CBRE Thailand has released its predictions for the real estate sector in 2023. According to the international property consultant, the outlook for both the economy and the real estate industry is positive.
According to the international property consultant, the real estate sector in Thailand is expected to see a gradual recovery in 2023. In this article, we outline CBRE’s predictions for the key trends in residential, office, retail, industrial and logistics, and hotel sectors in Thailand and what we can expect to see in 2023.
Residential Sector Trends: CBRE predicts that developers will be more active in launching low-rise housing projects that target domestic real demand. Buyers showed a preference for low-rise housing, which offers larger, adaptable spaces with lower density. Residential developers are expected to combine residential and commercial elements in mixed-use projects, which can cater to the increasing demand for convenience and accessibility in the residential market. Meanwhile, foreign buyers — whether Chinese, Russian, or crypto investors — are joining the residential market with global buyers particularly focused on the luxury segment.
Office Sector Trends: CBRE also expects more leasing activity in 2023 with Thai companies committing to relocating from buildings they have occupied for over 20 years to embrace hybrid working. Multinational companies (MNCs) have made progress in reviewing their future office needs, and some have committed to relocating to new premium grade A office spaces. This trend is expected to continue in 2023 as companies prioritize high-quality, flexible office spaces that can support remote working and collaboration.
Retail Sector Trends: CBRE predicts that customers will demonstrate the importance of bricks and mortar and offline retailing in 2023. Landlords will renovate older centers to create fresher, more modern environments, while landlords and retailers will find new ways to collaborate for mutual benefit. In-store promotions, on-site events, and new retail experiences are expected to attract shoppers. This means that retailers will have to find new ways to engage with customers and provide unique experiences to attract foot traffic.
Industrial and Logistics Sector Trends: The demand for industrial land is expected to continue in 2023, and developers will expand existing industrial estates and develop new ones to keep pace with demand due to the continuation of the China Plus One policy. Thailand is well placed to attract more FDI in support of growing industries such as data centers, semiconductors, and vehicle manufacturers – both traditional and electric. This growth in the industrial and logistics sector will contribute to the overall growth of the economy and the real estate industry in Thailand.
Hotel Sector Trends: The tourism sector enters 2023 with optimism and the expectation of building on improved hotel performance and inbound international arrivals. CBRE research indicates that over 10,000 hotel rooms are planned to be completed by the end of 2025, which will increase the supply of hotel keys in Bangkok by 12%. Hotel owners and operators will be focusing on hotel cost controls, long-term ESG strategies, investments in technology, and staff retention. This means that hotel operators will be looking for ways to improve their operations and reduce costs while also providing high-quality experiences for their guests.
Capital Markets Sector Trends: Developers will be open to joint venture partnerships, with Japanese groups continuing to have a positive outlook toward Thailand. An example of this is the continued investment by Mitsubishi in conjunction with AP Thailand. Large-scale mixed-use projects either under development or in the planning phase may seek joint ventures or new sources of capital as domestic lenders are expected to remain cautious. This means that developers will be looking for new ways to finance their projects and that there will be more opportunities for foreign investors to invest in the real estate industry in Thailand.
Bottom line
CBRE Thailand’s predictions for the real estate sector in 2023 are positive, with a gradual recovery expected. This is in line with other taking a positive outlook on Thai real estate in 2023. Developers will be more active in launching low-rise housing projects that target domestic real demand. There will be more leasing activity and demand for industrial land.
The retail sector will witness a greater degree of cooperation between landlords and tenants, while customers continue to demonstrate the importance of bricks and mortar and offline retailing. Hotel owners and operators will focus on hotel cost controls, ESG strategies, and investments in technology and staff retention. These trends indicate that the real estate industry in Thailand will continue to grow and attract investment in 2023.
Developers will be more active in launching low-rise housing projects that target domestic real demand. Buyers showed a preference for low-rise housing, which offers larger, adaptable spaces with lower density. Residential developers are expected to combine residential and commercial elements in mixed-use projects.
Office Sector Trends
Multinational companies (MNCs) have made progress in reviewing their future office needs, and some have committed to relocating to new premium grade A office spaces. CBRE expects more leasing activity in 2023 with Thai companies committing to relocating from buildings they have occupied for over 20 years to embrace hybrid working.
Retail Sector Trends
CBRE expects customers to demonstrate the importance of bricks and mortar and offline retailing. Landlords will renovate older centers to create fresher, more modern environments, while landlords and retailers will find new ways to collaborate for mutual benefit. In-store promotions, on-site events, and new retail experiences are expected to attract shoppers.
Industrial and Logistics Sector Trends
Demand for industrial land will continue in 2023, and developers will expand existing industrial estates and develop new ones to keep pace with demand due to the continuation of the China Plus One policy. Thailand is well placed to attract more FDI in support of growing industries such as data centers, semiconductors, and vehicle manufacturers – both traditional and electric.
Hotel Sector Trends
The tourism sector enters 2023 with optimism and the expectation of building on the improved hotel performance and inbound international arrivals. CBRE research indicates that over 10,000 hotel rooms are planned to be completed by the end of 2025, which will increase the supply of hotel keys in Bangkok by 12%. Hotel owners and operators will be focusing on hotel cost controls, long-term ESG strategies, investments in technology, and staff retention.
Capital Markets Sector Trends
Developers will be open to joint venture partnerships, with Japanese groups continuing to have a positive outlook towards Thailand. Large-scale mixed-use projects either under development or in the planning phase may seek joint ventures or new sources of capital as domestic lenders are expected to remain cautious.
the real estate sector in Thailand is expected to see a gradual recovery in 2023, and developers will be more active in launching low-rise housing projects that target domestic real demand. With the positive outlook for the economy and real estate sector, there will be more leasing activity and demand for industrial land. Hotel owners and operators will focus on hotel cost controls, ESG strategies, and investments in technology and staff retention. The retail sector will witness a greater degree of cooperation between landlords and tenants, while customers continue to demonstrate the importance of bricks and mortar and offline retailing.
https://www.cbre.co.th/insights/reports/2023-thailand-market-outlook-report#download-report
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