DEMAND for condominiums, offices, and retail space in Bangkok has continued to grow in the first half of this year, according to the research by property agency Colliers International Thailand.
In particular, new projects continue to be launched in the condominium market, demand for office space from multinational and local companies is also growing. Meanwhile, the occupancy rate in the retail sector stands at 100 per cent in many shopping centres, the company’s deputy managing director Sunchai Kooakachai said at a press conference on Monday .
In the first half of 2017, the Bangkok office space market continued to grow from 2016, he said.
The average occupancy rate for office space is approximately 92 per cent, with new office buildings completed in the past two years achieving high occupancy rates and are almost 100 per cent occupied. Many new office buildings are still under construction meaning the office market is still attracting attention from both Thai and foreign investors. The continued rise in land prices is the major factor impacting the expansion of office supply. But many mixed-use projects are under construction on leased land plots in the Bangkok CBD, and office space is part of most of these projects. Rental rates have increased in past few quarters and are continuing to rise, especially in many Grade A buildings where monthly rents are higher than Bt1,000 per square metre. The office market will continue to grow this year and rental rates will also continue to increase in the future.”
Meanwhile, shopping malls are the highest expanding category in recent years in terms of area, while community malls are increasing every year but at a slower rate compared to previous years. This downturn has been a result of many community malls not being successful and finding it harder to maintain their business level during the past couple of years. Main developers in the retail business sector plan to expand or increase their new shopping malls and have renovation plans for some old retail centres, Sunchai said.
For Bangkok’s residential market, Surachet Kongcheep, the company’s associate director of research said that approximately 13,600 new condominium units were launched in the second quarter of 2017, an increase from the first quarter of around 30 per cent. In addition, the condominium market will continue to expand in the second half of 2017, with total new condominium units to be launched in 2017 reaching approximately 45,000 units, an increase of about 15 per cent from 2016.
The property market in the past year or two has seen slower growth, but there are still no major problems. Although the Bangkok condominium market has a huge supply still available in some locations, many new projects are still opening for sale in various locations. All developers have tried to find the opportunity in the current market and try to develop new projects that are suitable for existing demand and purchasing power. But some developers have postponed launching new projects this year and are looking for the market to recover first. They mostly want to wait for the royal cremation ceremonies in October to pass.
Meanwhile, other sectors are still continuing to grow since both the office and the retail markets are long-term businesses, Surachet added.