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Thai property market set for AEC boost: Colliers

Thailand's property market will benefit from the coming into effect of the Asean Economic Community in 2015, according to research by Colliers International Thailand.

Meanwhile, the current domestic political situation is seen as the only major internal factor affecting the economy and development of the country, and all Thai and foreign investors as well as the general public are hopeful of finding a "soft" solution acceptable to all those involved soon, the company said.

Colliers' associate director for its research department, Surachet Kongcheep, said Bangkok and surrounding provinces would continue to grow, as the area is an investment and operational hub for most businesses invested in Thailand.

The Bangkok office market is more interesting again, he said, after a great deal of office space had been occupied since the beginning of 2011.

The overall office occupancy rate has increased dramatically in the past two years, while rental rates have also sharply increased, especially for Grade-A office buildings in the central business districts, where some properties are fetching more than Bt800 per square metre.

With a limited office supply in the CBD areas, demand is rising from both multinational and local companies. The average occupancy rate of Grade-A office buildings is now more than 12 per cent higher than in 2010, he said.

Many international brands are looking to open or expand outlets in the shopping malls or retail centres of Bangkok and other provinces, so the retail market is also more attractive than in the past few years, he added.

Although community malls still are the most active category in retail business, many shopping malls are also under construction and some may affect the market after they open their doors.

High-density residential areas in outer Bangkok have become the new locations for retail development, with many large-scale shopping malls having commenced their projects, such as Central West Gate, Mega Bang Yai and Mega Rangsit.

Moreover, some border and tourism provinces around Thailand have also became new destinations for retail development, said Surachet.

On the residential front, many developers have started to launch or have fully launched new projects in provinces around the Kingdom, especially condominium projects.

Apart from some resort destinations and coastal cities, Chiang Mai, Khon Kaen and Udon Thani have become new destinations for condominium development.

Meanwhile, the new extensions of the mass-transit lines are the major drivers of residential development in Bangkok. This is especially true for condominium projects.

In addition, in many provinces - and especially business cities - many condominium projects are under construction and scheduled to complete by the end of 2015.

The larger provinces throughout Thailand have shown growth during the past few years, with the gross provincial product of each of them being significantly higher than it was a few years ago, he said.

The revenue of the local government offices and the number of people in each province has also increased, especially in some business provinces.

The central government has also launched many new infrastructure development projects to boost the country's competitiveness and make it more attractive.

Border provinces

Many provinces along the border of Thailand are becoming new investment destinations for both Thai and foreign investors.

These areas are not too far from the special economic zones of neighbouring countries, as the supporting facilities of those countries still do not meet international standards. Many foreigners that work in locations that border Thailand will, therefore, live in the Kingdom and cross the border to reach their factory or company.

The value of the border trade between Thailand and its immediate neighbours has increased during the past few years, and last year's record level of Bt1 trillion is likely to be surpassed this year.

Activity is particularly high in provinces that are directly connected to neighbouring countries through friendship bridges, Surachet said.

Chiang Mai, Khon Kaen, Udon Thani, Nakhon Ratchasima, Ubon Ratchathani, Chon Buri, Rayong, Phetchaburi, Prachuap Kiri Khan, Nakhon Sri Thammarat and Songkhla are first-tier cities that will keep growing, he said.

However, some smaller provinces around the first-tier cities and some bordering provinces, such as Chiang Rai, Tak, Lamphun, Ratchaburi, Kanchanaburi and Nong Khai, are also expanding.

In addition, some provinces, such as Phitsanulok, are becoming more important because they are in the best locations along the development lines.

The border provinces and some existing business cities have shown the most interesting activity during the past one or two years and will continue to do so in the future, though some of the infrastructure development projects from the central government may be delayed or never start, he added.

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