compared to other countries in the region like Mainland China, Singapore, and Hong Kong. Buyers from these countries still see Thailand, and especially Bangkok, as attractive spots to buy the property. The combination of buoyant tourism and Chinese demand should mean that the market will regain momentum in 2019 and further.

Increasing Foreign Direct Investments in Thailand Property Market

In recent years, minor changes in Thai law have allowed nonresidents to further explore the Thai real estate market. There has been a rise in FDI investment in real estate activities in Thailand in 2018 compared to 2017. According to Source, there is a surge in real demand from foreigners despite challenges as they account for 30% of total sales. Foreign direct investment from major investors mainland China and Hong Kong are also likely to increase due to Beijing's trade dispute with the U.S.

Bangkok is a popular investment destination for foreigners. The Bangkok metropolitan area was a prime investment location for China. Thai banks are being conservative about new project lending to developers, so Thai developers are seeking funding from foreign partners. Most joint ventures to date have been with Japanese investors on a project-by-project basis.

The luxury segment continues to attract a vast number of foreigners with properties located in the central areas. Many new and existing industrial estates are expanding being developed in the Eastern Seaboard as this area is the most popular location for foreign investors in Thailand.

Competitive Landscape

Thailand's commercial real estate market is moderately fragmented due to the presence of a cast number of players in the country. Property developers across Thailand are experiencing an alluring attraction for hotel-branded residences in order to encourage price premium points and buyer demand. Several developers are also differentiating from build-to-sell residential projects toward build-to-hold income-producing assets including serviced apartment buildings, offices, and hotels.

Industrial estate developers are more focused on investments or developing new phases or projects in the future. Mixed-use development projects are trending in Thailand that offers hospitality and residential elements at the same time. Major real estate players in Thailand Residential market are Sansiri Public Co. Ltd, Supalai Company Limited, Property Perfect and Pruksa Holding.

Reasons to Purchase this report:

  • The market estimate (ME) sheet in Excel format
  • Report customization as per the client's requirements
  • 3 months of analyst support
Table of Contents
Product Code: 68078

Table of Contents

1 INTRODUCTION

  • 1.1 Study Assumptions
  • 1.2 Scope of the Study

2 RESEARCH METHODOLOGY

3 EXECUTIVE SUMMARY

4 MARKET INSIGHTS

  • 4.1 Current Economic Scenario and Consumer Sentiment
  • 4.2 Commercial Real Estate Buying Trends - Socioeconomic and Demogpaphic Insights
  • 4.3 Government Initatives, Regulatory Aspects for Commercial Real Estate Sector
  • 4.4 Insights on Existing and Upcoming Projects
  • 4.5 Insights on interest rate regime for general economy, and real estate lending
  • 4.6 Insights on rental yields in commercial real estate segment
  • 4.7 Insights on capital market penetration and REIT presence in commercial real estate
  • 4.8 Insights on public-private partnerships in commercial real estate
  • 4.9 Insights on real estate tech and startups active in real estate segment (broking, social media, facility management, property management)

5 MARKET DYNAMICS

  • 5.1 Drivers
  • 5.2 Restraints
  • 5.3 Opportunities
  • 5.4 Challenges

6 MARKET SEGMENTATION

  • 6.1 By Type
    • 6.1.1 Offices
    • 6.1.2 Retail
    • 6.1.3 Industrial
    • 6.1.4 Logistics
    • 6.1.5 Multi-Family
    • 6.1.6 Hospitality
  • 6.2 By Key Cities
    • 6.2.1 Bangkok
    • 6.2.2 Chiang Mai
    • 6.2.3 Hua Hin
    • 6.2.4 Koh Samui

7 COMPETITIVE LANDSCAPE

  • 7.1 Market Concentration
  • 7.2 Company Profiles
    • 7.2.1 Developers
      • 7.2.1.1 Central Pattana Plc.
      • 7.2.1.2 Supalai Company Limited
      • 7.2.1.3 Pace Development Corporation Plc.
      • 7.2.1.4 Raimon Land Pcl
      • 7.2.1.5 Blink Design Group
    • 7.2.2 Real Estate Agencies
      • 7.2.2.1 CBRE Thailand
      • 7.2.2.2 Savills
      • 7.2.2.3 Colliers International Thailand
      • 7.2.2.4 RE/MAX Thailand
      • 7.2.2.5 JLL Thailand
      • 7.2.2.6 Knight Frank Thailand
    • 7.2.3 Other Companies(startups, associations, etc.)
      • 7.2.3.1 Property Perfect
      • 7.2.3.2 Hipflat
      • 7.2.3.3 DDProperty
      • 7.2.3.4 Dot Property

8 FUTURE OF THE MARKET AND ANALYST RECOMMENDATIONS

9 INVESTMENT ANALYSIS

  • 9.1 Direct Investments
  • 9.2 Indirect Investments

10 DISCLAIMER

11 ABOUT US

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