A year and a half into the pandemic, some real estate companies are still struggling to remain competitive in the market, but the giants have been able to quickly adapt to the unexpected situation, capitalising on the diverse income streams they have built.
Some players have even utilised the pandemic as opportunities to expand business operations, aiming to complete projects by the time the country reopens and the economy revives.
CBRE Research continues to see these players introduce new projects into the market with a timeline for completion in 2023 or during the period when many have forecast the market will start to recover.
Aside from coming up with survival strategies to stay afloat during the coronavirus pandemic, the big players have made use of 2020 and 2021 as an incubation period for their new projects.
This can be clearly seen in a number of recent announcements by top real estate players. For instance, Asset World Corporation Plc plans to continue its new retail, hotel and branded residence development projects in Thailand amid talk of how hospitality businesses are struggling. These properties are planned to be completed between 2023 and 2025, with confidence that Covid will have subsided by then.
Some of the upcoming megaprojects Asset World continues to push forward are Aquatique in Pattaya, One Bangkok, and the Woeng Nakorn Kasem development. The company has stated that it still has long-term confidence in Thai tourism and its megaprojects should be completed when the industry will have rebounded.
Recent business expansion announcements from Central Pattana Plc (CPN) also show that the commercial real estate giant is not slowing down. The company has made major moves by becoming the majority shareholder of SF Group, leasing a prime plot in Siam Square with the historic Scala Cinema, and announcing the development of three new projects in Ayutthaya, Si Racha and Chanthaburi.
These moves show that CPN's strategic plan is not only aimed towards mitigating losses from the pandemic, but also towards the potential growth in the long run.
The hotel group Standard International, in which Sansiri Plc owns a 62% stake, is also still committed to opening The Standard, Hua Hin, its first hotel in Thailand, on Dec 1 this year. In addition, the company is planning to open The Standard, Bangkok Mahanakhon in 2022, poised to be its flagship in Asia.
The company's CEO is optimistic about the hospitality industry's recovery once the pandemic situation improves and travel restrictions in resort destinations ease.
The residential real estate giant AP (Thailand) Plc has also recently announced the launch of five new single detached home projects this month. The company has found that despite the pandemic and its effects on the economy, buyers are continuously looking for houses.
In fact, there is growing demand for single detached homes as the company sees a 36% increase in presale revenue from the previous year. The announcements indicate that AP is confident that there is growing demand among consumers as the economy slowly recovers.
As the Covid situation escalates, or de-escalates, in Thailand, the smaller players will be focusing on keeping their boats afloat while the bigger players are bolstering their hulls, in preparation for when the wind is back on their sails.
There has been talk about the possibility of more consolidation happening in the market and how the recovery in Thailand will be K-shaped, where big players flourish and smaller players struggle. The longer we are in this situation, the clearer this picture could become.
Piranat Viriyaprapaikit is an analyst at Research and Consulting, CBRE Thailand. He can be reached at piranat. viriyaprapaikit@cbre.co.th