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News Release


What’s in store for Bangkok real estate in 2018?

Developers are taking various strategies to pursue growth objectives

Bangkok / 8 March 2018 – Bangkok's real estate market has witnessed tremendous growth over the last five years. Since 2013, more than 300,000 new condo units have been launched, 1.3 million square metres of new retail space has opened and nearly 800,000 sqm of new office space has completed, not to mention healthy growth in the hospitality and logistics sectors. In 2018, the underlying drivers of the recent growth cycle are changing and creating new challenges for the market's leading players. Property consultancy JLL reveals some of the trends that are shaping the Bangkok real estate market this year. 


Andrew Gulbrandson, Head of Research at JLL, says "Rapidly rising land costs continue to represent a significant challenge for the market today. The recent annual increases around the market of 10-15% per year are pushing developers in new directions."


With only a handful of exceptions, it is no longer financially feasible to acquire new freehold land in the city centre for office, hospitality or retail uses. As a result, many investors are seeking opportunities to secure long-term leases for new commercial and hospitality development.


"Asides from rising land costs, there are numerous other challenges facing investors in certain market sectors, one of which is intensifying competition. To ensure success, and indeed the happiness of shareholders in many cases, market leaders are taking a variety of steps as they pursue growth objectives," says Mr. Gulbrandson.


He explains that while the trend of residential developers moving to higher priced products that target both local and foreign buyers with higher liquidity exemplifies the case well, the most prolific growth strategy being adopted by local players is entering into joint venture (JV) partnerships, in many cases with foreign investors.


According to JLL's Thailand Property Intelligence Centre, the total value of JV investment has exceeded THB 570 billion since 2013. Entering into such partnerships allows both parties to mutually benefit by diversifying risk and by sharing knowledge and technical resources. Similarly, there has been a substantial wave of new merger and acquisition (M&A) activity in recent years, a total of THB 170 billion since 2013, according to JLL data.


Aside from JV and M&A activity, many leading domestic residential developers are actively sourcing new opportunities in non-core market sectors. Examples include Ananda Development launching several new hospitality projects, Origin Property looking to enter both the serviced apartment and office markets, Major Development and Raimon Land announcing noteworthy investments in the office market.


A few bold market leaders including Ananda, Sansiri and Central Pattana (CPN) are making strategic inroads in technology and lifestyles brands. Initiatives include establishing supportive ecosystems and corporate venture capital (CVC) teams such as Ananda UrbanTech and SiriVentures aimed largely at growing "proptech" start-ups and investment in complementary lifestyle products including magazines and hotel operators. At the same time, CPN and Central Group are bolstering their digital capabilities by entering into strategic partnerships with heavyweights like from China to maintain a competitive edge.


"As Thai investors seek to diversify, a handful are looking for opportunities outside of Thailand. Investors with strong hospitality experience such as Minor Group, Central Plaza Hotel (Centara) and Singha Estate are likely to continue overseas expansion efforts as are industrial leaders like Amata and Frasers Property. That said we expect that most local players will continue to deploy all of their capital in Thailand," says Mr. Gulbrandson. 


A snapshot of Bangkok's real estate market outlook for 2018


The office market should remain very healthy. At present, vacancy rates are near all-time lows and average rents are at all-time highs. While there are 240,000 sqm of new for-lease space scheduled for delivery in 2018, more than one-third of the space has already been pre-leased and we expect leasing efforts to continue to be successful as most projects are well located and of good quality. While vacancy rates will fluctuate as new supply completes, levels should remain near historic lows. Furthermore, JLL expects that rents will continue increasing at a moderate pace. There has been a handful of new office project announcements in the pipeline for 2018, however the firm does not expect any new large-scale plans to be put forward.



Thailand welcomed more than 35 million international tourists in 2017 with official forecasts suggesting an increase to 37-38 million in 2018. With about half of these visitors making their way through Bangkok, record tourism arrivals are supporting all-time high occupancy and average room rates across hotel segments. While nearly 4,000 keys of new supply are scheduled for completion in 2018, the largest number since 2012, we expect continued strong performance in every segment.



The retail market is showing signs of life but challenges remain, particularly burdensome household debt levels. Bright spots include recent healthy rental growth across CPN's shopping centre portfolio, and more broadly, robust same-store sales growth at Big C and 7-Eleven – the latter two being key bellwethers of domestic consumer spending. We expect a handful of new greenfield shopping centre announcements in Greater Bangkok in 2018 from leading players like CPN and Siam Future, leveraging opportunities in both fast-growing suburban areas and in underserved urban areas, however we expect a significant portion of investment to continue targeting asset enhancement initiatives. In terms of new supply in 2018, all eyes are on ICONSIAM, the only large-scale retail destination scheduled to open this year. ICONSIAM will not only bring Thailand's first Apple Store to market, a destination in its own right, but more importantly, a wide range of cultural destinations equally attractive to Thais and foreign visitors, leaving its performance to be closely watched. 



Bangkok's condominium market will continue to face challenges amid intensifying competition and dwindling mass market domestic investor liquidity. Developers will need to exercise extreme caution when securing new development sites to ensure that the location, product and positioning of each new project is tailored to specific target demographics – long gone are the days of selling out within a few days of launch when singular factors such as proximity to BTS or developer brand reputation could propel sales. JLL expects to see residential developers continue to ramp up overseas sales and marketing efforts to buoy new project sales as well as continued investment in other asset classes to diversify risk.


JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. A Fortune 500 company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. In 2017, JLL had revenue of $7.9 billion and fee revenue of $6.7 billion; managed 423 million square meters; and completed investment sales, acquisitions and finance transactions of approximately $170 billion. At the end of 2017, JLL had nearly 300 corporate offices, operations in over 80 countries and a global workforce of 82,000. As of December 31, 2017, LaSalle had $58.1 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit


In Thailand, JLL started its operation in 1990 and today is the country's largest international property services firm with 1,600 employees and more than five million square metres of property and corporate facilities managed. In Euromoney Real Estate Survey 2017, JLL was voted as Thailand's number one overall real estate advisor for the seventh consecutive year and also won top votes for Research and Valuation for the third consecutive year.