What’s in store for Bangkok real estate in 2018?

Bangkok’s real estate market has witnessed tremendous growth over the last five years. Since 2013, more than 300,000 new condo units have been launched, 1.3 million square metres of new retail space has opened and nearly 800,000 sqm of new office space has completed, not to mention healthy growth in the hospitality and logistics sectors.

In 2018, the underlying drivers of the recent growth cycle are changing and creating new challenges for the market’s leading players. Property consultancy JLL reveals some of the trends that are shaping the Bangkok real estate market this year.

Andrew Gulbrandson, Head of Research at JLL, says “Rapidly rising land costs continue to represent a significant challenge for the market today. The recent annual increases around the market of 10-15% per year are pushing developers in new directions.”

With only a handful of except…

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Thai Airbnb hosts served more than 1.2 million guest in 2017

Thai Airbnb hosts have served more than 1.2 million guest arrivals over the past 12 months and earned 4 billion baht.

 

Airbnb’s head of public policy for Southeast Asia, said the Thai host community earned a combined US$119 million (4 billion baht) in supplemental income from February 2017 to February 2018. Ms Goh said the 1.2 million guests represent 66% year-on-year growth in arrivals.

She attributed the growth to the increasing acceptance of the hospitality platform among Thais as an opportunity to earn extra income and welcome guests from around the world.

“There are over 61,400 listings in Thailand on Airbnb, and the median host income averages $2,100 or 67,000 baht annually,” Ms Goh said.

Bangkok and Phuket contributed more than half of host earnings and guest arrivals over the past 12 months. Airbnb hosts in Bangkok earned 1.1 billion baht by sharing their homes with 485,000 guests.

In Phuket, the stro…

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Sovereign wealth funds get comfortable with real estate investment

Already a significant player in the real estate space, sovereign wealth funds (SWFs) are set to further increase their allocation to real estate.

Preferred sectors include core office and retail assets as well as open-ended funds and listed REITs (real estate investment trusts) with allocations to steadily increase over the foreseeable future.

According to PwC, sovereign investors held US$11.3 trillion in 2015, a figure that’s predicted to grow to US$15.3 trillion by 2020. In 2015, 59 percent of sovereign wealth funds invested in real estate. By 2017, this share has reached 63 percent.

SWF’s allocations to alternatives – which includes real estate and infrastructure – have increased significantly across most portfolios, according to Nick Wilson, from JLL’s Asia Pacific Capital Markets Research team, noting that drivers include low correlation to traditional asset classes, such as equities and fixed income, and the potential for high risk-adjusted return…

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Proptech 3.0 : How drones, data and AI are changing the property sector 

A drone the size of one’s palm buzzes 50 metres up a skyscraper in downtown Singapore. Tracing the contours of the building, the machine scans for cracks and records the temperature of the building’s façade as it makes its ascent.

Sitting in a room 5 kilometres away, a man sees a live feed from the drone’s camera on his desktop screen. He analyses the data and combines it with information collected from hundreds of other buildings.

Welcome to proptech 3.0 – the convergence of property and technology – where autonomous drones, big data and artificial intelligence (AI) come together to transform the property sector.

I’ve been in real estate my entire career – and it is clear to me that much is changing, and changing fast. For instance, instead of sending property managers out to buildings to manually inspect them and log the findings, the job can now be done by smart robots capable of carrying out each task with lightning precision.

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2017 in review: Top real estate trends

As we approach the end of 2017, here’s a look back at the most significant real estate trends that have shaped the real estate landscape – and are likely to flow through to 2018.

1. Proptech

A convergence of property and technology: proptech has changed the way we use real estate. From data analytics to artificial intelligence, the Internet of Things, virtual reality and blockchain; proptech’s influence has been so pervasive that it’s virtually what we breathe here in JLL.

As part of JLL’s Power Up: Proptech drive, we held our first hackathon in Singapore in October where the firm selected innovators from across Asia Pacific to build new apps and technologies. Following that, we streamed our first learning session: “Will I have a job in five years?” which saw thousands of colleagues logging in and watching.

JLL kickstarted its proptech journey with the sponsorship of Southeast Asia’s first proptech hackathon, Hood Disrupt, in August. We sponsored and sp…

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Singaporean sovereign wealth fund Buys Tokyo Offices as Japan Upgrades Growth Forecast

Singaporean sovereign wealth fund, is acquiring a 43 percent stake in Shinjuku MAYNDS Tower, a 97,978 square metre Grade-A office property in Tokyo for 62.5 billion yen ($558 million), according to a press release from the fund yesterday.

The Shinjuku SWF deal came just one day after a real estate affiliate of Prudential Financial announced the acquisition of J Tower in Tokyo’s suburban neighborhood, as the latest in an $808 million dollar series of Japanese acquisitions by the company over the past 14 months.

The deals come during the same week that the Japanese government upgraded its outlook for economic growth in the world’s third-largest economy.

GIC, which manages over $100 billion in assets, in a statement called the Shinjuku MAYNDS Tower deal a unique opportunity for the fund to acquire a sizeable and stable income-producing asset

GIC Buys into Shinjuku

Lee Kok Sun of GIC

The Singapor…

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Bangkok average price of condominiums could grow at least 8% in 2018

The average price of condominiums could grow at least 8% in 2018, despite the looming land and buildings tax, says property consultant Nexus Property Marketing Co.

Managing director Nalinrat Chareonsuphong said the land and buildings tax, due to come into force in January 2019, is unlikely to harness the increase in land prices in Bangkok, allowing condo prices to keep rising.

“There is unlikely to be forced sales among landowners who are pressured by the land and buildings tax,” she said.

“If the tax is effective, they have options to apply to their assets anyway and will not need to sell the plots.”

As land prices will keep rising, condo prices will also rise next year. This year the average selling prices of new condos in Bangkok rose by 8% to 130,600 baht per square metre from 121,000 baht per sq m last year.

The average increase of condo prices in the past five years was 9% per year.

Pathumwan and Ratch…

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Thai Property executives accused of embezzlement

Four active and former executives of KC Property Company have been accused by the Securities Exchange Commission of embezzlement for allegedly issuing and selling the firm’s short-term BEs (bills of exchange) for their own benefits.

An informed SEC source said that the accusation against the four was made possible after the auditor had uncovered the illegal transactions made during September 2015 and October 2016 worth about 425 million baht.

The source said that the four suspects forged the company’s meeting minutes and opened bank accounts to receive money transfers from the sale of the BEs without recording the sale in the firm’s book.

Evidence about the case will be forwarded to the Anti-Money Laundering Office and the Department of Special Investigation for further investigations.

Earlier, KC Property Company defaulted the payment of its 3-month old BEs worth about 130 million baht with 7.5 percent interest rate after the payment was due on …

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Knight Frank Residential Research Report for Bangkok 2017

Total number of new supply in 1H 2017 increased 39% to 30,493 units compared to 21,927 units in 1H 2016.

On demand front, there were 27,275 condos sold in the first half of 2017, up 11.5% from the same timeframe in 2016. New launching supply in CBD, city fringe, and peripheral were accounted of 6%, 29%, and 65%, respectively.

Majority of the new developments are in lower-end to middle market segments and situated along new mass transit routes especially BTS Light Green Line Extension (Mo Chit – Kukot and Bearing – Samrong), MRT Pink Line (Kae Rai – Minburi), and SRT Dark Redd Line (Bang Sue – Rangsit).

Condominium projects launched in 1H 2017 recorded an average take-up rate of 75%, representing an increase of 1.7% compared to the first half of 2016.

However, certain projects commanding affordable pricing, attractive down-payment packages, exceptional amenities, and convenient locations were able to achieve higher sales within weeks of launch.  …

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