In the eyes of the majority of Asia-Pacific professional property investors, Bangkok has become a less attractive destination for 2016.
The Thai capital, was ranked as the 19th most-attractive destinations got investment and 16th for development has, according to the Emerging Trends in Real Estate Asia-Pacific 2016 survey, witnessed its political instability act as a disincentive for international investors. In addition, slowing economic growth combined with the recent instability in the Thai baht as capital moves out of the country in anticipation of U.S. interest rate hikes has done nothing to increase confidence, the report noted.
Historically Bangkok was last ranked 19th – its lowest position in the annual survey, in 2010 and has fallen from an impressive 6th place as recently as 2013.
Few interviewees in the survey indicated any interest in Thailand-based investments. That said, domestic liquidity remains high, and both capital values and cap rates in the office sector have continued to tighten steadily.
With vacancies remaining low and relatively little new supply expected in the near term, this seems set to continue.
On the residential side, the luxury market continues to see good demand, especially from foreign buyers, with record prices achieved for both land and condominiums.
At the mid-market level, however, transactions have remained slow due mainly to oversupply and high levels of household debt.
Tourist arrivals were down in 2014 as a result of political conflicts that led ultimately to the military coup, but have rebounded significantly in 2015 with numbers up 25 percent year-on-year by the middle of the year. Increased tourism from China is the main reason for this.
Occupancy rates have therefore recovered, although substantial new supply is expected in the hotel sector by the end of the year.
The Emerging Trends in Real Estate Asia-Pacific 2016 survey is a joint undertaking between PwC and the Urban Land Institute. It is based on personal interviews with, and surveys from, almost 350 of the most influential leaders in the real estate industry.
