Thailand

Overview

Thailand’s property outlook continues to remain very healthy, especially in the residential housing market and the office building sector, according to international property analysts. Thai property sector continues to show healthy trends and growth would remain positive in the near future.

There are many factors that are supporting the growth of the residential sector in Thailand. About 33% of the Thai population is aged between 25-44 years, which is a very good demographic for the domestic housing market, especially in the middle-end sector.

When compared with the figures for residential supply, it was only the high-end single detached housing segment that was close to the peak figure from before the 1997 Thailand crisis but in other sectors the level of supply was still low.

For the serviced apartment sector, the market remains competitive and competition will be strong, hence the supply of serviced apartments will increase by about 1,400 units for the 2004-2007 period.

Most developers are planning new projects mainly in the Sukumvit area of Bangkok, where demand is dominated by expatriates. However, the average occupancy rate will remain stable, including the rents in the central business district of Sukumvit while serviced apartment rents in the central Lumpini area will increase due to the limited supply there.

In regard to the office market in Bangkok, the situation is positive for developers but negative for tenants because demand continues to grow but supply is still very low, thus rents will tend to further rise.

We further project that about 280,000 sqm of office space will be added in the Business district of Bangkok in the years 2004-2007 while the average vacancy rate will continue to rise in most locations.

There is also strong growth in provinces such as Phuket, Chiang Mai, Krabi and Samui, which has increased competition for new sites and brands such as Ritz Carlton, Pitchon said.