Southeast Asia Outlook 2023

THAILAND: BANGKOK MA R K E T S NA P S H OT

MARKET STATISTICS

RESIDENTIAL (LUXURY NON LANDED)

OFFICE (CBD GRADE A)

RETAIL (CBD GRADE A)

LOGISTICS (WAREHOUSE)

HOTELS (BANGKOK)

$3.06

$0.41

Avg. Daily Rate: $103

Rents Q4 2022 (USD psf pm) 2023 Forecast

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ECONOMY

2023 Vacancy Forecast

The Thai economy is expected to expand up to 3.7% in 2023, following a 2.6% growth in 2022. This growth will be fuelled by the full return of international tourism, increased private consumption, further export resilience and strong manufacturing industries benefiting from Thailand’s pro-investment incentives. The country is seeing itself move up the value chain in Asia Pacific’s supply chain and is experiencing inbound investment as companies seek to diversify their supply chains and production networks. The Bank of Thailand is forecasting headline inflation to average at 3.0% in 2023, compared to the 2022 average of 6.5%. The policy rate increased to 1.25% at the end of 2022 then up to 1.50% in January 2023, up from 0.5% at the beginning of 2022. Base interest rates are expected to rise to 2% by the end of 2023.

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Capital Value Outlook

INVESTMENT OPPORTUNITIES

1. HOTEL: The hotel business will enjoy a steadily improving outlook over the next year. The number of foreign arrivals will build at an accelerating rate with 25.5 million arrivals expected in 2023. Local investors are seeking opportunities to acquire independent hotels suitable for conversion, repositioning and offering to large operators, while foreign capital continues to enter the market primarily through joint ventures with local groups. This trend is expected to continue across Thailand, especially in prime tourist provinces where trends such as wellness and medical tourism are becoming more prominent, as groups seek to offer differentiated products to get ahead in the market. 2. INDUSTRIAL: The industrial and logistics sector is one of the primary engines driving the country’s economy. Thailand and specifically the EEC area is becoming a preferred location for multinational companies as supply chain

conditions. High technology sectors including electric vehicle production, automobile parts, electronics, healthcare, pharmaceuticals, and IT are growing as Thailand varies its manufacturing footprint and climbs the value chain. 3. INDUSTRIAL-DATA CENTRES: This up and-coming asset class has seen growth over the last 24 months with the country seeing increased public and private cloud migration, internet dependency, and demands for increased bandwidth. Thailand has 108 MW of potential IT load currently planned or under construction as local players further establish themselves in market, and international operators capitalise on I-EAT and Thai Board of Investment incentives, such as CIT exemptions, and the ability to own land. Demand for eligible land is strong. Operators and investors are proactively seeking partnerships with local groups with access to land in Bangkok, Samut Prakan and the EEC area.

RECENT SIGNIFICANT DEALS

PROPERTY NAME

PROPERTY TYPE

PRICE (MIL USD)

CITY

BUYER

SELLER

DATE

Land on Wireless Road

Swire Properties (Minority)

HKR International

Development Land

Bangkok

70.9

Q1 2023

Choengmon Real Estate Company Limited

Kimpton Koh Samui

Surat Thani

Liu Chong Hing Inv

Hotel

73.5

Q4 2021

Source: RCA, Cushman & Wakefield Research

diversification continues, owing to strong infrastructure and favourable investment

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Southeast Asia Outlook 2023: Bouncing Back Stronger | 24