Bangkok property markets soften
Wednesday, 28 November 2007
According to recent data released by Jones Lang La Salle the Bangkok property market is less buoyant than last year due mainly to economic factors such as low levels of consumption and investment.
Thanks to strong market fundamentals, most of the property sectors have continued to expand over the past 12 months with rentals and capital values rising in some sectors, but the pace of this growth has slowed. "The recent passage of the new constitution by popular vote has lifted sentiment to a certain degree," said Dan Tantisunthorn, Head of Research for Jones Lang LaSalle in Thailand. "However we believe the property market will not see any significant activity before general elections are held and a new government is formed in 2008."
In the office sector, low net take-up of only 65,000 sqm in the first half of 2007 reflected weak confidence in the conditions for business.
In addition, the average rents of office space across Bangkok stayed flat for the first time since 2001, during the first half of 2007. Average Grade B rents declined marginally from THB 504 per sqm per month to THB 503 per sqm per month, whilst in the Grade A market in CBD, the average rental rose only slightly by 2.5 per cent over the same period to THB 666 per sqm per month.
The market for condos remained surprisingly resilient given low consumer confidence, with the percentage sold rising during the first half of 2007 to 74.3 per cent. The number of new launches remained high with over 5,400 units launched in the first half of 2007. However, most of these units were in mid-price projects, whereas the number of units launched in the high-end segment has slowed substantially, compared to the previous years.
Despite political uncertainties, the bombings around Bangkok on New Years Eve and waning consumer confidence, vacancy continued to contract as tenants moved into retail spaces completed in the latter half of 2006. However, the consumer confidence continues to sink, thus dampening prospects to the retail sector. As a result, the average net rent for prime ground-floor space in Central Bangkok dropped by 4.5 per cent from THB 1,914 per sqm per month at the end of 2006 to THB 1,830 per sqm per month in gross terms.
................................
Property-report.com
Thanks to strong market fundamentals, most of the property sectors have continued to expand over the past 12 months with rentals and capital values rising in some sectors, but the pace of this growth has slowed. "The recent passage of the new constitution by popular vote has lifted sentiment to a certain degree," said Dan Tantisunthorn, Head of Research for Jones Lang LaSalle in Thailand. "However we believe the property market will not see any significant activity before general elections are held and a new government is formed in 2008."
In the office sector, low net take-up of only 65,000 sqm in the first half of 2007 reflected weak confidence in the conditions for business.
In addition, the average rents of office space across Bangkok stayed flat for the first time since 2001, during the first half of 2007. Average Grade B rents declined marginally from THB 504 per sqm per month to THB 503 per sqm per month, whilst in the Grade A market in CBD, the average rental rose only slightly by 2.5 per cent over the same period to THB 666 per sqm per month.
The market for condos remained surprisingly resilient given low consumer confidence, with the percentage sold rising during the first half of 2007 to 74.3 per cent. The number of new launches remained high with over 5,400 units launched in the first half of 2007. However, most of these units were in mid-price projects, whereas the number of units launched in the high-end segment has slowed substantially, compared to the previous years.
Despite political uncertainties, the bombings around Bangkok on New Years Eve and waning consumer confidence, vacancy continued to contract as tenants moved into retail spaces completed in the latter half of 2006. However, the consumer confidence continues to sink, thus dampening prospects to the retail sector. As a result, the average net rent for prime ground-floor space in Central Bangkok dropped by 4.5 per cent from THB 1,914 per sqm per month at the end of 2006 to THB 1,830 per sqm per month in gross terms.
................................
Property-report.com