Thailand Property Industry Report - 2015

January 5, 2016

This report provides an overview of Thailand’s property industry, covering the five core sectors – residential, industrial, office, retail and hotel. The report discusses market trends and outlook through 2015 and highlights key industry players including Land & Houses PCL, Pruksa Real Estate PCL, Quality Houses PCL and Amata Corporation PCL.

The overall Thai property market witnessed a dip in total property transaction by 2.5% y/y in 2014 as banks became strict in approving loans and political conflicts took a toll on the economy. Developers launched promotional campaigns and the government announced a stimulus package in late-2015 to help shift unsold completed residential units. However, the demand for condominium projects located along the mass transit stations and in Bangkok’s central business district is still growing. The overall housing market looks to revive in 2015-16 as the government’s stimulus measures will boost home sales and consumers’ spending, especially in the low-to-middle range segment.

As the political situation has calmed and economic stability is slowly recovering, both consumer confidence and business sentiment are improving. As a result, the demand for prime residential, retail and office space should rise and support a continued increase in average rents and market yields.

The outlook for the Thai property market will largely depend on national political and economic stability as well as loan granting policies of financial institutions. The limited amount of space available in the most sought-after locations next to mass transit stations means that rents are likely to continue rising, although uncertain political environment and strict loan policies have been the major factors to slow demand.

Key Points:

• The overall residential market expanded by 4.8% y/y in 2014 to 133,479 units based on the number of new housing completed in Bangkok and its vicinity. In Jan-Sep 2015, the number of new registrations decreased 8.8% y/y to 86,760 units.

• Developers are cautious about launching new projects and clearing existing stocks has become a priority.

• The housing stock in Thailand has increased continuously over the years to a total of 24.1mn units in 2014, up 2.7% y/y.

• A steady level of demand and limited supply are increasing office rents by 4-10% y/y in all grades and areas.

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