Residential: There is still demand in the market but with lower budget. Developers will be focusing on developing smaller scale development with low number of units to reduce investment size, easier to pass the financing threshold from the banks and could fit better in a sub-location off the main street. Not only that these new projects will be competing in price but will need to compete in offering the right design and facilities that suits its market segment as well.
Office: As supply increases and occupancy rate drops, the market will change to a tenant’s market where tenants, especially large tenants who occupy large office space, have more negotiation power for better terms and flexibility from the landlords. This could prove to advantageous for tenants to relocate or expand into newer buildings.
Retail: In terms of retailers, resizing and reformatting rental space will become a more and more important approach as it can help them to be more cost-effective and more agile at the same time. Major brands that used to rent bigger retail space will start negotiating to rent a smaller space. There will be significant movements in space requirement of key tenants. Banks are moving online and required less space for their branches. F&B will pay more attention to delivery service; thus a larger kitchen space is needed. Fashion stores will become more omni-channel.
Hospitality: 2021 may continue to be a challenging and exhausting year for the hospitality sector as most owners and operators have been operating under COVID-19 precautions with limited revenue for over a year. Bangkok, unlike other resort destinations within driving distance like Pattaya and Hua Hin, has not been the key beneficiary of the government campaigns to promote domestic tourism and “staycation” trend did not seem to catch on in Bangkok.
Industrial: There has been a shift in demand as investors have been increasingly more interested in buying factories rather than renting them to have more control over their premises. While many developers slowed down the speculative development of Ready-Built Factory (RBF), the take-up has been slowly increased by relocating manufacturers and new entrants.
Capital Markets: There is still demand for prime freehold and leasehold sites in Bangkok while developers are taking a step back to reassess the level of supply and demand in the market and wait for final details on the new Bangkok City Plan that will reduce development restrictions in several areas especially in the midtown and suburban locations along future mass transit routes.