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Sustainable Development Not Only Responsible But Also Profitable

25 Dec 2016

His Majesty King Bhumibol Adulyadej’s Sufficiency Economy Theory has always had a focus on Thailand’s agricultural industry; however, fundamental principles that form the foundation of the theory apply to all industries. The Sufficiency Economy is a philosophy that emphasizes three principles that include moderation, reasonableness and self-immunity/sufficiency together in conjunction with the conditions of knowledge and morality. This philosophy addresses development challenges that society faces to create sustainable and self-sufficient lives. With the sufficiency mindset, people will live moderately, reasonably, and self-sufficient; therefore, they will not overexploit or abuse the environment or natural resources. They will embrace the environment, conserve it for the future and live in harmony with nature. Much is owed to King Bhumibol for the modernisation and economic growth that Thailand has enjoyed over the past 70 years in large part thanks to his hands-on approach to sustainable economic growth in agriculture.

From a recent survey conducted by the National Statistics Organisation of Thailand, Bangkok's population is now estimated at roughly 13.7 million in the Bangkok Metropolitan Region. In 1950, the population of Bangkok was roughly 1.4 million. This rise in population has not only increased the demand for accommodation across all property sectors, but has also greatly stressed the transportation infrastructure of Bangkok’s central business district (CBD) and the outlying suburbs. With ever increasing demand for space, buildings have been built where land used to exist with single-detached houses and yards. The rapid growth has meant that available prime land locations have been acquired by developers competing for the best remaining spaces to build their new projects. In Bangkok’s CBD, this trend has more than doubled the cost of housing since 2003. According to records from CBRE, the condominium market will grow from just over 100,000 units in 2003 to over 650,000 units by 2017. The average price per square metre for high-end condominiums and above (which makes up most of the CBD condominium market) has increased from approximately THB 80,000 - 100,000 in 2004 to THB 220,000 - 250,000 or more as of mid-2016. As urbanisation continues, city planners and developers must give concern to the impacts that their projects will have on the city.

A recent case study published by the Journal of Financial Management of Property and Construction in the UK set out to find empirical data to determine the effects of public open spaces on house prices. The study concluded that public open spaces had the greatest value adding effect on cluster homes and apartments. Sales values for these two property types increased by 42% and 49% respectively which represents a capitalisation of nearby public space into increased property values. The research also shows that prospective buyers and residents appreciate the function of open green space, specifically for high density residential such as apartments/condominiums and cluster homes. The article concluded that due to the value impact of green space on residential property, the government should make appropriate decisions regarding the provision of these public goods and design more effective zoning and land-use regulations as city planners learn how residents value open areas.

Sustainable built environments mean quality design and construction with forward thinking innovations that lead to energy savings and more healthy living environments. As buyers become more educated on the impacts of energy efficiency and healthy living, they are placing importance on amenities such as green and/or park space and proximity to lifestyle centres when making purchasing decisions which translates to monetary value-adds for builders. As a result, developers have begun designing their projects through a lens of “place-making” which addresses the need for designing developments that allow people to work, socialise, exercise, and rest in one place so they can travel less and increase their quality of life. It is a community-oriented approach to designing the built environment. Two master planned projects currently in the pipeline include the Iconsiam retail and residence mixed-use project, currently under construction, and Whizdom 101, which is in development.

Iconsiam will offer residential space next to its retail space, a park area, and a riverside boardwalk. Whizdom 101 is a mega project currently being developed by Magnolias Development Group. The project is planned to be constructed on 43 rai (6.88 hectares) around Sukhumvit 101 and will contain office, residential, retail, park, and health and fitness areas.

As development continues, it is important to remember His Majesty’s philosophy of moderateness, sufficiency, and long term sustainability. Long-term sustainability is not only economically practical, but, in many cases, giving forethought into creating environmentally friendlier and efficient designs increases quality of life for the city or building’s occupants. By strategically designing parks into city planning from the beginning, municipalities can enjoy the increased tax revenue created by increased property values thanks to the proximity of green areas. Buyers are attracted to well designed, comfortable, and healthy living spaces and lifestyles. As a result, they will pay more for that benefit. Furthermore, high-quality design and construction will also result in lower cost of maintenance of over the long term and that will generate greater margins for property owners.

Government planners and private sector developers do not only affect the way the city looks, they also shape culture because built space impacts where and how we interface with the environment around us. So it can be said that the builders of a city become the architects of society. Healthy living spaces are as important as efficient building design and as people become more aware, they will choose spaces that can provide a better quality of life in all areas of their daily lives. Much attention has been given to creating sustainable and environmentally friendly designs recently in Thailand and will be a leading trend in all property sectors over the next ten years as planners and developers analyse how to develop new spaces and redevelop aging spaces. The philosophy of King Bhumibol on sufficiency and sustainable approaches is what brought Thailand to the point it is today, and it is the same long-term planning and foresight that will see this nation continue to grow into the future.

This is a special article written by Aliwassa Pathnadabutr, Managing Director of CBRE Thailand for Bangkok Post’s Spectrum dated 25 December 2016.