One of the promises made by MR Sukhumbhand Paribatra during his re-election campaign for Bangkok governor was to prepare the city for the opening of the Asean Economic Community (AEC) in late 2015.
The policy makes good sense because Bangkok has many advantages that could help position it as a hub of Southeast Asia. It was also welcomed by the Bangkok property industry as the city’s property markets are expected to enjoy stronger demand when the AEC takes effect.
More companies from Asean and other countries looking to set up business operations or regional head offices in this new economic community may choose Bangkok as a hub because of a number of advantages that the city has to offer.
Bangkok occupies a strategic location in the centre of the region
connecting the emerging economies of Myanmar and Indochina with the other Southeast Asian countries. Infrastructure has seen continued improvement. Skilled labour is available.
In addition, the cost of doing business in Bangkok remains very competitive. Corporate occupancy costs represent a major indicator in this respect.
Bangkok offers relatively low office rents (see table) compared to more economically established cities such as Singapore. Office rents in Bangkok are even lower than those in emerging markets such as Yangon, Ho Chi Minh City and Hanoi, where the international quality office markets are undersupplied.
An increased number of foreign companies in Bangkok will mean more demand for office space
and an increased number of expatriates working in the city. In most cases, senior expat executives will come with their families. This will benefit Bangkok’s residential sectors that cater to expatriates, whether they be luxury apartments, serviced apartments, rental houses or condominiums.
It is obvious that Bangkok also offers a favourable living environment for expat families in Thailand, with an abundance of quality housing, recreational facilities, international standard hospitals and international schools. This represents another major advantage of Bangkok, compared to other major cities in Asean.
Land and Property Tax Forces Site Owners to Consider Options
The new Land and Property Tax, which will be effective from January 2020 onward, is another challenge for the Thai property market.
Condominium Developers Diversify into Recurring Income Properties
A slowdown in the condominium market has encouraged major residential developers to consider diversifying their portfolio into other property sectors such as office, hotel, and serviced apartment.
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