By Andrew Batt:
Real estate investment prospects in Thailand have improved substantially during the last year according to a new report which gathered opinions from more than 400 property investment professionals from around the world.
The 2013 Emerging Trends in Real Estate Asia Pacific report, published by Pricewaterhouse Coopers and Urban Land Institute, ranked Bangkok in sixth place in the region for both investment and development.
In 2012 Bangkok was ranked 14th in Asia Pacific, and the city’s attractiveness as a property investment destination has risen substantially from the 19th place seen as recently was 2010.
“Bangkok has emerged from the shadows this year, at least partly on the back of a newly vibrant REIT market and the opportunistic yields afforded by a growing economy,” the report said.
At the same time, the report noted, Bangkok has never been an easy place for foreign investors to make money. Recently they have been whiplashed by an unstable political environment, a string of natural disasters, and a lack of transparency in the legal and regulatory framework.
“There’s still a lot of uncertainty because there are rumours about new taxes,” said one interviewee.
Bangkok’s condominium sector has seen less supply emerge over the past year as existing inventory is digested and developers diversify towards resort destinations on the coast, according to the report.
Unsurprisingly, the real potential in Bangkok and, indeed, Thailand lies in the tourism and hospitality sector, it noted.
Focusing on the office market, the report said that the office market benefits from a lack of new supply—no significant new facilities are set to open until 2014—but demand is problematic because, as one interviewee said, “I don’t see it as a big financial centre or a centre that would draw a lot of international business.”
The report said that similar to the Malaysian capital of Kuala Lumpur, rising consumer demand in Thailand is expected to draw a significant number of international retail chains over the near term, helping boost rents across the retail sector.
The top five cities for investment prospects in Asia Pacific according to the report are Jakarta, Shanghai, Singapore, Sydney and Kuala Lumpur. Least attractive is
The full report is available from: http://www.pwc.com/en_GX/gx/asset-management/emerging-trends-real-estate/assets/pwc-emerging-trends-in-real-estate-asia-pacific-2013.pdf
Andrew Batt, International Group Editor of PropertyGuru, wrote this story. To contact him about this or other stories email andrew@allproperty.com.sg
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