The recent political instability has been and is likely to remain, bad news for Thailand's economy. BMI is looking for GDP to start rising again in 2010, after contracting by around 3% during 2009. However, this growth is being driven by government consumption (thanks to the 'Strong Thailand 2012' stimulus package) and, probably, greater household spending. We note that measured unemployment remains low, but caution that this may be depressed by numbers of otherwise jobless industrial workers who have returned to work in their home villages in rural Thailand. Meanwhile, foreign investor sentiment towards the country remains bleak.
Even if there were no political crisis, the various protagonists in Thailand's commercial real estate sector would face challenging times. The basic problem, affecting all three sub-sectors, is one of gross oversupply of rentable space relative to demand. Our sources indicate that the vacancy rate in Bangkok's office sub-sector is around 35%. The city's luxury hotels face competition from condominiums that have been converted into Serviced Apartments. Elsewhere, the effective supply of office space has been swollen by businesses operating from homes.
Meanwhile, new projects continue to be completed. The inescapable conclusion is that, in much of Thailand, pressure on commercial rents will continue to be downwards. Our in-country sources are looking for rental rates to increase by 5-10% in all sub-sectors over the coming year. We think that this is over-optimistic. Looking further, we anticipate that yields will rise as rents rise by more (or fall by less) than capital values. The divergent movements in yields in the three cities for which we have gathered data - Bangkok, Rayong and Pattaya-Chonburi - suggest that market participants are reacting in different ways to profoundly challenging conditions.
Interviews with our in-country sources were conducted in late January and early February 2010, and again in mid-2010.
Key Features Of This Report
This is the latest edition of a new series of industry reports published by BMI that seeks to identify the key dynamics of the real estate sectors of 44 countries around the world, some of which are developed and some of which are, in every sense, emerging markets. Once again, the questions that we seek to answer for each country remain as follows: What are the main issues that will matter to actors in and around real estate development in the country concerned, both over the long and the short term? What are the main constraints that they face? What are the key insights that one garners when one compares the real estate sector of the country concerned with its peers in other countries?
In Q3 we have introduced a very substantial new improvement to the reports. We have incorporated data and qualitative observations provided to us by commercial real estate agents operating in the countries we survey. As a result we have gained a much clearer picture of the balance between demand and supply in each of three main sub-sectors - office, retail and industrial. We have also introduced a new approach to the forecasting of rental yields, which is discussed in the methodology sector of this report.
In Q4, we have incorporated a lot of new data in relation to rents and yields in 2010. We gained this data by way of a new round of interviews with our in-country sources in mid-2010. In some cases, the latest information from our sources has caused us to make significant revisions to our forecasts for 2011-2014. We asked our sources to indicate what growth in rents is likely for 2011. We explain their answers in the Forecast Scenarios.
For more information or to purchase this report, go to:
- http://www.fastmr.com/
Partial Table of Contents:
Executive Summary
SWOT Analysis
- Thailand Real Estate/Construction SWOT
- Thailand Economic SWOT
- Thailand Business Environment SWOT
Regional Real Estate Overview
- Table: Asia Pacific's Office Markets At A Glance - Rents, 2009-2011 (US$ per square metre per month)
- Table: Asia Pacific's Retail Markets At A Glance - Rents, 2009-2011 (US$ per square metre per month)
- Table: Asia Pacific's Industrial Markets At A Glance - Rents, 2009-2011 (US$ per square metre per month)
Real Estate Market Overview
- Table: Thailand's Real Estate Market - Rentals, 2008 And 2009 (mSQ/month, THB)
- Table: Thailand's Real Estate Market - Net Yield, 2008 And 2009 (%)
- Table: Thailand's Real Estate Market - Terms Of Contract/Lease
- Table: Thailand's Real Estate Market - Available And Vacant Space (m2)
Forecast Scenario
- Real Estate Outlook
- Table: Thailand Real Estate Markets - Rentals in mSQ/month (THB)
- Table: Thailand Real Estate Markets - Forecast Net Yield (%)
- Construction Industry Outlook
- Table: Economic And Construction Data
- Thailand's Macroeconomic Outlook
- Table: Thailand - Economic Activity, 2007-2014
Business Environment
- Real Estate/Construction Business Environment Ratings
- Table: Asia Real Estate/Construction Business Environment Ratings
- Thailand's RECBER
- Asia Pacific Project Finance Ratings
- Table: Design And Construction Rating
- Table: Commissioning And Operating Rating
- Table: Overall Project Finance Rating
- Thailand's Business Environment
- Table: BMI Business And Operational Risk Ratings
- Table: BMI Legal Framework Ratings
- Table: Annual FDI Inflows Into Asia, 2006-2008
- Table: BMI Trade Ratings
- Table: Thailand's Top Export Destinations, 2001-2008 (US$mn)
Company Monitor
- Central Pattana (CPN)
- Land and Houses
- Raimon Land
- Rasa Property Development
- Saudi Oger
- TCC Capital Land
BMI Methodology
- How We Generate Our Industry Forecasts
- Construction Industry
- Bank Lending
- Real Estate/Construction Business Environment Rating
- Table: Weighting Of Indicators
- Project Finance Ratings Indicators
- Table: Design And Construction Phase
-
Full Table of Contents is available at:
-- http://www.fastmr.com/
About Business Monitor International
Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports.View more research from Business Monitor International at http://www.fastmr.com/
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.
