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Bangkok Property Market Improved in Q4 2009

By on Mar 23, 2010 in Research

Bangkok Overall MarketView Q4 2009

Both the economy and the property market improved in the fourth quarter of 2009.

In the condominium sector developers focused on one bedroom units. LPN and Supalai both publicly listed developers sold over 4,000 condominium units in projects launched in one weekend in November. At the same time
there are developments being completed that still have unsold inventory.

The office market remained weak. Grade A CBD Rents fell by 7.8% over 2009 despite little new supply.

The Industrial sector saw land sales of 901 rai (356.13 acres) for the whole of 2009 and investor confidence was shaken by the halting of 76 new projects at the Map Ta Phut Industrial Estate because the original permit procedure
omitted a Health Impact Assessment required by the constitution.

Retail sales improved in the fourth quarter and there is limited future supply.

Tourist arrivals improved significantly in fact international passenger disembarkations at Suvarnnabhumi Airport only fell by 4% compared to 2008.

Hotel supply continued to increase and there are still more developments being planned.

Serviced apartments faced pressure from increased supply as well as hotels.

We did not see a mass exodus of expatriates and so the residential rental sector remained steady.

In terms of capital transactions one office building CIMB Tower was sold to local investor and residential developers continued to acquire both central and midtown sites.

Housing

In Q4 we saw an increase of 44% Q-o-Q in SDH land allocation permits from the Land Department up from 1,187 to 1,706 and it increased 46% Y-o-Y. There were 34 permits with a total of 6,386 units that received land allocation permits.

The SRT Light Red Line ( Bangsue – Taling Chan) is now under construction. This will increase demand the projects around western area. Furthermore, construction has begun on the MRT Purple Line ( Bangyai – Bangsue ). The housing projects around western area will benefit from this but maximum impact will be on completion.

Overall sales performance of TH projects also improved. All segments for townhouses and SDH have sold over half of their units, while most of newly launched projects have an average of 20%-40% sold of total units.

This is an extract from Bangkok Overall Marketview Q4 2009.  V isit CB Richard Ellis Research to download full report.

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