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Thailand Property Industry Report - 2015

  • January 2016
  • -
  • Emerging Markets Direct Media Holdings
  • -
  • 31 pages

This report provides an overview of Thailand's property industry, covering the five core sectors - residential, industrial, office, retail and hotel. The report discusses market trends and outlook through 2015 and highlights key industry players including Land & Houses PCL, Pruksa Real Estate PCL, Quality Houses PCL and Amata Corporation PCL.



The overall Thai property market witnessed a dip in total property transaction by 2.5% y/y in 2014 as banks became strict in approving loans and political conflicts took a toll on the economy. Developers launched promotional campaigns and the government announced a stimulus package in late-2015 to help shift unsold completed residential units. However, the demand for condominium projects located along the mass transit stations and in Bangkok's central business district is still growing. The overall housing market looks to revive in 2015-16 as the government's stimulus measures will boost home sales and consumers' spending, especially in the low-to-middle range segment.



As the political situation has calmed and economic stability is slowly recovering, both consumer confidence and business sentiment are improving. As a result, the demand for prime residential, retail and office space should rise and support a continued increase in average rents and market yields.



The outlook for the Thai property market will largely depend on national political and economic stability as well as loan granting policies of financial institutions. The limited amount of space available in the most sought-after locations next to mass transit stations means that rents are likely to continue rising, although uncertain political environment and strict loan policies have been the major factors to slow demand.



Key Points:



o The overall residential market expanded by 4.8% y/y in 2014 to 133,479 units based on the number of new housing completed in Bangkok and its vicinity. In Jan-Sep 2015, the number of new registrations decreased 8.8% y/y to 86,760 units.



o Developers are cautious about launching new projects and clearing existing stocks has become a priority.



o The housing stock in Thailand has increased continuously over the years to a total of 24.1mn units in 2014, up 2.7% y/y.



o A steady level of demand and limited supply are increasing office rents by 4-10% y/y in all grades and areas.

Table Of Contents

Thailand Property Industry Report - 2015
1. Industry Profile

1.1Sector overview

1.2Residential sector

1.3Industrial sector

1.4Office sector

1.5Retail sector

1.6Hotel sector

1.7Rental market



2. Market Trends and Outlook

2.1Property regulations for foreign firms

2.2Real estate loans and housing loans

2.3Factors influencing Thai property market

2.3.1 Political conflicts and oil prices

2.3.2 Interest rates

2.3.3 Taxes

2.3.4 Construction costs

2.3.5 Unemployment rate and rising wage level

2.3.6 Volatility of the Thai baht

2.3.7 Mass transit and urbanisation



3. Leading Players and Comparative Matrix

3.1Leading players

3.1.1 Land and Houses Public Company Limited (LH)

3.1.2 Pruksa Real Estate PCL (PS)

3.1.3 Quality Houses Public Company Limited (QH)

3.1.4 Amata Corporation PCL (Amata)

3.2 Comparative matrix

3.3 SWOT analysis



4. Tables and Charts

Chart 1: SET Index vs Property Development Index (Oct 2009-Nov 2015)

Chart 2: Property transactions: value vs. no of cases (2004-2014)

Chart 3: 7-Year Annual property transaction by province

Chart 4: Completed housing units: Bangkok and vicinities (2005-9M2015)

Chart 5: Completed housing units by category (2014 and 9M2015)

Chart 6: Housing stocks by province (2008-2014)

Chart 7: Condominium unit supply in Bangkok by area (Q2/2015)

Chart 8: Industrial sector situation (2005-Q3/2015)

Chart 9: International tourist arrivals (2010-Oct 2015)

Chart 10: Bangkok office rental rates by grade (2012-Q3/2015)

Chart 11: Real estate: total loans vs. non-performing loans (Q3/2011-Q3/2015)

Chart 12: Total housing loans provided by financial institutions (Q3/2011-Q3/2015)

Chart 13: Breakdown of housing loans by financial institutions (Sep 2015)

Chart 14: Retail fuel prices (Oct 2010-Oct 2015)

Chart 15: Minimum loan rate vs. inflation rate (CPI) (Nov 2012-Nov 2015)

Chart 16: Home construction cost index (Sep 2012-Sep 2015)

Chart 17: Thailand unemployment rate (2005-Q3/2015)

Chart 18: Average monthly wage (Oct 2012-Oct 2015)

Chart 19: THB vs. USD (Nov 2010-Nov 2015)

Chart 20: LH real estate revenue by segment 2014

Chart 21: PS housing bookings and units transferred (2010-2014)

Chart 22: QH revenue structure by business segment 2014

Chart 23: Amata's industrial land sales performance (2010-2014)



Table 1: Industrial land price (THB mn / Rai)

Table 2: Principal office location in Bangkok

Table 3: Office supply, take-up and occupancy rate in Bangkok (Q3/2015)

Table 4: Retail supply, take-up and occupancy rate in Bangkok (Q3/2015)

Table 5: Cost of buying a property in Thailand

Table 6: Summary of tax rates for the property sector

Table 7: LH five-year financial highlights

Table 8: PS five-year financial highlights

Table 9: QH five-year financial highlights

Table 10: AMATA five-year financial highlights

Table 11: Selected peer comparison of key financial ratios

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