JLL points out that shopping centers - luxury condos - hotels in Bangkok are showing signs of recovery while the rental office market faces more challenges as a large number of new supplies are gradually being completed.

Mr. Michael Glance, managing director of JLL, said that due to the global economic and political uncertainty. This has a wide-ranging impact, as can be seen from the volatility in the Thai stock market. Causing many investors to delay investment to wait and see the situation. However, in the real estate sector of Thailand. Overall, the fundamentals are still good. and believes that it will not be affected much from various uncertain situations happening now

“In general, demand or demand in the real estate market is related to economic conditions. in the case of Thailand It is expected that This year's economy will continue to expand. The main contributing factor is the recovery of the tourism sector. which from the beginning of the year until the middle of June this year More than 11 million tourists have arrived in terms of interest rates. Despite the upward adjustment But generally still in the lowland compared to other countries. together with the inflation rate that can be controlled at the target level All of these are positive signals for the country's overall economic direction. including the real estate business sector

Mr. Glance continued that the key trends Interestingly, property development companies are still the main buyers in the land market. Both land for sale, freehold ownership and land for long-term lease. This can be seen from the long-term purchase/lease of land by major property developers in the first quarter of this year only. The total value is as high as 7.7 billion baht, compared to the purchase of land in both 2022 and 2021 with a total value of 7.1 billion baht and 5.6 billion baht, respectively.

because the group of tenants whether it is renting shopping center space or office building There is a tendency to choose or migrate to more quality buildings/projects, so old buildings or projects will need to invest in improving and upgrading the quality. To be able to retain existing tenants and attract new tenants. In an environment where competition for tenants is increasing

Large companies and organizations both Thai and foreign All aim to reduce net greenhouse gas emissions to zero. Therefore, these companies/organizations Want to rent space in a building that has been certified with green building standards Even having to pay up to 13% higher rent compared to renting space in a similar quality building without standard certification

Mr. Glance stated that the situation of the Bangkok real estate market Luxury Condominium At present, Bangkok has luxury condominiums in total of approximately 73,000 completed projects. There are only about 4.9% of units left for sale.

While there has been a limited increase in new supply recently. The overall average price of condos in this group is starting to show signs of recovery. In the first quarter of this year increased by 0.6% from the previous 12 months to an average of 211,500 baht per square metre. There is a higher demand from foreign tenants who start returning. found that since the beginning of the year until now Luxury condo rentals have increased by an average of 30%.

Thais are still the main buyers in this segment of the condo market. but at the same time It was found that buying from foreigners is gradually returning after international travel control measures are lifted.

while the overall situation is returning to normal after COVID JLL expects New Supply Increased in Limited Quantity The price began to move up. and increasing opportunities for renting Will be a factor that will attract buyers to invest. both Thai and foreigners Back into Bangkok's luxury condo market And encourage the launch of new projects to follow.

While shopping centers in Bangkok, there are good shopping centers with a total area of 3.6 million square meters. and only 5% of the vacant space is left for rent. The food and beverage service sector is the tenant group with the most active space rental. Consumer confidence is at a good level. An increasing number of customers who buy service products

especially as foreign tourists And there are more options for renting space in newly built or renovated prime shopping centers. As a result, there are more retail entrepreneurs interested in expanding their branches or opening up business in Bangkok's fine shopping centers, especially in the first quarter of the past. More than 36 branded goods and services retailers have announced plans to open new stores in Bangkok.

Projects to be rebuilt or renovated This will result in an increase in the vacant rate of rental space in the shopping center market soon, but at the same time These projects have the opportunity to attract international brands to open stores. making rent more active and can call for higher rents in the next order

As for the hotel sector, all levels of Bangkok continued to recover from last year to this year, as of the end of the first quarter of this year compared to the previous 12 months. The average revenue per room from the number of available rooms increased by more than 310%

for 4-5 star hotels and almost 220% for 3-star and budget hotel groups. The improvement in the average revenue per room mentioned. This was due to an increase in the occupancy rate of room service and the daily room service charge. As a result of the strong recovery in the tourism sector for the remainder of the year, revenue per available room is expected to continue to rise. But the increase will have a slower rate. With a total supply of 8,400 new rooms entering the market this year. from various projects that used to be closed during COVID and then returned to open for service again and hotel construction projects that had been postponed and resumed until completion

As for grade A office buildings, Bangkok currently has grade A office buildings for rent in the central business district with a total area of 1.4 million square meters. The majority of new rental transactions It is a Grade A office space rental. This reflects the demand from tenants for quality office/office buildings. As a result, the average vacancy rate of grade A buildings has increased to 21.5% as newly completed projects take time to find tenants to fill the rental spaces in the buildings.

“This trend will continue throughout the year as, at the end of the year, the total volume of Grade A office space in Bangkok has increased. will move up to 1.6 million square meters It will be 228,000 square meters of new projects completed this year, which will be the highest amount of annually completed additions that were made in the last round in 1999."

Source:https://www.bangkokbiznews.com/property/1075991

Date 30/06/2023