EXCLUSIVE: Opinions remain divided as to how deep the impact will be for Thailand’s property and real estate industry from yesterday’s declaration of a State of Emergency in Bangkok and its surroundings.
DDproperty.com has spoken to a number of agencies and developers in the kingdom this morning to gauge their opinions as to what the immediate future may hold for the country’s property and real estate sector.
Perhaps the most optimistic was David Simister, Chairman of CBRE Thailand.
He told DDproperty.com: “The situation is nothing new for Bangkok and Thailand. In CBRE’s 25 years in the kingdom, we have gone through coups, political deadlock, natural disasters and both us and the property market understand that whilst the situation requires caution. We have not seen any negative impact on values, now or in the past, and Thailand’s real estate fundamentals remain good and set for growth.
“Our history here teaches us that markets soon rebound in terms of volume, and even last week we concluded more than 60 condominium sales and 5,000 sqm of office leasing.
“It is a challenging time but one Thailand, CBRE and our clients will pass through.”
Equally optimistic was Mark Bowling, Associate Director of Sales and Leasing for Colliers in Pattaya.
He said: It’s currently unclear to me if Pattaya or Chonburi will come under this State of Emergency. I hope they’re referring to the outlying suburbs of Bangkok rather than surrounding provinces.
“In Pattaya it’s business as usual and good sales are being achieved from all nationalities. Most expats living here, like myself, take the opinion of seen it all before, what state of emergency? I seem to recall the last Coup in 2006, I think I saw it on BBC but wouldn’t have known otherwise.”
Perhaps more circumspect was Surachet Kongcheep, Associate Director of Research for Colliers Thailand, who said: “Thailand’s property market has been overshadowed as the year begins by dysfunctional domestic politics, especially in the Bangkok market, after the announcement of the State of Emergency.
“Local Thai buyers are spending less and waiting for more a clear situation, all property developers are delaying their new launches, while foreigners are also not confident and have postponed their buying decisions.”
Simon Landy, Executive Chairman of Colliers Thailand and Chairman of the British Chamber of Commerce, said: "In general, I would say that the emergency decree adds more uncertainty for business and will certainly further dampen sentiment, although if the situation can be resolved quickly the impact will be mainly short term delays in transactions closing rather than a longer malaise."
Speaking on the World Business Report on the BBC World Service yesterday evening, he added: "Anyone looking to invest will be, at best, pausing and looking at their options. As of today there are still transactions going on but at a lower volume, and people are taking longer to make decisions."
Cees Cuijpers, Managing Partner of Town & Country Property, said: “The property industry will never flourish with any temporary declared ‘state of emergency’; it’s however the historical consequence of Thailand’s feudalistic past. Who wants to be the next Big Man? So, the sequence will continue but life goes on as normal once parties cooled off again.”
Suphin Mechuchep, Managing Director of Jones Lang LaSalle Thailand, was more worried about the future.
She said: “The introduction of the state of emergency will dampen investor sentiment, with more foreign investors adopting an increasingly cautious approach towards real estate investment in Thailand.”
Also expressing concerns was Samma Kitsin, Director-General of the Real Estate Information Center.
He said: “The Emergency Decree imposed by the Government will result in further slowdown in the Thai property market, especially in the areas covered by the Decree, namely Bangkok, Nonthaburi, part of Pathum Thani and parts of Samut Prakarn.”
Darunee Rungruangpol, Managing Director, David Property Service, was more optimistic, and said: “In my opinion, the announcement of the State of Emergency should not impact the property market as long as there’s no violence.
“Most buyers or developers in those areas would be more in a wait-and-see mood.”
Veteran Thailand property developer Nigel Cornick, Chief Executive Officer of Kingdom Property, has seen it all before.
He said: "Thailand has shown its resilience over the last 10 to 15 years and a remarkable ability to bounce back stronger than ever from political upheavals, and I do not expect it to be any different this time.
“High quality projects in Thailand’s property industry still offer a very good long term investment proposition and we expect investment to continue in Pattaya where we have three developments in prime locations.
“Tourism arrivals may be impacted to Bangkok, but outside of the city demand remains strong, particularly to Pattaya which is 60 minutes from Suvarnabhumi international airport."
Srettha Thavisin, President of Sansiri felt the impact will be minimal.
He said: "In the past 10 years we have witnessed many political events and we believe Thai people, especially in Bangkok, are quite immune to such things. It will have only a short-term effect.
Finally Dr. John Millar, Head of Investor Relations for Ananda Development, said: “We don’t feel that the declaration of the State of Emergency in Bangkok will materially alter the situation for the property sector. How they implement it might.”
Millar’s final comment is probably the most poignant and the one that will be causing most people in the industry the most worry. Just what will happen next?
Pictured is a protester during the State of Emergency in Bangkok during 2009.
Andrew Batt, International Group Editor of PropertyGuru Group, and Kanchana Paha, Thailand Editor, jointly
wrote this story. To contact them about this or other stories email andrew@propertyguru.com.sg
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If you have a property-related story about the current situation in Bangkok, please email andrew@propertyguru.com.sg.
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