Lower consumer confidence and a shift by developers from condominiums to town house and single house developments were noted by Colliers’ in its latest Asia Market Snapshot research report covering the first three months of Q1 in Thailand.
Narin Phumviwattanasirikul reported: “We forecast that Thailand’s GDP should grow in the range of 3 percent to 4 percent due to slowing export growth and weakening domestic consumption.
Narin, as with other market watchers and analysts, noted the oversupply of low- to mid-range condominiums in some parts of Bangkok as a result of lower consumer confidence and a high rate of mortgage-loan rejection, currently around 30 percent.
“Major developers have scaled down their plans for new-condominium development and are emphasising town house and single house developments instead. The supply of high-end condominiums is quite limited due to the scarcity of land in prime areas.
“Land prices downtown and along the sky train increased by around 5 percent,” Narin added.
Looking at the commercial sector, Naris reported: “It is a landlord’s market for office buildings. Investors continue to show demand for existing office buildings yielding between 5 percent to 6 percent.
“Merger and acquisition activity in the hospitality sector has picked up, with quite a number of transactions. We anticipate that REITs will drive more investment transactions in both the office and hospitality sectors in 2015.”
Terence Tang, Managing Director of Capital Markets and Investment Services, Asia, for Colliers, said: “We noted several notable key trends across Asia.
“The office-investment market in several key Asian cities remains active in 2015, underpinned by high occupancy rates and steadily improving rental rates.
“To cope with rising funding costs, investors are increasingly moving away from core investments and turning to value-add opportunities that can provide better mid- to long-term capital growth.
Tang added that outbound Asian investors continued to show an unwavering preference for Grade ‘A’ offices in the core business districts of gateway cities such as New York, London, Sydney and Melbourne.
Colliers Q1 Asia Marker Snapshot report can be downloaded here.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
