Jones Lang LaSalle confident of expansion in commercial property
Property consultant Jones Lang LaSalle (JLL) is predicting an expansion in Thailand’s commercial property sector in 2024 thanks to four trends that are either emerging or ongoing in the kingdom and the Southeast Asian region.
Michael Glancy, JLL’s managing director for Thailand, defined the first trend as emerging megaprojects that will attract investors, multinational companies and foreign skilled personnel to relocate to Thailand.
“This trend has driven property developers in Bangkok to engage in more than 10 mixed-use projects of world-class standard,” he said. “These projects will add grade A office space of over 900,000 square metres, 300,000 sqm of shopping malls, 5,400 luxury condo units and nearly 6,000 hotel rooms in CBD areas by 2028.”
Glancy said the second is the renovation of old buildings in Bangkok into premium commercial properties. A survey by the company found that more than 60% of office buildings in the metropolitan area are over 20 years old and will require renovation to meet market demand.
Aging asset renovation will however be a challenge for developers as they will need to cater to the changing needs of tenants while trying to preserve the occupation rate, he said, adding that this trend could also expand to other kinds of commercial buildings including warehouses, logistics centres and hotels.
The third trend in the property sector is the ESG concept, in which developers are following international standards in environmental, social and corporate governance. “These standards, such as LEED (Leadership in Energy and Environmental Design) and the WELL Building Standard are driving factors for multinational corporations to choose office space and logistics facilities to complete their ESG requirements,” he said. “In the past five years, buildings that are ESG certified have attracted up to 14% higher rental fees than those of the same level but without certificates.”
The last trend that JLL believes will help boost the commercial property sector is the ongoing foreign direct investment in Thailand, which is one of the country’s key economic drivers.
Glancy noted that in 2023, over 65% of rental office space in Thailand was rented to foreign companies, while foreign customers contributed to over 10% of all condominium transfers in the Bangkok metropolitan area.
“Under this trend, competitiveness can be further boosted by government’s policies to attract foreign investors and buyers, such as tax breaks and extension of rental contracts for certain types of properties,” he said.
