Fri, December 03, 2021


Condo, office, shopping mall markets contract while demand grows for rental factories, warehouses

Most of the property markets in 2021, including condominiums, office space and shopping malls, are expected to contract due to the fallout from the Covid-19 pandemic, but the warehouse and factory rental markets will thrive due to rapid expansion of e-commerce, property experts said.

Nexus Property Marketing Ltd managing director Nalinrat Jaroensuphong said the condominium market in 2021 will continue to contract despite an increasing supply of new units – 33,000 to 38,000 – compared to 21,000 in 2020.

“This is due to about 20 projects postponing their openings from last year to this year,” he pointed out. “We estimate that the total condominium supply throughout the year will be 674,000 units.”

Nalinrat said new condo projects this year would focus on smaller units at cheaper prices to match the current economic situation and the trend of buying a home in outer Bangkok compared to buying a condo in the city.

“However, if the government opens the country to foreign tourists from the third quarter, the economy should start to recover and demand for condos should rise slowly,” he added.

Nexus estimates that most of the condominium projects to open this year will have starting prices of between Bt1.2 million and Bt2.5 million per unit, with the total sale price decreasing by 5 per cent, compared to 4 per cent in 2020.

Meanwhile, Nexus Real Estate Advisory Ltd managing director Theerawit Limthongsakul said demand for office space and space at shopping malls has declined since the first wave of Covid-19 last year as many companies still want their employees to work from home to avoid the risk of contracting the virus.

“Last year, office and commercial space occupancy dropped from 94 to 91 per cent, compared to over 95 per cent in the last 7-8 years before Covid-19,” he said.

“However, demand for rental factories and warehouses has been increasing for the past 4-5 years, thanks to the rapid growth of e-commerce,” he said.

“It is estimated that the rental factory and warehouse markets have available space of 4 million square metres each. Rented factories could generate income of Bt200/sqm/month, while rented warehouses could earn up to Bt150/sqm/month,” he added.

Published : January 14, 2021