Crisis interrupts Bangkok projects
Crisis interrupts Bangkok projects
BANGKOK (DPA): Thailand's economic meltdown has resulted in the suspension of 41 office and condominium projects and delayed work on 71 percent of proposed retail projects in Bangkok, a leading real estate firm said yesterday.
According to Jones Lang Wootton (JLW)'s latest property report on Bangkok, construction of some 630,000 square metres in 20 new office projects and 9,800 units in 21 new delux condominiums has been suspended this year.
Furthermore, only 29 per cent of all proposed retail supply is actually under construction, said the international real estate services company.
"The major underlying influence on the market has been the sharper than expected decline in the level of economic activity, which has dampened the level of demand in the property market," said Jeremy Stewardson, managing director of JLW (Thailand).
Thailand's economy will shrink by an estimated 8 percent-9 percent this year, a much bigger contraction that originally expected.
According to JLW's figures the vacancy rate in Bangkok office buildings is now 24.4 percent, while it is 28 percent at retail outlets, and there are currently about 7,800 unsold condominium units on the market.
JLW's director of research, Craig Plumb, said that most foreign investors were still waiting for property prices to come down to realistic levels and for the passing of new property- related legislation before jumping in the depressed market.
Thailand's cabinet last week approved three new bills that would allow foreign buyers to own up to 100 percent of condominium projects, increase lease holding from 30 to 99 years and allow foreign ownership of small plots of land on a case-by- case basis.
The laws, however, still need to be approved by parliament before they go into effect. "And who knows how long that will take," noted Plumb. The same three bills were passed by the previous Thai cabinet under Prime Minister Chavalit Yongchaiyudh but were delayed when his cabinet fell apart last November.