Bangkok Condo Finder Property Round Up – June 2015
Welcome To Bangkok Condo Finder’s June Roundup!This month we talk about the vibrant investment market and how major business’ are investing, even though there is a slump in the GDP numbers. We also look into the power that the BTS and MRT have over Bangkok and lastly we have a quick glance at Thailand’s continuing infrastructure plans over the next few years.
Posted by Bangkok Condo Finder on Thursday, July 2, 2015
Welcome to the Bangkok Condo Finder Property Round Up – June 2015
National infrastructure development, the Bangkok BTS and MRT-related condominium market, the strong hotel investment sector, and some restructuring within two of Thailand’s major companies formed the business highlights of the last month.
On 27 March this year the cabinet approved a 1.91 trillion baht eight-year infrastructure development plan. There are three key planks to this plan involving metre-gauge rail network expansion, national highway expansion and further improvements and expansion of the mass transit facilities available in Bangkok.
This is the biggest and most expensive series of infrastructure development to be undertaken in the history of Thailand.
The government has said its priority is six double-track metre-gauge lines with construction starting between 2018 and 2019 and due for completion in 2020.
Both Japanese and Chinese firms are the front-runners to build many of these infrastructure projects.
Figures currently available for the first quarter of this year regarding real estate development in Bangkok have shown 85 percent of all condominium units launched this year were near existing, under-construction and planned BTS or MRT lines.
Land values are expected to increase by anywhere from 10 to 15 percent over the next year or so even though there are some areas where mass transit lines will not become operational for some years to come.
Savvy developers with good cash flows have recognized that they could buy up big now and will be sitting on a profit just in the unimproved land values over the next few years.
As land becomes scarce in the most desirable areas, it is suggested a new trend may emerge with developers looking to buy old buildings to use for developing a new condominium.
With tourism recovering strongly, real estate investors, both local and foreign, have contributed to a solid and steady rise across Thailand’s hotel industry.
According to figures released by the Hotels and Hospitality Group of Jones Lang LaSalle, the value of hotel transactions in 2014 in Thailand hit 13.9 billion baht, the equivalent of 5.7 percent of all transactions in the Asia-Pacific region.
According to JLL, since 2012 around 42 percent of buyers of hotel properties in Thailand have been international investors.
Not surprisingly, Bangkok is easily Thailand’s most popular hotel investment destination, since it has consistently rated among the most popular cities in the world as a tourist destination.
Two of Thailand’s biggest companies, TCC Land and Singha Corporation, unveiled major changes to their operations, while also revealing their longer-term faith in the fundamentals of the economy.
TCC Land formed two separate subsidiaries to focus on its retail and leisure businesses, the main aim being to increase the overall management efficiency of the group.
Singha Estate, the property developer overseen by the Singha Corporation announced plans to invest more than 100 billion baht between this year and 2019.
The company plans to look into a variety of property types from housing estates to condominiums, hotels, offices, industrial estates, warehouses, and shopping malls.