Demand for prime sites located in Bangkok’s Central Business District remains high despite the continuing stagnation of economic growth in Thailand, according to a report by CBRE Thailand. Demand for prime income producing properties continues to be strong as well, but there is very limited supply of sites and income producing properties being offered for sale in the city at the moment.
The report added that the second quarter saw condominium developers continue to focus their efforts in the downtown area of Bangkok where the market remains the strongest. SC Asset reportedly paid a record price of THB1.9 million per square wah for a site on Soi Chidlom. The company plans to develop a condominium project on the site. Sansiri also bought a prime site during the second quarter. The company purchased land on Sukhumvit 38 for an undisclosed price that it will use for the development of a high-rise condominium project.
Developers continue to compete for prime downtown sites where prices will only continue to rise. The best and, most profitable use, for these sites continues to be condominium development and it looks like this trend will continue.
Condominiums were also launched by developers in the midtown and suburban areas of Bangkok, but the rate of launches was much slower than in previous years. CBRE Thailand added it believes demand for midtown and suburban condominium development sites will continue to shrink.
The reported also noted Thai demand for income producing properties continues to increase as low interest rates for bank savings and government bonds makes the situation favorable to own these. However, only a few properties are being offered for sale.
Restrictions on foreign ownership are another reason the demand continues to be mostly local. Foreigners can only purchase properties in the Thai market through a minority holding in a joint venture unless they buy an individual condominium unit.
