Macquarie Securities’ Turnkey 2017 Outlook was released and while the report notes some uncertainty for Asia as a whole, the results for Thailand were much more positive. In particular, the residential and office sectors are predicted to remain strong while retail should be stable.
The report did not see Greater Bangkok facing an oversupply in 2017 with a number of projects being delayed this year. One of the main reasons developers chose to push back projects was so that they could focus on transferring units during the first half of the year.
Condo sales will likely make up more than 60 percent of total residential sales in Thailand next year, according to Macquarie’s research. The condo take-up rate is predicted to come in at 90 percent with lifestyle changes and new mass transit developments are among the most important factors for homebuyers in the country.
Bangkok’s office market continues to record high occupancy rates with rents also increasing. The report noted that more than one million square metres of office space is being planned in Bangkok with most developers having already secured sites for their developments in the CBD along Rama 4 road.
While the current market condition of low vacancy rates and rising rents should carry on due to the limited future supply in short terms with a reasonable level of demand. However, Macquarie’s research said there could be a shift in 2018 if all of the planned office developments come online at or near the same time.
In the retail sector, there are signs of a recovery, but it is a situation that remains fragile. The report predicted that competition in Bangkok’s retail market will continue to increase in 2017 but retail players will need to take note of changing consumer behaviour.
Several of the country’s major retail developers including Central Group and the Mall Group have already realised this and changed their strategy. This shift has seen them expand new projects and focus on renovating their existing malls as they try to maintain customer traffic and stay competitive in the retail market.
