Archive for January, 2011

Bangkok Retail Market Report Year End 2010

January 25, 2011

The retail market in Bangkok remained resilient in 2010 against the backdrop of the troubles in April and May, according the latest report from the Colliers International Thailand. Rentals remained stable over the year and th ere was even a slight uptick in occupancy in all areas.  Around 185,000 sq m of retail space was added to supply in 2010 and in Q4 five community malls came online adding approximately 38,000 sq m. Although these community malls are small in size they represent an increasing feature of people’s daily lives, according to Patima Jeerapaet, Managing Director of Colliers. “They fit into the pattern of condominium development around the city”, he pointed out. “They are also beneficial to the environment as they reduce the need to drive long distances to shop”, he added.

The big story for 2010 was the sale of Carrefour’s hypermarkets to Big C, another hypermarket chain. This will create something approaching a duopoly and the high price recorded for the sale reflects the new reality for the retail sector in Bangkok’s urban area, contends Antony Picon, Senior Manager for Research at Colliers. “Impending legislation restricting large scale retail development in the centre of the city will lead to existing retail centres having a premium attached to them”, he said. Mr Picon believes that the Carrefour episode is unlikely to be last. “Developers are likely to scramble for these increasingly prized assets”, he added.

Future supply for 2011 is expected to be just shy of 300,000 sq m based on current projections. However one of the key stories over the next few years is the renovation of existing centres. Mr Picon referred to the total difference in design of retail centres now and those that are decades old. “Modern centres have designs that entice people to move up its levels by allowing them to see what is above, where older centres just have straight forward ceilings that block the views of the uppers floors”, he explained. Mr Picon pointed out that older retail centres need to be refurbished in order to maintain their customer base. “When a new centre is placed alongside a much older one the difference in appeal can be stark, so developers have no choice but to upgrade in order to remain competitive” he said.

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RICS Thailand announces the new appointment of new Chairman and office bearers (2011-2012)

January 22, 2011

RICS (Royal Institution of Chartered Surveyors) announced today the new Chairman and office bearers for its Thailand board were elected on 13 January, 2011 (Thursday) for a one year term of office with immediate effect.  

Patima Jeerapaet, PhD, MRICS, MVAT, MTVA, is Managing Director of CIT (Colliers International Thailand) Property Consultants Co Ltd, a global real estate services firm equipped with more than 23 years of knowledge of Thailand’s property market.  In addition, he also chairs the Property Committee of Joint Foreign Chamber of Commerce in Thailand (JFCCT) in monitoring and enhancing Thailand’s property industry’s competitiveness.  He also serves as board member of Thai-Singapore Chamber of Commerce and Thai-Swedish Chamber of Commerce to promote Thai properties to Singapore and Swedish investors. 

The newly elected office bearers and members of Thailand Board are as follows: 

Major Office bearers:
Chairman:       Patima Jeerapaet
Honorary Treasurer: Navaporn Wongurai
Honorary Secretary:   Nicholas Brown
Elected Members: Apibarn Ariyakulkarn
Roy Beevor
Sonthaya Vanichvatana
Janet Geddes

Ian Hamilton

Simon Landy

C P Leong

Sutee Sumatanonsak

 Dr Patima Jeerapaet, the first Thai elected as Chairman of RICS Thailand, says “I am honoured to take up the post and hope to build on the achievements of Ian Hamilton and the executive team.  Having built a presence in Thailand for more than ten years, RICS Thailand has over 100 Chartered Surveyors practicing in the country.  I foresee the market of Thailand will continue to grow and become one of the key markets in South East Asia. I am looking forward to further strengthen membership services locally and create a strong RICS brand by working closely with fellow board members and staff of RICS.” 

About RICS & RICS Asia  

RICS (Royal Institution of Chartered Surveyors) is an independent professional body originally established in the UK by Royal Charter. Since 1868, RICS has been committed to setting and upholding the highest standards of excellence and integrity – providing impartial, authoritative advice on key issues affecting businesses and society. 

RICS is the worlds’ leading qualification when it comes to professional standards in land, property and construction. With over 150,000 members globally, RICS represents, regulates and promotes the work of property professionals throughout 146 countries. 

RICS Asia supports a network of over 11,000 individual professionals across the Asia region with an objective to help develop the property and construction markets in these countries, by introducing professional standards, best practice and international experience. It promotes RICS and its members as the natural advisors on all property matters. It also ensures that services and career development opportunities are provided to members. 

RICS Asia region covers national associations and local groups locating in Brunei, Malaysia, Singapore, Thailand, The People’s Republic of China and the SAR Hong Kong. It also has members working across the region such as Bangladesh, Bhutan, Burma/Myanmar, Cambodia, Indonesia, Japan, Kiribati, Laos PDR, Macao, Mongolia, Nepal, North Korea, South Korea, Taiwan, The Maldives, The Philippines, Timor East and Vietnam.

Investing in Thai property market, be ready for the big changes, AEC 2015!!

January 17, 2011

Thailand’s property market is considered one of the major business sectors in Thailand which is inevitably on the boom with the economical development of the country.

Thailand has passed its turbulences in year 2010 which is considered one of the most difficult years in the Thai history as well as for businesses in all sectors. Surprisingly, despite the political turbulence, many huge deals were closed during 2010.  In fact, some property investment sales did hit the highest record.  This is an indication of high confidence in the property sector as investing in a property is a long term investment.

The property market is mainly categorized into 5 different sectors which includes: industrial, commercial, residential, retail and hospitality.  But when property is talked or discussed about, the general public will most likely perceive on the residential market or condominiums. So, what about the property market in Thailand? Will prices go up in 2011?  Is there really scarcity of land? Is it equilibrium for the property market and what will happen in 2011?

We have so many questions on our minds. There is no doubt that prices of property along the BTS or MRT lines will increase continuously because of the limited amount of land and the high demand.  This is a scarcity amongst developers because these are considered the prime locations.  However in the future, should these lines expand, I believe that land along the extended lines would then become more attractive for developers. 

For year 2011 – the right defined statement would be “Certainty is uncertainty”. We should be ready to surf the changing wave if there is any!! We should plan for uncertainty and be ready to apply all strategies for each challenge and each circumstance.

Judging from the Q4, 2010, I would view the Thai property marketing in each sector for below for 2011.

Industrial
Many key industrial estate developers were able to achieve their targets in 2010.  The overall industrial market seemed to have improved and growth is expected by 10% in 2011, especially in manufacturing, automobile and parts, electronics and IT businesses.  There are also more demand from foreign and local manufacturers for the expansion of industrial estates. The many concern for the industrial sector would be Environment Impact Assessment (EIA) and Health Impact Assessment (HIA).

Commercial
The office market has improved slightly especially for Grade B office buildings because of the extended mass transit.  Many office buildings outside the CBD seem to attract interest from Tenants as well.  Within the CBD, many office buildings are adopting the trend of renovating their office buildings with a more modern look to retain existing tenants as well as attract new tenants. 
Where Regional Operating Headquarter (ROH) is concerned, no clear movement can be seen as yet but can expect to see results with 2011.  This year should be a brighter year for the office market. 

Residential
The overall residential market in 2010 mainly condominium was on the rise.  In 2011, this will rather be stable.  Condominium prices ranging between 80,000 – 120,000 baht per square meter will still be available within the city while on the outskirts prices would range between 50,000 – 75,000 baht per square meter.  Upper-end condominiums for foreign investment have slowed down because of the strong Thai currency there are still some investors who look for quality products at bargained prices.  This year we can expect for developers to gear their interest to building town houses or detached houses along the new mass transit extension lines.

Retail
The retail market has shown continuous improvement.  Local demand continue to grow strongly but for tourists, this might be a little hesitant because of the strong Thai currency.  There are many newly launched retail projects, for example supporting retail space in residential projects and community malls along the new mass transit lines.

Many big retailers and department stores are also adopting the trend to renovating / face lift / re-branding their stores to attract shoppers both in the capital and upcountry.  There are also a number of new shopping centers which is likely to be completed in 2011.

Hospitality
For hotels industry in 2011, we can expect that there will be approximately 1,662 new rooms for the upper scale and luxury hotel.  Hotel investors look for long term investment.  Please do not perceive this to be an oversupply because the expected payback period for hotel investors in between 10 – 12 years.  Hotel investors invest with an objective for capital gain in the future.  The low labor costs, low material costs and low import cost since 2010 are striving hotel investors to seize the opportunity for construction.

Like other businesses, the property market also has its life cycle. Certain properties within the main business and shopping areas are also starting to rejuvenate their assets such as properties within the Sam Yan area of Chulalongkorn University properties, Bangkok Bazaar and Langsuan of Crown Property Bureau, some old shop house projects along Sukhumvit Roads and other main roads.

Nevertheless, there is another sector that the locals should look into as another choice of property investment.  This is the agricultural sector which is rather sensitive, complex and controversial with regards to property rights and cultural rights.  This is an opportunity for the local property investors and is a way for life’s sustainability as well.

Another major change in the Thai property market we look towards in 2011, is the possibility of leasehold extension that will encourage and assist Thai developers, Thai investors as well as foreign investors in their property investment.  This will also bring in foreign direct investment into the country.

Looking a little bit further, the major change in 2015 would be the Asian Economic Community (AEC) which will positively impact the property market in all sectors as well as transportation and logistics. The high speed trains from China and the roads connecting countries will hugely benefit Thailand.  AEC will open up businesses amongst the Asian countries.  Geographically with Thailand in the center of many countries, Thailand will have a larger distribution channel.  The public may be scared of over supply of condominiums but once AEC is introduced this will no longer be on ‘over supply’ as we will have more demand for residential.  There will be a higher possibility and opportunities for Commercial, Industrial, Retail and Hospitality sectors as well..

Some of the property investment tips are:
1. Aim for best price, high return with low risks
2. Be well aware of the rules & regulations
3. Select for good location
Use them wisely and they could make you rich. 

Dr. Patima Jeerapaet is the Managing Director of Colliers International Thailand
Please feel free to drop your comments or questions to patima.jeerapaet@colliers.com