Foreign investors are already negotiating to acquire and invest in real estate, especially hotels and resorts worth up to Bt15 billion, with an eye to a democratic election to be held at the end of this year, according to an international property firm.

"Thailand's property market has potential for growth when the country's politics becomes clearer because of its strengths in the region in the service and tourism businesses," Patima Jeerapaet, managing director of Canada-based Colliers International Thailand, said yesterday.

Almost all the investors from the Middle East, US, Europe, China, Hong Kong, Singapore and Australia have started to talk with prospective local partners about setting up joint ventures or acquiring projects, with the deals expected to be concluded in the second half of this year or next year

The property market, especially office buildings, will see only slight growth this year because almost all businesses have delayed their expansion plans due to the uncertainty and do not need more office space.

The vacancy rate in Greater Bangkok has reached 13 per cent of total office rental space of 7.45 million square metres.

Commercial director Gregory White said demand for office space would be only 6.5 million square metres this year and increase to 6.7 million square metres next year. But supply would also increase to 7.75 million square metres next year, so the vacancy rate could rise to 16 per cent.

"Almost all businesses have to postpone expansion until next year because they don't know what will happen in Thailand. As a result, demand for office space has to go down or remain stable from the second half of this year until next year," he said.

Office rents will also be stagnant this year and grow less than 5 per cent next year.

In Bangkok's central business district - around Silom, Sathorn and Wireless roads - Grade A office space is renting for Bt650 to Bt750 per square metre per month and Grade B space for Bt525 to Bt550.

Grade A space in outer areas such as Ratchadaphisek, Rama IX and Bang Na is fetching Bt454 to Bt500..

Somluck Srimalee

The Nation