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.