Thailand and Southeast Asia’s real estate market will be influenced more in 2024 by strategic improvements in infrastructure and the quality of Grade A real estate in Bangkok. Bangkok's real estate market is set to be transformed by several world-class mixed-use development projects, with a total of 10 mixed-use precincts. These developments are expected to bring over 900,000 sqm of Grade A office space, 300,000 sqm of retail centres, 5,400 units of luxury condominiums, and 5,900 keys of luxury hotels to Bangkok's Central Business Area (CBA) by 2028. This influx of premium real estate positions Bangkok as an attractive destination for investors, multinational corporations (MNCs), and skilled labor.

ESG has become a must have in the Bangkok office market, with developers and investors committing to meet market standards through certifications such as LEED and WELL. MNCs, as significant demand drivers for office and logistics spaces, are often required by their headquarters to occupy ESG-certified spaces. According to JLL's database, 90% of new leasing activities in the past five years were in green buildings, which can command up to a 14% premium, putting more downward pressure any older assets which have been inactive following the ESG standards.

Foreign investment is crucial to the growth of Thailand's real estate market as the industry is fueled significantly by inbound capital. Approximately 65% of existing office space is occupied by MNCs, and over 10% of condominium units transacted in Bangkok were purchased by international buyers in 2023. As Thailand has been making efforts to attract foreign investment, JLL believes that there is an opportunity to increase the countries competitiveness by considering alternatives such as offering longer leasehold periods and investment incentives for selected asset classes.

Looking ahead for the next 12 months, JLL anticipates continued growth and evolution in the Thai real estate market, driven by the key trends identified. The focus on ESG, the rejuvenation of aging assets, and the strategic approach to attract foreign investment, are expected to create a win-win scenario for all stakeholders in the real estate ecosystem.

Mr. Rathawat Kuvijitrsuwan, Senior Vice President of Advisory & Asset Management, Asia, JLL Hotels & Hospitality Group, said: “Over 47% of non-land transactions over the past 10 years are hotels, which is a testament to the solid investment appeal in our tourism industry and its strong fundamentals as we have seen in our speed of recovery. Thailand's evolving foreign ownership landscape will open more opportunities to foreign investors in the hospitality industry.”

Mr. Anawin Chiamprasert, Head of Research & Consulting, Jones Lang LaSalle (Thailand) Limited (JLL), said: "In the face of global economic turbulence, Thailand's real estate market has not only remained steadfast but is set to evolve across multiple asset classes, positioning Thailand as a key foreign investment destination in the Asia Pacific region.”