Bangkok developers renew interest in large land
Property firms are focusing on developing large plots of land as smaller pieces of prime land around central Bangkok become scarcer, Jones Lang LaSalle has observed.
"After Bangkok's real-estate boom in the late 1980s and early 1990s, developer interest in large public sites virtually disappeared for several years as the Asian financial crisis curtailed economic activity and new real-estate development," said Dan Tantisun-thorn, head of research and consultancy at the real-estate services firm.
"The prospects for such large sites was [revitalised] by the economic recovery in the middle of the last decade, with the Suan Lum Night Bazaar site owned by the Crown Property Bureau representing the last leasehold site of more than 50 rai [8 hectares] to be publicly tendered in central Bangkok in 2005."
However, an uncertain domestic political environment and the global financial crisis again put these types of projects on the back burner.
The return of a more stable political environment over the past year and a half and strong economic growth are again raising the prospects for these types of sites to come back on to the market, he said.
A number of these large public sites connect to existing mass-transit infrastructure, while transit-oriented development has evolved organically in Bangkok, with businesses, retailers and residents being drawn to urban-rail stations. For this reason, these large plots have strong potential for development or redevelopment.
Some of the most visible sites include the Crown Property Bureau's Lumpini and Ratchadaphisek sites, the State Railway of Thailand's Makka-san and Mae Nam sites, and the Port Authority's Klong Toei riverside site. As a result, various stakeholders in these plots have continued to evaluate the process for bringing them to market.
Despite strong advantages in terms of location, a fair amount of caution needs to be exercised when undertaking development of these sites. Master plans should account for the amount of new supply that can be introduced to the market and a particular catchment over a given period of time.
"Our studies in Bangkok and urban centres around the world show the amount of the various real-estate uses, whether for hotel, office, retail or residential purposes, that can be optimally absorbed. In a rapidly evolving market like Bangkok, this is what should largely determine feasibility on these sites," Dan said.
Modern cities around the globe are looking to maximise the use of scarcer prime land resources. Bangkok is no exception.
The development of available large prime plots across the city is sensible and will also contribute to the development of the city itself.
Relevant parties just have to make sure that these plots are best used |and any development on the sites is well aligned with Bangkok's real-estate dynamics for sustainable success, |he said.