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Creating new landmarks using a mixed-use concept in Thailand

Large-scale and sophisticated mixed-use development projects in big cities, such as Singapore’s Marina Bay Sands, are becoming a hot trend in Thailand.

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Large-scale and sophisticated mixed-use development projects in big cities, such as Singapore’s Marina Bay Sands, are becoming a hot trend in Thailand.

Mixed-use projects e.g. One Bangkok and ICON SIAM are a new type of property development in Thailand that comprising an ecosystem of housing, office, and shopping space. Furthermore, these projects are unique in design and can become new landmarks of Thailand.

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  • EIC believes that large-scale mixed-use projects will raise competition in the property market because they can better respond to consumers’ and businesses’ need as well as generate greater investment returns.
  • Instead of investing in traditional single-use development projects, developers are thus encouraged to seek business partners to develop large-scale mixed-use projects that are distinct and able to attract more consumers.

 

High returns on investment will prompt developers to consider large-scale mixed-use projects as an alternative investment choice. Mixed-use projects are more effective in responding to developers’ needs than their single-use counterparts since they are less risky, have a greater variety of revenue sources, and can raise the capacity of expensive land plots by integrated components.

This type of development will enable owners to enjoy a continual income stream from property sales and rentals as well as increase the project’s value. As such, the ROI of mixed-use projects exceeds single-use projects by up to 1.5 times1.

Nevertheless, there are many challenges posed to these projects, such as financial management, finding large and suitable development sites, and striking the right balance between residential and commercial components.

Prominent design and synergistic integrated components are part of success factors of large-scale mixed-use projects as this will differentiate the project and enable it to become a new landmark for Thailand.

Marina Bay Sands, launched in 2010, is worth around USD 5.5 billion, and has become a symbol and new landmark for Singapore due to its unique design and integration of over 6 different functions. Thus, the project’s financial performance has exceeded the market’s average.

Marina Bay Sands has become a symbol and new landmark for Singapore

Marina Bay Sands, launched in 2010, is worth around USD 5.5 billion, and has become a symbol and new landmark for Singapore

The hotel component has a RevPAR that is 10% greater than the market’s average. As a tourist magnet, the project has been beneficial to country’s economy as the growth of tourist arrivals after the launch of Marina Bay Sands between 2010-2013 increased to 10% per year, from a rate of 4% per year during the three years prior to its launch.

Developers in Thailand will likely seek business partnerships to develop large, more complex, and more valuable mixed-use projects. As the modern urban population requires greater convenience in their daily routines, work, and shopping amid a limited supply good potential property, large-scale mixed-use project developments will become increasingly popular.

As these projects require expertise in multiple areas businesses will need to collaborate to develop projects that are more sophisticated and able to respond to the needs in each location.

Mixed-use concepts are already seen among projects that were completed in 2016, of which most were projects integrating basic property functions such as condominiums, hotels, and shopping malls worth on average around THB 12 billion per project.

However, mixed-use projects that will launch by 2025 will have investment value up to THB 120 billion per project and will integrate new components such as museums, conference centers and exhibition halls similar to the One Bangkok project.

The growth in mixed-use projects will raise competition within the property market as they can better meet the needs of consumers. Large-scale mixed-use projects that are currently close to completion will increase retail commercial and office space by 550 thousand square meters and 660 thousand square meters by 2025, as well as increase the supply of high end hotels and condominiums.

Author: Kanchanok Bunsupaporn

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