Recent Study: Thailand Real Estate Report Q4 2012

Recently published research from Business Monitor International, "Thailand Real Estate Report Q4 2012", is now available at Fast Market Research

by Bill Thompson

(WireNews+Co) - Boston, MA - 25 October 2012

The Thailand Real Estate report examines the Commercial Office, Retail, Industrial and Construction segments in the context of a subdued economy whose commercial real estate market is currently characterised by its reconstruction bent.

With a focus on the principal cities of Bangkok, Rayong and Pattaya the report covers the rental market performance in terms of rates and yields over the past 18 months and examines how best to maximise returns in the commercial real estate market, while minimising investment risk and exploring the impact of global economic woes upon the sector. The key potential growth areas driven by increasing activity reconstruction damage caused by the 2011 floods are also explored alongside newly collected data covering rents and yields for the first six months of 2012.

View Full Report Details and Table of Contents (http://www.fastmr.com/prod/456378_thailand_real_estate_report_q4_2012.aspx) (http://www.fastmr.com/prod/456378_thailand_real_estate_report_q4_2012.aspx)

Concerns remain prominent among investors. However, Chinese corporate interest in the Thai real estate sector is coming to the surface. Following a recent business match-making roadshow to China, a number of Chinese firms have shown an interest in international collaboration. Thailand's stock as an investment destination among Chinese firms is rising, and the local Thai real estate sector is one industry which has been highlighted as an area of growing overseas interest.

Key Points

- Reconstruction efforts contributed significantly to a strong rebound from an 8.9% year-on-year (y-o-y) contraction in real GDP growth in Q411 to 0.3% y-o-y growth in Q112. However, we view these as one-off effects that will wear off over the coming months. Moreover, given that we do not see the case for a strong pickup in external demand, we expect real GDP growth to remain subdued at 4.0% for 2012, below average consensus forecasts of 5.1%.
- Inflationary pressure is expected to continue to wane, and the central bank will very likely begin to tone down its rhetoric on inflationary risks resulting from higher food and fuel prices. We believe that policymakers will need to see either further evidence that the economic recovery is losing momentum (which is our core view) or a greater slowdown in money supply growth before there is another rate cut. Accordingly, we are maintaining our forecast for one 25 basispoint cut by the end of the year.
- Thailand's fiscal position is set to deteriorate in the near term in line with our view that the government will increase public spending to help cushion the impact of cooling external demand on economic growth. However, a significant portion of the expected increase in public spending will go to one-off reconstruction efforts and flood relief programmes. We therefore believe that there is significant room for the government to reduce spending from 2013 onwards. We remain optimistic that Thailand's fiscal position will gradually improve and achieve fiscal balance by 2016.
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