2019 is looking to be a year with significant changes in Bangkok’s property market, with growth anticipated to be slow in many sectors and increases in new supply.
The race for rare sites continues to be hot with increasing land prices and scarcity of freehold lands in prime locations. However, with new legislation coming, developers are choosing to step back to evaluate their position.
Tighter mortgage legislation and the recent upsurge in rates of interest from the Bank of Thailand will create challenges for condo developers in 2019. With increasing supply, doubt about household end-user demand plus some concerns about the sustainability of overseas demand, the future for the condo market is becoming more unclear.
In 2018, overall Bangkok office demand remained strong, continuing to result from both local and multinational businesses mainly relating to services and manufacturing industries.
BaanHunt believes, as more companies adopt agile office environments, occupiers will be putting more employees in less space that may bring about a reduced total office net take-up.
E-commerce will remain one of the primary focal points for the retail industry in 2019. As e-commerce dominates the global retail landscape, bricks-and-mortar stores are compelled to increase their online profile, leveraging exclusivity in-store, and providing goods and services that are difficult to replicate online.
In terms of the RBFs market in 2019, the overall supply is anticipated to remain steady with a continued drop in vacancy rates as existing factories are leased or sold to manufacturers. The demand for RBFs may also be influenced by the impact of trade uncertainty in 2019. More developers are gravitating towards a Build-to-Suit strategy, which is made to customer’s specific requirements with increased lease terms of 10 to 15 years.
Weaker domestic demand could lead to developers being more selective in purchasing development sites for both residential and commercial developments. This may decelerate the surge in land prices aside from highly desired CBD locations in large part due to their scarcity.
Baanhunt expects to see more land acquisition initially in 2020 when the new Bangkok City Plan and Land and Property Tax are anticipated} to enter into effect.