JLL predicts 10 world-class mixed-use properties that will transform Bangkok as a destination for investors. and skilled workers Foreign goods in 2018, Grade A offices of more than 900,000 square meters, shopping centers of more than 300,000 square meters.

The Thai real estate market will clearly signal its readiness for adjustment during the next 12 months. Through pushing for domestic policy and building confidence in the domestic market. In response to the current global macro-economic conditions that are still fluctuating.

Important statistics from the past year 2023 show the dynamic movement of the Thai real estate market. Including significant growth of 66% year-on-year in investment volumes in target industries. The number of tourists increased 152% compared to last year, exceeding the government's target.

Mr. Michael Glancie, Managing Director of Jones Lang LaSalle (Thailand) Company Limited (JLL), said that despite facing challenges from the global economic situation, But Thailand has always shown outstanding potential. With the determination of policy makers to upgrade the infrastructure strategy and grade A real estate in Bangkok to be of high quality. It will become an important driving force for growth. It is also something that will help alleviate the impact of macroeconomic fluctuations, high costs, and other geopolitical factors.

Throughout 2024, JLL expects the key growth drivers to be which will influence the Thai real estate market will consist of 4 factors as follows:

The era of mega projects

In 2024, the Thai and Southeast Asian real estate markets will be increasingly influenced by strategic improvements in infrastructure and the quality of Grade A real estate in Bangkok. Up to 10 projects worldwide. The development of these projects is expected to add more than 900,000 square meters of Grade A office space.

More than 300,000 square meters of shopping centers, 5,400 luxury condominium units and 5,900 luxury hotel rooms in the Central Business District by 2028. The emergence of these premium real estate projects will make Bangkok It has become an attractive destination for investors. Multinational corporations (MNCs) and highly skilled workers from abroad

Old buildings and challenges

With over 60% of office space in Bangkok and the surrounding area being more than 20 years old, premium supply entering the market poses a challenge to the competitiveness of these aging buildings. Office building owners with investment strategies and creative building management Brings a competitive advantage and stands out from other competitors in the market Therefore, strategic building renovation investment planning is extremely important. To meet the changing needs of the market

Data from JLL shows that An old office building that is more than 10 years old in the Central Business District and has undergone major renovations. Able to maintain rent levels close to the market average. While the office buildings have not been renovated and remain in their original condition. Still seeing tenants moving out. Including the continuous reduction of rent, the rental difference of the building. Both of these segments increased by 8.8% as of Q4 2023. This trend is not limited to the office market. due to current Flight-to-quality and Flight-to-green It is starting to appear more in the market of shopping centers and logistics warehouses. It has the potential to expand further into the hotel and residential sectors.

Integrating ESG concepts

ESG concepts have become essential in the Bangkok office market. Developers and investors are striving to meet standards through certifications such as LEED and WELL for multinational companies, which is a key demand driver for office and logistics space. Office space is often designated as only ESG-certified, with JL L's database indicating that over 90% of new office leases over the past five years have occurred in green buildings. With average rents fetching 14% higher than similar buildings, this puts even more pressure on older buildings that are not yet ESG certified.

Foreign investment surges

It is undeniable that foreign investment is very important to the growth of the Thai real estate market. This is supported by significant capital flows into Thailand. In 2023, over 65% of office space will be leased by multinational companies. Moreover, foreigners purchased no less than 10% of the number of condominium units traded in Bangkok last year, as Thailand continues its efforts to attract foreign investment.

Mr. Rattawat Kuwichitsuwan Senior Assistant Managing Director of Hotel Advisory and Asset Management Services, Jones Lang LaSalle Co., Ltd. (JLL), said that over the past 10 years, more than 47% of sales of assets that were not vacant land came from the hotel business. This is a testament to the strong investment attraction in the tourism sector and the strong basis for our rapid recovery. If the form of property ownership of foreigners in Thailand is more developed. It will provide even more opportunities for foreign investors in the tourism and service related industries.

Mr. Anawil Jiamprasert Head of the Research and Consulting Services Department of Jones Lang LaSalle (Thailand) Company Limited (JLL) said that in the face of global economic fluctuations The Thai real estate market has not only remained stable but is also ready to develop further in a variety of assets, making Thailand an important foreign investment destination in the Asia-Pacific region.

This is an eye-catching change for the downtown area of Bangkok!!!

Source:https://www.thansettakij.com/real-estate/590260

at 08/3/2024