Knight Frank takes an in-depth look at 4 real estate sectors in 2024 Amidst the economic slowdown, EV-data centers Business comes with pressure on industrial groups to expand. Hotels recover from surge in tourist numbers Meanwhile, office supply is overflowing - green buildings grow in line with ESG trends. As for housing, the slowdown to less than 3 million is still worrying.

Key Points:

Open the perspective of "Knight Frank Foresight 2024 Pivoting Towards Opportunities", in-depth look at opportunities and challenges in 4 sectors: housing, industry, hotels, office buildings. In an era where overall demand remains stagnant

Factors holding back growth Pointing out that condominiums below 3 million are still a concern. Reject rates will affect purchasing power and slow down. It is expected that real demand will drive horizontal sales volume to 4,000 units.

The industry group expanded from the support of the EV car market and data centers. Keep an eye on the oversupplied office building market. But green buildings have good prospects following the hot ESG trend.

Nattha Khahapana, Managing Director Knight Frank Thailand said at the event “Knight Frank Foresight 2024 Pivoting Towards Opportunities” that the outlook for 2024 will be a year full of challenges from many "risk factors" that have arisen both domestically amidst the economic slowdown and abroad. by domestic factors such as the problem of low inflation The problem of household debt is still worrisome and must be kept an eye on. In addition, there is the factor of higher production costs. The housing market is growing slowly.

This is due to high interest rates and the problem of Reject Rate or loan rejection by financial institutions. As for factors from abroad This comes from the high uncertainty of the world economy and trade due to the war occurring in many areas. Global financial markets have become more volatile due to the impact of high interest rates. All of the factors mentioned above have a direct and indirect effect on the economy. Including an overview of the real estate market in Thailand.

Although in 2024 we see a continued good trend from expanded private investment. and private consumption grew from the recovery of the tourism sector. Including government policies that help ease the burden of living expenses. and stimulate spending through the Easy E-Receipt project

“Doing business amidst volatility Data is very important for trend analysis and planning. Whoever has more, faster, and more accurate data will win the race. I believe that the information that Knight Frank received from customers It will contribute to awareness of opportunities and challenges occurring in the real estate market as a whole. and in-depth look at each sector, including housing, industry, hotels, and office buildings,” Nattha said.

EV-data center pushes industry expansion

Marcus Burtenshaw, Executive Director-Head of Occupier Strategy & Solutions, said that in 2024, the businesses to watch are: Data center business or Data Center is currently receiving a lot of attention from both domestic and foreign investors. This is a good sign of increased demand in the industry.

In the past year 2023, as much as 8,867 rai of land was sold, accounting for 2 The same amount as last year was due to the EV (Electric Vehicle) business, a group of electric cars that is growing rapidly. There are also electronic products that are expanding in the Eastern Economic Corridor or EEC (Eastern Economic Corridor). This is also the main target area that investors are interested in, accounting for more than 80% of all transactions.

Hotels recover from surge in tourist numbers

Carlos Martinez, Director of Research and Consulting, said that the hotel market situation is now considered to have returned to the point before the COVID situation. The room price per night has increased very much. Even though the number of tourists has not returned like it was before Covid.

Therefore, the main challenge for the hotel market in 2024 is whether the number of tourists will recover to the pre-COVID level or not. Considering that the tourist occupancy rate in 2023 is only around 75%.

“The hotel market situation is currently quite bright. Nightly room rates have increased significantly. It's even higher than during Covid. But at the same time, operating costs such as employee wages and electricity costs have increased more than the proportion of profits. Therefore, in 2024, the main challenge is whether the number of tourists will recover to the level before the situation. When is Covid? To bring the overall picture of the hotel business back to a satisfactory point of profit,” Carlos said.

Office supply overflows - green buildings grow to support ESG

Panya Jenkitwattanalert Executive committee The head of the office building department said that the office building market has entered a very challenging period. From the trend of land ownership decreasing. with the amount of supply increasing As a result, the market began to enter a state of oversupply.

“Although there will be a significant increase in demand for space by 2023, it will not keep up with the amount of supply entering the market. This results in increased competition for office buildings. This will benefit tenants who have more options.”

In 2023 and continuing into 2024, there are good signs from multinational companies that want to move their company base to operate in Thailand. In particular, companies from China in the EV vehicle business segment have started looking for space to set up offices in Thailand. with Ratchada being the location that is in the target As for Thai companies, they are beginning to expand and use more office space to conduct business. Because it is an important part of the image and credibility of attracting talented employees to work.

Ayutthaporn Buranakul, executive director and head of service office space strategy for the project, said that the trend of demand for office buildings with more sustainability concepts (ESG: Environment Social and Governance) such as Green Building buildings that are gaining popularity includes To office space that focuses more on work life balance.

In addition to tenants looking for buildings that care about sustainability, We also found trends in various businesses. who need a carbon credit consultant to be in line with the future direction of the business. Knight Frank has a team of experts in this field to provide advice to customers.

Housing growth slows

Frank Khan, Executive Director and Head of Housing Department, said that in 2024, the housing market still faces the problem of loan rejection by financial institutions or the Reject rate and increased costs for entrepreneurs. As a result, developing products below 3 million baht may not be very responsive. while those with housing purchasing power exceeding 3 million baht or more will be the main group of customers that entrepreneurs are interested in

What is worth watching is As for the housing market, it is beginning to enter a period of slow growth because it is a Real Demand market, buying for living. Even though the demand still exists But demand has started to keep up with the supply that has been released into the market recently. Overall home sales will be at 4,000 homes in 2024.

While the condominium market in 2023 as a whole had 745,335 units open for sale, 527,067 units were sold, accounting for 70.7%, with an average price of 145,000 baht per square meter, and if you look at the sales of newly opened sales in each That quarter, it will be found that sales were only able to reach more than 30%, a situation that has not yet returned to reaching the 40% level that was achieved in the beginning of 2023.

Especially in markets with a price lower than 3 million baht, which is a market where many developers develop projects at this level. While the market price level 10-15 million baht can still make good sales.

“From the information it was found that Buyers in this price market do not feel the need to rush to buy. However, Sales were able to close at 80% of the 7,000 units open for sale, but this did not affect the overall condominium market because the number of new sales was considered relatively small. Compared to what is currently available in the market,” Frank said.

As for the real estate market trend in London, England, it is still preferred by wealthy people in Thailand. Knight Frank can rake in sales of more than 1,000 million baht in 2023, and in 2024 there will still be increasing demand from Thai billionaires who want to buy real estate from England.

Source:https://www.bangkokbiznews.com/property/1112699

at 12/2/2024