What we learned from the experts


Today’s highly anticipated Property Report Congress Thailand 2016 is already underway, with many of the country’s leading industry professionals in attendance.

Stay tuned, we’ll be bringing you live updates from the event, including highlights from the speaker’s sessions.

Also be sure to follow us on Twitter and Facebook, where we’ll be posting regular updates from the congress, and also in anticipation of tonight’s Thailand Property Awards.

10am: Welcome from Liam Aran Barnes, Property Report’s Brand Director and Editor-in-Chief.

Introduces congress chairman Clayton Wade, Managing Director of Premier Homes.

10.15am: Suphin Mechuchep, Managing Director Jones Lang LaSalle (Thailand) gives the opening keynote.

She covered Thailand’s new tax, describing it as a financial burden for property owners as well as banks. Some of these owners particularly those who are asset rich but cash poor could be forced to sell their assets if they cannot afford the new tax scheme.

However, the new tax should encourage a more efficient use of land. She said: “while many people will be hurt by this new tax when it is put into effect, but as it benefits the country in the long term, we should all support this.”

She also mentioned the more stringent enforcement of the hotel act, particularly in Phuket, which prevents property owners from renting out their property for a period of less than one month. This is one step towards making the real estate market more transparent, she said. “Policies should protect owners, consumers and the wider market in the long term.”

Suphin also mentioned the global transparency index, where Thailand ranked 38th out of 109 countries covered in the index, showing a steady improvement in the country’s transparency.

“Higher transparency levels also mean lower risks to owner’s developers and occupiers when making real estate decisions.”

Suphin Mechuchep
Suphin Mechuchep

10.30am: Andrew Gulbrandson, Head of Research, Jobes Lang LaSalle, Thailand

Gulbrandson gave a Thailand market overview, covering trends in Thailand and its position in comparison to other ASEAN nations.

Thailand has fallen behind in recent years in terms of foreign direct investment, he explained. The country doesn’t attract much investment relatively speaking, in part due to the restrictions on foreign ownership. “it’s very difficult for people to accept the 49 percent foreign ownership cut,” he said.

He also covered general trends he has seen. Including:

• An increase in green buildings and the adoption of LEED and other green building standards
• Uptick in investments to revitalize commercial real estate in Bangkok. In the office market, at one end of the spectrum there are owners tearing down their old buildings and building afresh. In the next 5-10 years we can expect to see a lot more buildings. He explains how with just a few thousand baht for basic updates of office space (paint work, new lighting) you can increase your rents by as much as 10 – 15 percent.
• More developers are looking outside of Bangkok, and more investors are pursuing investments upcountry and abroad.
• Taxation and transparency. “One of the big initiatives in the new tax regulations that will hopefully be passed early next year is that those taxes will be based on appraised values, and that those appraised values whatever they are, should decrease the cycles in which the values are carried out.”

Gulbrandson, like Suphin, mentioned the global transparency index, citing the direct statistical correlation between the amount of transparency and the amount of investments. “So I think we can all agree that investments are a good thing, but we’re not going to get there without transparency,” he said.

Closing on a high note, he said: “There are some very progressive initiatives in place in the coming years. There will be more emphasis on environmentally friendly development and there will be the possibility to be able to transfer your development rights. This will make it easier for everyone to build what they want to build.”

Andrew Gulbrandson
Andrew Gulbrandson

11:15am: Retail segment (panel discussion) led by Marciano Birjmohun, managing partner of Siam Capital Group.

Panelists: Wichai Chula-Olamkun – Executive vice preesident marketing and sales, W district, Vicharee Vichit Vadakan – co-founder and managing director, TheCOMMONS, Nattawat Woranopakul – deputy chief executive officer and chief marketing officer, Fiber One Public Company Limited


Wichai Chula-Olarnkun, executive vice president for marketing and sales, W district, believes that location is a catalyst to today’s retail segment amid Thailand’s “mild recession.” He also observed that technology and connectivity are impetuses to good retail development.

While she doesn’t have “a crystal ball,” Vicharee Vichit Vadakan, co-founder of The Commons in Thonglor, says that timing is very important when establishing retail developments, taking into account such factors as the presence of infrastructure projects within the vicinity. “Timing is very important for our retail concepts.”

Vicharee adds that amid the growing competition among Thai shopping malls, it is important to break the monotony in retail concepts. This can be done by tailor-making retail projects to the needs of the small communities or neighborhoods where they are situated. “Community first; the mall is a byproduct,” she says.

Online and offline retail are only going to amalgamate in the future, with e-commerce sites feeding into brick-and-mortar stores and vice-versa, Vicharee observed.

In addition to location and timing, Nattawat Woranopakul, deputy CEO of Fiber One, believes that auspicious, contemporary technological infrastructure is instrumental to the success of retail projects.

Mixed-use developments can be used to create quality public spaces side by side with Bangkok retail projects, Vicharee suggested, in view of the population boom and the needs of the elderly.

12:00pm: Hotel segment (panel discussion) led by Charles Blocker, IC Partners CEO

Panelists: Frank Janmaat – managing director, LightHouse, Anthony McDonald – CEO, BHMAsia & Louvre Hotels Group

Religious tourism characterises the Thai and Myanmar hospitality industries, Frank Janmaat observed.

Anthony McDonald observed that the Chinese market is one to reckon with, as they become more experienced and sophisticated, against the backdrop of expanding budget airlines. Number of air linkages rising between Chinese cities and resort destinations in Thailand.

Jumping in on the topic of online firms such as Agoda and Expedia and the relationship with the hotel industry, McDonald says that the level of visibility has actually increased the risk of the business in some sense.

Traditionally, people booked their holidays months in advance. Now, the pick-up is very last minute. “It’s very scary as a hotel owner, when I look at the books and only see 30 percent occupancy. But based on current trends we’ll generally reach about 80 percent, but most of this is last minute.”

L-R: Charles Blocker, Frank Janmaat, Anthony McDonald
L-R: Charles Blocker, Frank Janmaat, Anthony McDonald

1.45pm: How to design the perfect mall (workshop) Thomas Leeser – Principle, Leeser Architecture

“I don’t believe that people will go to malls now for shopping, they go for other reasons,” Leeser said. “People today go to malls for the promise of something new, perhaps something they want to experience.”

He also noted the sense of community that people get from malls. “The mall is a crucial element of city life,” he explained. “Malls have to become part of the community. Shopping is sort of the last public activity that is left to us.”

In the US, suburban malls are essential for teenagers as a main place for socializing.

In the future, if it has not happened already, malls will become entire metropolises. The idea is that the mall has become the new city, he said. “Malls nowadays replace or take the role of urban environments or urban activities.”

Location is a primary consideration for any mall, he explained, citing one mall in China, one of the largest in the world, which is now abandoned. It was located in an area where a car is needed to get there, and the local people were largely factory workers, most of whom didn’t have cars.

Malls of the future, he said, must have the following qualities:

1. Continuously changing, able to adapt
2. Provide compelling reasons to visit, should not be a simple monofunctional space (not just physical presence, because people can shop online today)
3. Disrupted circulation, e.g. elevators must make it easy to get around
4. Must not have a generic environment or a uniform atmosphere. The climate should feel varied, especially in terms of lighting, which often has tired designs

Thomas Leeser
Thomas Leeser

2.30pm. Office segment (panel discussion) led by Dr. Theerathon Tharachai, CFO, Project Planning Service Public Company Limited

Panelists: Nithiphat Tongpun – Head of office leasing, CBRE Thailand, Pitiphatr Buri – Executive Director of Bhiraj Buri Group, Sukkawat Prasurtying – Chief Investment Officer, AIA Group

“The market today is in good shape, Nithiphat said. “There is strong demand and rental increases. This is going to be like this for at least three years, or at least until 2018, then we will have to reevaluate.”

Pitiphatr agreed. “I think the office market is not that volatile, its steady. I’m not saying it’s going to do as well as in 2013/4 – these were office market glory days. For the future, I think it’s going to be driven by companies that are already established in Thailand and not overseas companies.”

In terms of new areas to look out for, Nithiphat predicts Bang Na will become a key area in the future.

While the panel agreed that areas along the new transport lines will be ones to watch, Pitiphatr noted that people’s behavior is key. “If you build all the lines, but people still prefer to drive, because they can’t be bothered to walk 200 metres to the station, this is a problem.” However, he noted that customers are willing to try new things in terms of locations. “The office market has traditionally been very boring, but I think it’s getting more interesting.”

Sukkawat, when asked if he had to choose one area outside traditional CBD areas, Sathorn and Ratchada, he said the company are looking for investment opportunities in many places.

3:19pm. Design (panel discussion), moderated by Dr. Julapot Chiravachradej, associate dean for planning and development, faculty of engineering, KMUTT

Panelists: Lee Lin, head of business development and project designer, Blink Design; Sasivimol Sinthawanarong, principal designer, JARKEN; Stephen O’Dell, director of SODA

With policy changes afoot in the country, including Thailand 4.0, O’Dell suggests that the government give more incentives to create more interesting buildings, such as tax credits and FAR bonuses.

The panelists also agree that green spaces and sustainability are taking precedence over Thai design. Acknowledging that Bangkok has one of the smallest green spaces per capita in the world, Lee has observed that design and architecure are going backwards, insofar as designers are going back to nature. “More and more luxury is becoming synonymous with nature,” he stated.

Similarly, Sasivimol promoted the importance of heritage elements in design. Lee, however, noted that Western knockoffs in Thailand tend to look incongruous and outdated fast.

Paradoxically, O’Dell observed the nascent rise of 3D modelling in architecture and design, making for a “seamless coordination between structural engineers and designers.”

Sasivimol also noted that universal design is becoming in vogue in the country now, with lines blurring between public and private spaces. Personal touch is imperative: “We shouldn’t think about it in terms of super luxury or luxury,” Sasivimol said. “The design should try to uplift the level of happiness.”

Asian designers, especially Thais, are becoming in demand globally: “We’re based here but we work globally,” Lee noted. All in all, designers are becoming globalised, with Lee noting that Thailand’s tallest building, the Mahanakhon, was designed by German architects based in Beijing.

4:06pm. Thailand’s regional markets (panel discussion), moderated by Paul Ashburn, co-managing partner of BDO

Panelists: Clayton Wade, Managing Director, Premier Homes; Robert Krupica, Senior Partner, Hughes Krupica; Paul volodarsky, Managing Director, DFDL; Risinee Sarikaputra, Director, Research & Consultancy, Knight Frank Chartered (Thailand) Co., Ltd.

Each of the panelists have long-term optimism about resort destinations in Thailand, with short-term opportunities as well.

For one, Risinee believes Hua Hin is recovering from stagnancy in the past year. The highlight of the first half of the year is decreased inventory, with supply limited — only two new projects launched first half of the year. At least 2,000 units are in the offing in the second half of the year.

In Pattaya, Wade described an oversupply in the market now, with a particular segment of buyers disappearing within six months’ time. Land values in the eastern seaboard are on an upswing, but Wade sees a pivot to the southern regions.

While majority of Hua Hin buyers are Thai, Chinese nationals are driving demand in Koh Samui, according to Volodarsky. One interesting phenomenon is that Chinese investors are driving demand for villa developments on a leasehold by way of mortgages provided by Chinese banks. Villa sales are hovering at around 12-15 million baht.

In Phuket, Krupica noted that Chinese made up some of the largest passenger arrivals, and they are homing in on villa projects. High-end projects are in the pipeline for the world-famous resort destination, but exits in the resale market are growing.

“The first thing you see now when you come to Phuket is traffic,” Krupica noted, adding that road developments dominate everyday talk in Phuket everyday. One bright spot, however, is that there has been talks of creating more direct air links and chartered flights between mainland China and Phuket.