Thai property comeback

Business Asia, March 3, 2000

Most of the Thai property market has now stabilised and is set to bottom out after struggling for more than two years, Jones Lang LaSalle (JLL) claims.

"Though the oversupply remains huge and demand stays weak, signs of recovery have started to show up in certain sectors," said Mana Jiranapakul, director of research for JLL in Bangkok.

He said property rentals and capital values were steadying, with some signs of a pick-up in some sectors. Adding fuel to the upswing in the property sector was the continued growth of the Thai economy, low interest rates, increasing consumer confidence and an expansion of some businesses, he said.

Other factors included debt restructuring deals and the setting up of asset management companies by financial institutions.

Asset management companies would increase competition in the market and debt restructuring deals would help put more projects in the market he said.

The economic crisis in Thailand in 1997 and 1998 left numerous property development projects incomplete and work on some major projects was suspended due to lack of financing.

Analysing the various sectors of the property market, JLL said the Thai office market had seen a drop in vacancy rates to about 30 per cent from about 40 per cent during the peak of the economic crisis that followed the crash of the Thai baht in mid-1997. -- Reuters