The commercial property sector will continue to be robust as the growth seen in tourism and manufacturing sectors in 2023 is expected to continue this year, according to property consultant Jones Lang LaSalle (Thailand) Limited (JLL).
Michael Glancy, country head, said Thailand's real estate market will demonstrate resilience in the next 12 months as an uncertain global macroeconomic environment will be offset by an array of domestic policy initiatives and domestic market confidence.
"The commercial real estate industry is poised to perform strongly in 2024, driven by the ongoing recovery in the country's tourism market, growing manufacturing sectors and flight-to-quality and flight-to-green movements into prime assets across core sectors," he said.
Last year, the number of international tourist arrivals tallied 28 million, a growth of 152%. JLL forecasts an increase of at least 20% in 2024 to at least 35 million.
JLL also reported that the number of joint venture projects between local developers and foreign investors last year totalled 27 projects worth 42.9 billion baht, doubling in number and increasing 35% in value from 2022.
Significantly, the joint ventures shifted from residential to non-residential projects, with nearly half of them being other commercial projects, the majority of which were hotels and wellness facilities.
Half of the foreign investors were Japanese, followed by Americans and Australians.
He said 47% of real estate transactions excluding land purchases last year were hotels, particularly those located in Phuket, due to the growing tourism sector.
Mr Glancy said manufacturing was another robust sector last year with a growth of 182% in land acquisition for this type of development.
In addition, demand for prime office space in Bangkok's central business area (CBA) remained strong, particularly among multinational companies.
"Despite global economic challenges, Thailand has shown remarkable potential," he said.
"The commitment of policymakers to implement strategic improvements in infrastructure and the high quality of Grade A real estate in Bangkok will provide a major push for growth and provide a buffer against the combination of macroeconomic uncertainty, a high cost of capital and geopolitical factors," he said.