In the recent Emerging Trends in Real Estate® Asia Pacific 2017 published by the Urban Land Institute and PwC, Bangalore and Mumbai were rated as having the best investment prospects, according to investors interviewed during the survey. Two Asean cities rounded out the top four with Manila and Ho Chi Minh City ranking as third and fourth.
Meanwhile, Bangkok returned to the top ten, finishing in ninth on this year’s list. This stops a downward trend for the Thai capital that had seen investors cool on the city’s prospects in recent years. The main reason Bangkok jumped up in the rankings was due to a search for higher yields that aren’t necessarily found in traditional safe havens such as Singapore, Tokyo and Australian cities.
The hospitality sector is one investors are keen on and even though recent transaction volumes have been weak, tourist arrivals continue to rise, mainly due to an increase in visitors from China. There has been strong growth in revenue per available room (RevPAR) while it was predicted that value-add properties will continue to be popular among investors who can easily upgrade old hotel stock found in the city.
The office sector is arguably the best performer in Bangkok with rents having increased steadily over the course of the past five years. The survey noted that this segment offers good long-term prospects in line with the Thai economy’s overall growth trajectory. New supply and absorption projections continue to look healthy and with grade A office yields in Bangkok recorded at just under 7 percent, there is a lot for investors to like.
However, there are some things that real estate investors will need to take a look at. Political instability continues to be a cause for concern in Thailand and has been for several years. The report explained that there seems little prospect of change in that regard in the near term. There good news is that the on going crisis seems to have little impact on day-to- day life or the business community.
