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News Release


Cautiously Optimistic Outlook for Bangkok Property Market in 2015

Whilst an ongoing dim economic outlook has overshadowed prospects in the Bangkok property market, JLL expects the market in 2015 to perform better than last year.

The Bangkok property market performed moderately well overall in 2014. Though all property sectors across the city were hit by the political turmoil in the first half of the year, conditions in most sectors picked up in the second half year as the political situation started stabilizing.  Whilst an ongoing dim economic outlook has overshadowed prospects in the Bangkok property market, JLL expects the market in 2015 to perform better than last year.

Mrs. Suphin Mechuchep, Managing Director of JLL, says: “The Bangkok property market was generally resilient in 2014. All of the property sectors JLL monitors, including offices, retail centres and luxury condominiums, continued to register growth in rents and selling prices.”

“Among a number of key factors that helped prevent these property sectors from crash in 2014 were a generally fair balance of supply and demand and the return of political stability in the second half of the year,” Mrs. Suphin explains.

There are a number of factors that make JLL optimistic about the outlook for 2015:

  • While the political situation has stabilised, the country’s reform roadmap should allow for more clarity in policy and the direction Thailand’s economy is heading, helping improve business sentiment and consumer confidence.
  • The government's stimulus package, spending and investment in infrastructure projects are expected to start showing impact on the country’s macro economy this year, and consequently boost demand in Bangkok’s different property sectors.
  • Economists anticipate interest rates to stay in a low regime in 2015. While this will benefit developers in all property sectors who rely on lending, low interest rates contribute greatly to affordability of home buyers.
  • Global oil prices have more than halved since June 2014 and, for the first time since 2009, Brent crude oil dipped below US$50 a barrel. While the reduction in oil prices will benefit the overall economy and indirectly the property industry, the residential and retail markets will benefit from improving household balance sheets, as energy costs absorb less consumer income.
  • Most major developers and investors have remained well-capitalised and showed strong appetite to acquire existing income-generating property assets or suitable land for new development.
  • Real Estate Investment Trusts (REITs) was introduced in 2014 to replace property funds. The new investment vehicle offers higher flexibility and efficiency. For example, REITs can wholly own a property holding business and invest in both ongoing and greenfield (with limitations) projects, and both domestic and foreign income generating properties. Furthermore, there are fewer limitations on REITs in terms of the types of assets that can be included. The transition to REITs is a significant positive step and should encourage future growth across the different property market sectors.
However, there is also a set of challenges, particularly with regards to Thailand’s economy which demand in most property sectors relies largely upon.
  • While Thailand’s GDP is forecast to grow by approximately 4% in 2015, economic uncertainty remains, due to a number of both internal and external factors such as the fragile global economic outlook.
  • High household debts will continue to confine the growth of demand for mid to low priced condominiums and houses.

2014 Snapshots:


In the office market, despite all the negative impacts from politics, rents continued to rise, thanks to limited new supply and continued demand.

According to JLL’s Thailand Property Intelligence Centre, the Bangkok office market registered a net take-up of 181,700 square metres in 2014, which is close to the average annual take-up rate of 197,700 for the past five years, and above the 10-year average of 150,000 square metres. In addition, the average office vacancy rate across the city fell from 10.0% at the end of 2013 to 9.2% at the end of 2014. Grade A office buildings in central business areas (CBA) saw a bigger improvement, declining from 9.0% to 6.1% over the same period. 

Declining vacancy rates allowed Bangkok’s market-wide office rents to rise by another 6.75% from baht 459 per square metre per month at the end 2013 to baht 490 per square metre per month at the end 2014. Grade A office rents in the CBA grew by 5.6% from baht 730 per square metre per month to baht 771 per square metre per month over the same period, while a number of prime Grade A buildings are fetching higher rents ranging between baht 850 and baht 1,400 per square metre per month.


The Bangkok retail market was one of the property sectors that were hit hardest by political turmoil and consequently a sharp drop in international tourists as well as softening economic conditions. 
Some prime shopping centres in the area that were blocked by anti-government protestors temporarily reduced rents to help retailers in the first five months of the year. 

However, conditions improved in the second half year with rents recovering and registering a 2.4% increase from the end of 2013 to baht 2,344 per square metre per month at the end of 2014. In addition, prime Grade retail centres have continued to enjoy low vacancy rates averaging 3.5%, reflecting strong fundamentals in the market.


The high-end condominium market with units priced at baht 150,000 per square metre and above saw no new projects launched in the first half of 2014, reflecting developers’ high concern over political uncertainty. As the political stabilized, the market saw 1,140 new units launched in the second half year, a similar amount of the total new launches in 2013. 

Despite high selling prices and strong competition in the leasing market, investors continue to purchase luxury condominiums. While these investors can expect low investment yields averaging 3.5%, their purchase decisions are based more on the hope of achieving capital gains in the short and long terms.

In most cases, when construction completes, prime condominiums in the CBA enjoy a 20% increase in prices from when they were offered for sale off-plan. In the long term, capital values of condos in the CBA are likely to rise further due to the less availability of land in prime areas for future development and a continued increase in land prices, which will push up prices in future condominium projects.