BANGKOK: Thailand’s property market is seeing a major shift as developers move beyond simply delaying new launches and begin selling land and ready-to-develop projects to preserve liquidity.
Some listed and non-listed property firms are offloading landbank and projects that have already received Environmental Impact Assessment (EIA) approval to larger developers with stronger balance sheets.
The move allows struggling operators to convert sunk costs into cash, while financially stronger players use the slowdown to secure assets for the next market recovery.
Surachet Kongcheep, head of research and consultancy at Cushman & Wakefield Thailand, said the Thai property sector was under heavy pressure from weak purchasing power, high financing costs and broader economic uncertainty.
The slowdown is no longer limited to new project launches, he said.
A more significant change is emerging as assets begin to change hands across the industry.
Tighter bank lending for project financing, problems in the corporate bond market and weaker investor confidence have made fundraising more difficult for developers, both inside and outside the stock market.
Surachet said many developers that built up landbank aggressively during the market upcycle are now facing slower sales, higher holding costs and a need for liquidity.
As a result, some have decided to sell land and EIA-approved projects to larger operators with the cash and capacity to develop them further.
The trend reflects a natural adjustment in the property sector during a downcycle.
Developers with stronger finances and better risk-management capacity are now in a stronger position to acquire land or prepared projects that can be developed more quickly.
Data from the Real Estate Information Centre (REIC) underlined the slowdown in new investment.
In the first quarter, the number of housing units nationwide receiving land allocation permits fell to 5,783, down 45.7% year-on-year. Construction permits also dropped sharply, with approved housing units falling 50.2% to 27,870 units.
Condominiums were the hardest-hit segment. The number of condominium units receiving construction permits fell 71.3%, showing that many developers are delaying high-rise launches and focusing instead on managing existing stock.
Despite the clear contraction on the supply side, demand has not come to a complete halt.
Nationwide housing transfers still rose 11.2%, while new mortgage lending increased 11.1%.
However, most of the growth came from homes priced at no more than three million baht, a segment driven largely by real demand.
The upper-end market, priced from 7.51 million baht and above, showed signs of slowing, with transferred units down 14.9% and transfer value down 16.4%.
This has prompted many developers to adopt a wait-and-see strategy rather than accelerate new investment.
Kromchet Vipanpong, chief executive officer of AssetWise Public Co Ltd, said one of the company’s key strategies was to expand by acquiring projects from other developers, particularly those that had already gone through design work and received EIA approval.
He said this approach served as a shortcut because it could cut more than a year from the preparation process compared with starting a new development from scratch, including land acquisition, design and permit applications.
Kromchet said AssetWise is currently in talks over several potential deals and expects to disclose details in the third or fourth quarter of this year.
Around two to three deals are under discussion, he said, adding that the model could become an interesting growth path for the company.
Kromchet said the company would be selective and would only pursue projects that matched its expertise.
Although the market now offers many opportunities, including both strong assets and more challenging projects, AssetWise would not take on every project presented to it.
He said Bangkok’s property market was opening up new opportunities for developers through the acquisition or takeover of projects that had already been prepared for development.
The changing scenario also marked a shift in competition.
In the past, developers competed heavily to buy land. Now, the advantage lies with those that have capital strength and access to quality assets.
A similar pattern is emerging in Phuket, one of the hottest land markets after the Covid-19 lockdowns.
Land prices in Phuket stood at about 15 million baht per rai (1,600 sq m) three years ago, before climbing to 40 million baht to 45 million baht per 16 sq m today, more than doubling over the period. — The Nation/ANN
