BANGKOK Q1 2021 - REAL ESTATE TIMES - Edmund Tie
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
REAL ESTATE
TIMES
APRIL 2021
BANGKOK Q1 2021
Vaccination and government support
position Thailand for economic recovery
ECONOMY – HEADLINE
KEY HIGHLIGHTS
GROSS DOMESTIC PRODUCT (GDP) PRIVATE & GOVERNMENT
CONSUMPTION EXPENDITURE
Q4 2020 Q3 2020 Private Government
-4.2% -6.4% Consumption Expenditure Consumption Expenditure
+0.9% +1.9%
PRIVATE & PUBLIC INVESTMENT EXPORTS OF GOODS & SERVICES
Private Investment Q4 2020 Q3 2020
-3.3% Public Investment -21.4% -23.3%
+0.6%
Source: Office of the National Economic and Social Development Council Source: Office of the National Economic and Social Development Council
EDMUND TIE RESEARCH 2
MARKET COMMENTARY MARKET OUTLOOK
• The Thai economy decreased by 4.2 per cent, • The mass vaccination program for global populations
improving from a contraction of 6.4 per cent in Q3. including Thai people as well as the country reopening
The improvement in Thailand GDP was attributed to to foreign visitors will hasten the return of foreign
expansions in private final consumption expenditure tourists which is the key factor for tourism and
and government final consumption expenditure, hospitality recovery. The worldwide vaccination
following the improvements in the investment and program will gradually regain travel confidence among
exports of goods. foreign visitors and Thai populations as the host of the
destination country.
• Private final consumption expenditure increased by 0.9
per cent, improving from a decrease of 0.6 per cent • The cabinet has approved low-interest loan programs
in Q3. The increased spending in non-durable and worth THB50 billion to assist informal workers and
net service items accelerated private consumption SMEs related to the tourism sector to alleviate debt
expenditure in Q4. shouldered by these groups. A flat interest rate of 0.1
per cent per month is applied to this loan program with
• Government final consumption expenditure expanded the grace period for repaying the principal and interest
by 1.9 per cent, a gradual expansion as compared to being extended from 6 months to 12 months.
2.5 per cent in Q3, mainly attributed to the rise in
compensation of employees and the increase in the • Another loan scheme with a total credit line of THB10
purchase of goods and services. billion has been approved by the Government Savings
Bank (GSB) to provide low-interest loans for tourism-
• Private investment decreased by 3.3 per cent, showing related businesses and those involved in the supply
an improvement when compared to a 10.6 per cent chains of the tourism sector.
decrease in Q3 2020. A major contributing factor for
improvement in the private investment was a lower • Key factors that will raise consumer spending and
contraction in machinery items, which was reduced by investment sentiment in Q2 and the remaining period
3.2 per cent, improving from a fall of 13.9 per cent in of 2021 include: 1) the government’s spending stimulus
Q3. Public investment also increased by 0.6 per cent and financial relief measures, 2) the wide coverage of
though at a smaller pace when compared to a 17.6 per Covid-19 vaccines and the quick implementation of
cent expansion in Q3. Public construction expanded by vaccination program in the country, 3) the ability of
2.9 per cent while public machinery items showed a 6.4 the state to contain the new wave of the pandemic
per cent decrease. crisis after the new clusters of infections were detected
in night-entertainment places in Bangkok to prevent
• Exports of goods and services decreased by 21.4 per more infections after Songkran festive season when
cent, a slight improvement when compared to the people travel across regions to visit their hometowns.
23.3 per cent decrease in Q3. Merchandise exports Additionally, the continuous financial support from
fell by 1.5 per cent, improving from a 7.5 per cent fall the government to individuals and SMEs in the form
in Q3, with the improvement mainly attributed to the of measures and relief packages is critical so that
expansion in exports of agricultural products. businesses can resume and move forward.
• According to EDMUND TIE Research, the direction of
the Thai economy in 2021 depends on several factors
including the government policies to revitalize tourism
and stimulate spending and investment through several
measurements, the efficiency of the state in containing
the fresh wave of the outbreak, the global economic
recovery, and the state’s management policy in
reopening the country to foreign tourists in the second
half of 2021. All these factors will help the country to
regain spending and investment confidence, and will
also draw fund inflows from the international market
into the country.
EDMUND TIE RESEARCH 3INVESTMENT – HEADLINE
KEY HIGHLIGHTS
INVESTMENT SALES (THB MILLION)
Q1 2021
39,632 Total investment deal in Thailand in
Q1 decreased by 59.8 per cent as
Q4 2020 compared to THB98.52bn in Q4 2020.
98,518
VALUE OF TOP 5 INVESTMENT DEALS (THB MILLION)
Q1 2021
29,831 The combined value of the top 5 investment deals in Q1, represented 75 per cent of total investment
value in Q1.
Q4 2020
70,205
Investment Transaction Buyer Seller Value (THB million)
Acquisition of ordinary shares Asset World Corporation TCCCL Woeng Nakhon Kasem 8,265.00
The construction project named 'The
Dhanarak Asset
Government Complex Commemorating His Sino-Thai Engineering Construction PLC. 6,245.69
Development
Majesty the King's 80th Birthday Anniversary
Building lease agreement Thana Group Building Owners 5,835.78
Investment in CentralMarina Project and
CPN REIT Management Central Pattana PLC. 5,672.00
CentralPlaza Lampang Project
1) Boon Rawd Brewery, 2) Whitefords
Investment in ordinary shares S.IF.Company Limited 3,813.00
United Pte.Ltd., 3) Prime Harvestment Ltd.
Total 29,831.47
Source: EDMUND TIE Research & The Stock Exchange of Thailand
EDMUND TIE RESEARCH 4MARKET COMMENTARY MARKET OUTLOOK
• Total investment deals in Thailand is valued at • The Thailand Board of Investment (BoI) has revealed
THB39.63bn in Q1, decreasing by 59.8 per cent as that it has approved the incentives for the private
compared to THB98.52bn in Q4 2020. The decrease in sector that get involved in the construction of a logistics
total investment value was attributed to the new wave and transport centre in Nakhon Phanom. The incentives
of the pandemic crisis that slowed investment decisions will be offered to an inland container depot project, a
in Q1. distribution centre project, and a project to construct
• The largest investment deal was the acquisition of buildings for industrial plants and warehouses.
ordinary shares in TCCCL Woeng Nakhon Kasem by • The government is ready to come up with proactive
Asset World Corp Public Company Limited with a total approaches to attract THB300bn in investment in
value of THB8.26bn. 2021. To achieve this target, online meetings are
• The second-largest investment deal with a value of continuously organized between the government
THB6.24bn was the construction contract signed and companies in targeted industries. The Eastern
between Sino-Thai Engineering & Construction Public Economic Corridor (EEC) hosts 12 targeted S-curve
Company Limited and Dhanarak Asset Development industries: car, smart electronics, affluent, medical and
Company Limited. The construction project named ‘The wellness tourism, agriculture and biotechnology, food,
Government Complex Commemorating His Majesty robotics for industry, logistics and aviation, biofuels
the King’s 80th Birthday Anniversary, 5th December, and biochemicals, digital, medical services, defence,
B.E.2550 (2007) Zone C, North Building. and education development.
• The third-largest deal was the building lease • The Thai Capital Market Organizations (FETCO) expects
agreements between Thanasiri Group Public Company fund inflows to return in the second half of this year as
Limited and the building owners for 3 years for use as corporate earnings outperform in line with the slow
Thanasiri Group’s headquarters building. The rental of recovery in the tourism-driven economy and sectors
the entire lease term of this agreement is THB5.84bn linked to the global economy.
throughout the agreement period. • The government has initiated the ‘Tour Tiew Thai’
• The fourth-largest deal was the investment in the stimulus project. Under this stimulus program, the
CentralMarina Project and CentralPlaza Lampang government will subsidise 40 per cent of package tour
Project by CPN REIT Management Company Limited at payments or up to THB5,000 per person. The package
a total value of THB5.67bn. In this regard, the leasehold must be booked for at least three days and two
rights over such properties have been completely nights and be worth a minimum price of THB12,500.
registered with the relevant land offices. The programme is for tours booked from Sunday to
Thursday. Tour agencies eligible for the program must
• The fifth-largest deal was the investment of S.IF. be registered in Thailand. The program is expected
Company Limited in acquiring 100.00% ordinary shares to boost revenues for tour guides, hotels, transport
of Park Industry Company Limited from Boon Rawd companies, restaurants and tourist sites.
Brewery Company Limited, 30.00% ordinary shares of
Angthong Power Company Limited from Whitefords • EDMUND TIE Research believes that factors
United Pte.Ltd., and at least 30.00% ordinary shares of accelerating investment sentiment in the remaining
B.Grimm Power (Ratchaburi) 1 Company Limited and period of 2021 will include: 1) the continuous release
B.Grimm Power (Ratchaburi) 2 Company Limited from of the government’s economic stimulus measures,
Prime Harvestment Limited. The total value of these 2) the state’s ability to contain the new wave of the
transactions was THB3.81bn. pandemic originating from the new clusters in nightlife
entertainment venues in Bangkok which was detected
in early of April 2021, 3) the effective implementation
of the vaccination program in the country, 4) no
political violence in the country, 5) the sufficiency of
vaccines supply and the wide distribution of Covid-19
vaccines to all countries in the world, and 6) the
country’s progress on infrastructure improvement that
will facilitate foreign investment.
EDMUND TIE RESEARCH 5OFFICE – HEADLINE
KEY HIGHLIGHTS
RENTAL IN PRIME CBD (THB / SQ M / MONTH) OCCUPANCY RATE OF PRIME CBD OFFICE SPACES
Q1 2021 The slight decline of rental in prime Q1 2021 The occupancy rate of prime CBD
THB 1,065 and secondary offices in the CBD
was due to the oversupply and the
90.85% office spaces had a slight quarter-
on-quarter decrease since more
Q4 2020 stricter cost control by businesses Q4 2020 companies adopting the practice
THB 1,070 due to the impact of Covid-19. 91.14% of working remotely.
SUPPLY – BANGKOK OFFICE SUPPLY (SQ M) NEW OFFICE SUPPLY IN CBD (SQ M)
Q1 2021 Completion of new office buildings
Q1 2021 There was no record of newly
8,947,014 in the area outside the CBD in Q1 4,812,930 completed CBD office building in
Q1 due to the delay in construction
contributed to the slight increase in
Q4 2020 Q4 2020 caused by strict movement order
office supply in Bangkok.
8,877,014 4,812,930 during the pandemic.
EDMUND TIE RESEARCH 6MARKET COMMENTARY MARKET OUTLOOK
• The completion of Rasa Two (NLA: 45,000 sq m) and • The completion of new office buildings in Q2 which
WHA Tower (NLA: 25,000 sq m) in the non-CBD area include ‘Vanissa Building’, ‘Kronos Sathorn Tower’,
increased the total supply by only 0.8 per cent in Q1. ‘Sixty-Six Tower’, and ‘Siam Scape’ will contribute a
There were no new completions in the CBD in Q1 and total of 90,808 sq m of new office space to the Bangkok
total office space remained unchanged at 4.81m sq m. office market. The new office space that will be opened
in the CBD area will account for 67 per cent of the total
• The work-from-home and cost-cutting policies which
new supply in Q2, whereas 33 per cent will be new
have been continuously deployed by companies since
office spaces in the area outside the CBD. Nevertheless,
the first outbreak of Covid-19 in 2020 resulted in the
new office buildings will be completed on time on the
requirement of businesses for the right size office
condition that there is no second announcement of
spaces that fit new and more flexible working styles of
Bangkok shutdown measurement.
most businesses. Since people can work remotely and
have a lower dependence on office space as compared • Business of all sizes is confronting the uncertainties
to the pre-COVID period, the average occupancy rate from the impact of the Covid-19 crisis so they are likely
of prime CBD office spaces was recorded at 90.85 per to spend very cautiously in Q2. New office buildings
cent in Q1, contracting at 0.3 per cent when compared that will be opened in Q2 and the huge new supply
to 91.14 per cent in Q4 2020. In the non-CBD area, the that is still in the pipeline and under the construction
average occupancy rate decreased from 90.02 per cent period will lead to an excessive supply situation in the
in Q4 2020 to 89.07 per cent in Q1. next few years. The occupancy rate in the office market
is forecasted to be weak since demand is slow, whereas
• The average asking rent of prime and secondary offices
supply has a dynamic increase.
in the CBD was recorded at THB1,065 per sq m per
month and THB765 per sq m per month respectively in • The average asking rent of the Bangkok office market in
Q1, having a slight decrease of 0.5 per cent and 0.6 per Q2 is anticipated to be flat or decline marginally. During
cent accordingly. The increasing supply at the time of the weak demand period, tenants could negotiate for
high sensitivity in demand has caused the office market attractive rentals from landlords.
to become a ‘tenant market’.
• Landlords are believed to cater office spaces that fit
the change in the working environment and business
environment. Realizing these changes, new prime office
buildings will provide co-living and co-learning spaces,
green space and an open area to support tenants for
new working style.
EDMUND TIE RESEARCH 7RETAIL – HEADLINE
KEY HIGHLIGHTS
RETAIL RENTAL (THB / SQ M / MONTH) VALUE OF TOP 5 INVESTMENT DEALS
(THB MILLION)
Q1 2021 The average rental rates of retail
Q1 2021
THB 1,910 malls in downtown and midtown 92.44% The average occupancy rate of
retail spaces in the downtown area
areas decreased by 2.05 per cent
Q4 2020 Q4 2020 decreased by 2.5 per cent.
and 2.65 per cent respectively in Q1.
THB 1,950 94.84%
SUPPLY OF RETAIL SPACES (SQ M) Upcoming Net Saleable Area
Location
Development (sq m)
New retail spaces in the downtown Silom Center 9,600 Silom Road
Q1 2021
are mostly in the form of mixed-use
1,494,199 development and scheduled to be
Siam Scape 29,795 Siam Square Soi 1
opened in Q2; therefore, retail supply
Q4 2020 New retail projects in the downtown area that will be
in the downtown area remained
1,494,199 unchanged at 1,494,199 sq m.
completed in Q2 comprise of ‘Silom Center’ and ‘Siam
Scape’, providing the net saleable area of 9,600 sq m and
29,795 sq m respectively.
EDMUND TIE RESEARCH 8MARKET COMMENTARY MARKET OUTLOOK
• In Q1, retail supply in the downtown and midtown • Prior to the new wave of the outbreak in Bangkok, the
areas remained unchanged at 1,494,199 sq m and Songkran Festival was expected to stimulate consumer
1,148,480 sq m respectively. spending and generate income for tourism operators
and local businesses during the holiday period. The
• The resurgence of Covid-19 in December 2020 put
recent pandemic situation will disappoint many
continuous pressure on Bangkok retail market in Q1.
businesses that were looking forward to the increased
Footfalls at shopping malls dropped drastically since
footfall during the Songkran holidays since now most
people stayed at home and avoided dining outside.
will cancel their travel plans . A possible exception will
The average occupancy rate of retail spaces in the
be those who plan to visit their hometowns during the
downtown area decreased to 92.44 per cent in Q1 as
holiday period to stay with their families. Therefore,
compared to 94.84 per cent in Q4 2020 or a decrease
it is expected that the footfall in several Bangkok
of 2.5 per cent.
shopping malls will drop and will result in a steady
• A Amid the concerns about the pandemic, the average occupancy rate in Q2.
government’s economic stimulus measures, financial
• Average rental rates of retail malls in Bangkok are
relief scheme (We Win Scheme), and the Covid-19
forecasted to be flat since landlords will adopt the
vaccination program in March 2021 has improved and
‘wait-and-see’ policy to monitor the current outbreak
stimulated consumer spending in late February 2021.
situation as well as its impact on tenants’ financial
• The average rental rates of retail malls in downtown circumstances. In case financial aids for tenants in the
and midtown areas in Q1 decreased to THB1,910 per form of rental waive or rental reduction is considered,
sq m per month and THB1,100 per sq m per month, it will likely not be in Q2 which is considered too early
equivalent to a contraction of 2.05 per cent and 2.65 for such measures.
per cent respectively as compared to rental rates in
• Despite the weak economic sentiment due to the
Q4 2020. The prolonged Covid-19 crisis in the country
impact of the Coronavirus, some local developers are
caused some small tenants to close down operations
planning to develop new retail projects mostly in the
as they were unable to bear the financial burden.
form of community malls. This is to maximise the utility
• All upcoming projects in Q2 will be found in the of the land after the outbreak is fully contained and
downtown area; these include ‘Silom Center’ (9,600 the spending power of people has improved. This is
sq m), and ‘Siam Scape’ (29,795 sq m). expected at earliest to be in late 2021.
EDMUND TIE RESEARCH 9RESIDENTIAL – HEADLINE
KEY HIGHLIGHTS
TAKE-UP RATE OF AVERAGE SELLING PRICE OF
NEW LAUNCHED CBD CONDOMINIUMS HIGH-END CONDOMINIUMS (THB / SQ M)
Q1 2021 The launch of new CBD projects near
Q1 2021
31.7% the end of the quarter (mid of March)
The launch of luxury condominiums
caused the selling period to be too 240,556 in the CBD area increased the
Q4 2020 short, resulting in the low take-up rate
average selling price in Q1 15.2 per
55.3% recorded in Q1. Q4 2020
cent as compared to THB208,807
208,807 per sq m in Q4.
SUPPLY OF NEW LAUNCHED CONDOMINIUMS PROPORTION OF NEW LAUNCHED
(UNITS) CONDOMINIUMS IN Q1 2021
The attempt to clear unsold stock
Q1 2021 by many developers, and the low
CBD The shortage of land in the CBD
1,963 spending and investment confidence 35% as well as developers’ strategies
due to the impact of Covid-19 caused to cater to the mass market have
Q4 2020 NON-CBD spurred new condominiums in the
developers to slash the number of
6,421 new condominium projects launched 65% non-CBD area.
in Q1.
EDMUND TIE RESEARCH 10MARKET COMMENTARY MARKET OUTLOOK • Total new launched condominiums in Q1 were recorded • Though the Covid-19 vaccination program has been at 1,963 units, decreasing at 69.4 per cent as compared progressively implemented in many countries including to 6,421 units in Q4 2020. On the year-on-year Thailand, the market may not rebound within the comparative, total new units launched had a decrease year due to the new wave of cases in many areas of at 73.2 per cent. The decrease of new condominiums Bangkok. However, the acquisition of new land plots supply was attributed to the developers’ plans to clear for future condominium developments by developers their unsold stock to generate incomes and increase is expected to continue, but the timeline for project their cash flow. The continuous attack of the pandemic development is expected to be delayed due to the crisis on the global and domestic economy has lowered work-from-home policy adopted by businesses and spending and investment confidence; therefore, many real estate developers. The acquired land plots are developers decided to slash the number of new strategically located along the routes of mass transit condominium projects and focus more on low-rise services, such as BTS, MRT, and Airport Rail Links which housing projects in 2021. is of prime interest to developers. • New condominiums launched in the CBD accounted for • Demand from real buyers is believed to remain healthy 694 units or 35 per cent of total new launched units in Q2. Realizing that many real demand buyers have in Q1 whereas those located in the non-CBD area low incomes, some developers will focus on low-priced represented 65 per cent (1,269 units). In Q1, ‘Noble or affordably-priced condominium projects this year to Form Thonglor’ and ‘Scope Promsri’ were the two new expand the customer base and generate income from luxury condominium projects unveiled. this market segment which is quite large. • The average take-up rate of CBD and non-CBD • The increase in new launches of high-end CBD condominiums launched in Q1 was 31.7 per cent and condominium projects is expected to be seen at the 24.7 per cent, respectively. The absorption rate of new end of this year, but this also depends on the state’s units in the CBD had a significant decrease as compared ability to cope with the new wave of cases in Bangkok to the take-up rate of 42.6 per cent recorded in Q4. and its vicinity. In addition, the Covid-19 vaccines that The launching period in mid of March 2021 (near the are currently arriving in-country and the increase in quarter-end period) caused the selling period of new the number of vaccinated individuals are predicted to units to be short. raise developers’ confidence in launching new high-end • Demand for new CBD condominiums was mainly driven projects and buyers’ confidence in spending. by speculative buyers. The location of newly launched • Developers with sound financial status are anticipated CBD condominiums which are in the Sukhumvit area still to continue looking for new land plots and to take attracted Thai and foreign speculative buyers (Chinese over suspended condominium projects that ran out of and Hong Kong) to make buying decisions. For those business due to the pandemic this year. The acquisition newly launched projects in the non-CBD area, demand of lands and buildings is likely to be found in the outer was generated by employees, families buying new units city of Bangkok, where mass transit lines are available. for their children to stay near schools and universities, and some locals buying for renting purpose. • Given that many real-demand buyers have low incomes and low spending power, some developers have offered condominiums at an affordable unit price of less than THB1,000,000 to fit the demand of this group. • The launch of luxury condominiums in the CBD area has accelerated the average selling price of CBD condominiums to THB240,556 per sq m in Q1, an increase of 15.2 per cent as compared to THB208,807 per sq m in Q4. EDMUND TIE RESEARCH 11
CONTACTS Ong Choon Fah
Chief Executive Officer
Christopher Ng
Chief Operating Officer
+65 6393 2318 EDMUND TIE Group
choonfah.ong@etcsea.com +65 6393 2376
christopher.ng@etcsea.com
Tan Chun Ming
Executive Director Punnee Sritanyalucksana
+65 6393 2360 Chief Operating Officer
chunming.tan@etcsea.com +66 2257 0499 ext 101
punnee.s@etcthailand.co.th
AGENCY SERVICES PROFESSIONAL SERVICES
Business Space & Retail Residential Research & Consulting
Apavadee Devahastin Na Ayudhya Pornpun Chalitkriengkrai Natacha Tienhiran
Director Director Senior Manager
+66 2257 0499 ext 109 +66 2257 0499 ext 130 +66 2257 0499 ext 122
apavadee.d@etcthailand.co.th pornpun.c@etcthailand.co.th natacha.t@etcthailand.co.th
Neeranuch Kanokvilairat
Investment Advisory Hospitality Manager
+66 2257 0499 ext 121
Pornpun Chalitkriengkrai Kwok Sai Kuai neeranuch.k@etcthailand.co.th
Director Executive Director
+66 2257 0499 ext 130 +65 6417 9229
pornpun.c@etcthailand.co.th saikuai.kwok@etcsea.com Valuation
Nuntharat Charoenpakdeekun
Director
+66 2257 0499 ext 112
nuntharat.c@etcthailand.co.th
Editor: Author:
Saleha Yusoff Neeranuch Kanokvilairat
Executive Director Manager
Regional Head of Research & Consulting
Research & Consulting +66 2257 0499 ext 121
+603 2161 7228 ext 302 neeranuch.k@etcthailand.co.th
saleha.yusoff@etcsea.com
Disclaimer: The information contained in this document and all accompanying presentations (the “Materials”) are approximates only, is subject to change
without prior notice, and is provided solely for general information purposes only. While all reasonable skill and care has been taken in the production of the
Materials, EDMUND TIE (the “Company”) make no representations or warranties, express or implied, regarding the completeness, accuracy, correctness,
reliability, suitability, or availability of the Materials, and the Company is under no obligation to subsequently correct it. You should not rely on the Materials
as a basis for making any legal, business, or any other decisions. Where you rely on the Materials, you do so at your own risk and shall hold the Company,
its employees, subsidiaries, related corporations, associates, and affiliates harmless to you to and any third parties to the fullest extent permitted by law for any losses,
damages, or harm arising directly or indirectly from your reliance on the Materials, including any liability arising out of or in connection with any fault or negligence. Any
disclosure, use, copying, dissemination, or circulation of the Materials is strictly prohibited, unless you have obtained prior consent from the Company, and have credited the
Company for the Materials. © EDMUND TIE 2021
Edmund Tie & Company (SEA) Pte Ltd
5 Shenton Way, #13-05 UIC Building, Singapore 068808.
T. +65 6293 3228 | F. +65 6298 9328 | mail.sg@etcsea.com | Please visit our website and follow us on
We are now on
Edmund Tie & Company (Thailand) Co., Ltd.
8th Floor Tonson Tower, 900 Ploenchit Road, Lumpini Pathumwan, Bangkok 10330 Thailand. Scan the QR code with
WeChat app to visit
T. +66 2257 0499 | F. +66 2257 0501 | mail@etcthailand.co.th | Please visit our website our WeChat account.You can also read
