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JLL sees bright future for post-Covid Thai real estate market

Jack Burton

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JLL sees bright future for post-Covid Thai real estate market | The Thaiger
PHOTO: JLL's Alex Sigeda, Vice President, Strategic Advisory & Asset Management

Thailand’s hospitality industry has been hit hard by the Covid-19 pandemic and Bangkok’s serviced apartments are no exception. A study by property consultant Jones Lang LaSalle indicates that serviced apartments have generally fared better than hotels in current and past times of distress. The report expects the pandemic to boost the growing trend of mixed-use premises offering hotel rooms and serviced apartments in a single development, as well as continuing interest from local and regional developers in developing standalone serviced apartments.

JLL’s study monitored international grade hotels and serviced apartments across Bangkok from January to April 2020. Findings show that over 80% of the city’s serviced apartments remained open at the end of April, with the average occupancy rates declining 30% year-on-year. During the same period, the majority of hotels across the city were shut down and those that remained open saw occupancies drop by nearly 50% year on year, many into single digits.

“Whilst the ongoing tourism market slump has forced the majority of hotels across Thailand to close their doors in order to lower their fixed costs, most of the Bangkok’s serviced apartments have remained open to serve long-stay guests,” according to Pimpanga Yomchinda, Vice President, Investment Sales Asia, JLL Hotels and Hospitality Group.

“Tourists or short-stay guests represent a smaller demand source in Bangkok’s serviced apartment sector. Though we have seen serviced apartments shifting their guest acquisition strategies by increasing the portion of short-stay guests in recent years, long-stay guests, most of whom are expatriates, have remained their top source of demand. This explains why the serviced apartment sector has felt relatively smaller impact from Covid-19 than hotels that rely more on short-stay demand from tourists.”

JLL’s study indicates that historically, the average distribution between short- and long-stay guests in serviced apartments has been 25/75 with a gradual shift in recent years to 40/60. The majority of hotels don’t have long-stay guests. While most traditional hotels don’t target long-stay guests, there has been a recent trend in hotels expanding into the extended-stay market, notably Bangkok Marriott Hotel the Surawong and the upcoming Novotel Living Bangkok Sukhumvit 34.

Alex Sigeda, Vice President, Strategic Advisory & Asset Management, says “With core demand from long-stay customer base, serviced apartments have proven more resilient than other hospitality segments in times of crisis. A similar pattern was witnessed during past events that had major effects on Thailand’s tourism industry, such as the Great Flood in 2011, political unrest in 2013-2014 and the Thai baht appreciation in 2019.”

Whilst the Covid-19 outbreak crisis has led to many new normals in the hospitality industry, JLL expects the pandemic to also accelerate the emergence of a hybrid accommodation development format that combines hotel and serviced apartments.

“As investment asset classes, serviced apartments and hotels have their respective advantages and disadvantages. The former generally offers a more efficient and stable operation that keeps the operator relatively safe in a down market. The latter generally offers more yielding opportunities during periods of high demand, given a more flexible inventory without long-stay offerings,” according to Sigeda.

To help bridge the gap between these two models, regional and global operators have been introducing a number of hybrid options into their brand stables, focusing on short-stay demand, while still reserving a portion of their room inventory for the long-stay segment, according to Pimpanga.

JLL sees bright future for post-Covid Thai real estate market | News by The Thaiger

JLL’s Pimpanga Yomchinda, Vice President, Investment Sales Asia

“We expect this trend to grow further as operators have realized complementary advantages of the two accommodation types. Among the recent examples in Bangkok are Staybridge Suites Thonglor by IHG and the upcoming Lyf Sukhumvit 8 by Ascott.”

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4 Comments

4 Comments

  1. Avatar

    raphael

    Thursday, June 25, 2020 at 10:01 am

    the reality of the real estate market in Thailand is pyramid schemes and money laundering, i live here for 12 years and i see it with my own eyes, empty luxury hotel, with prices far above the market, to declare fake income and clean dirty money, pyramid schemes with empty condominium towers, investors get a guaranteed 10% income on a unit that is never rented, they pays the early owners with the new comers, this is a big bubble that will collapse eventually creating lot of damage in the economy….

  2. Avatar

    me

    Thursday, June 25, 2020 at 10:20 am

    their stock is down 42% over the past 5 years. ain’t nowhere to go but up.

    instead of just copy/pasting a press release, why not fact check?

  3. Avatar

    Richard D Dorrell

    Sunday, June 28, 2020 at 10:41 am

    The Thai economy has just begun to fall. Lacking tourist and responsible retirees due to government policy will gut thai finances for years. The current military government wants $$ for their own pocket before anything else.

  4. Avatar

    Toby Andrews

    Wednesday, July 1, 2020 at 11:52 am

    Well he would say that, this Alex Sigeda is not going to say prices are plummeting and likely to drop further. He will talk it up . . .
    This dictatorship could stop property sales to foreigners tomorrow. The government did that in Goa.
    Imagine what that did to the property prices.

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Jack Burton is an American writer, broadcaster, linguist and journalist who has lived in Asia since 1987. A native of the state of Georgia, he attended the The University of Georgia's Henry Grady School of Journalism, which hands out journalism's prestigious Peabody Awards. His works have appeared in The China Post, The South China Morning Post, The International Herald Tribune and many magazines throughout Asia and the world. He is fluent in Mandarin and has appeared on television and radio for decades in Taiwan, Mainland China, Hong Kong and Macau.

Bangkok

Thailand News Today | Bangkok protest fallout, northern fire bans | March 1

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Thailand News Today | Bangkok protest fallout, northern fire bans | March 1 | The Thaiger

Coming up today… the fallout from yesterday’s latest protest violence in Bangkok, the first vaccine in Thailand who got it, and a major drug haul along the Mekong.

But first we’ll start up north where Lampang Province is joining other northern provinces todday by putting a total fire ban in place from today, March 1, until the end of April. Chiang Mai also started a ban on all deliberately lit fires from today and Lamphun, just south of Chiang Mai, already has one in place.

The bans are timely after a horrid weekend of air pollution in many of Thailand’s provinces over the long weekend, even as far south as the tourist destination of Phuket where visibility was down to about 1 kilometre and the smell of smoke was noticeable.

Whilst up in the north… 4 Thai women were arrested at a security checkpoint in Tak’s Mae Sot district after they illegally crossed the border from Myanmar into Thailand.

Illegal casinos and fancy hi-so massage parlours in Myanmar in areas near the border, have attracted wealthy Thais and Burmese. The establishments have also attracted plenty of Thais looking for well-paid work across the border.

In a major bust along the Mekong River, a notorious hotzone for drug trafficking, border patrol police seized 920 kilograms of dried, compacted cannabis from a boat along the Nakhon Pathom riverbank, bordering Laos.

Now to the weekend violence as the protests resume where they left off last year…

At least 22 people were arrested during the major Bangkok protest yesterday. It turned violent as pro-democracy activists marched toward the Thai PM’s residence. It’s been reported that one officer died during the rally, reportedly due to heart failure.

At least 33 people were injured… that includes 23 police officers. The clashes happened in front of 1st Infantry Regiment barracks on Vibhavadi Rangsit Road and involved around 1,500-2,000 activists from the Restart Democracy movement, part of the Free Youth group. The group has been protesting against the government and calling for reform of the country’s constitution and monarchy since protests began in July of last year.

And Thailand’s Covid-19 vaccine campaign started with Public Health Minister Anutin Charnvirakul who received the first of China’s Sinovac vaccine yesterday. PM Prayut Chan-o-cha was initially planned to be the first to kick off Thailand’s immunisation plan with the AstraZeneca vaccine, but due to problems with paperwork, the PM’s injection was postponed.

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Bangkok

Nearly 300 cats rescued from Bangkok home shelters

Caitlin Ashworth

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Nearly 300 cats rescued from Bangkok home shelters | The Thaiger
Rescued cats at the 3DPet Hospital & Hotel

Nearly 300 cats, many in wire cages, were found in 2 recently abandoned home shelters in Bangkok. Some cats were found dead and an animal activist who rescued the cats says the homes were filthy and smelled of cat feces.

The owner of the homes was initially providing shelter for the stray cats, but due to the financial problems brought on by the coronavirus pandemic and the lack of donations, the owner could no longer afford to feed and care for the cats, according to animal activist Warattada Pattarodom. The owner did not come by for a while and a neighbour would sometimes come by to feed the cats.

“The owner did not come to this place for quite a while, many months. So you can say they were abandoned because of her unfortunate circumstance, but they were not abused.”

After being rescued from the homes, the cats were taken to various veterinarian clinics for check ups. One veterinarian said he was sure the cats would recover.

“The cats got stressed because they were in an enclosure for a long time… but after last night they started to snuggle in the cage when people approached.”

The cats will be sent to a shelter in Chiang Mai which is also caring for elephants. Since the pandemic, the Chiang Mai shelter started taking in cats. It now cares for nearly 1,000 cats.

SOURCES: Reuters | NBT World

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Protests

At least 22 people arrested at Bangkok protest, officer dies of heart failure

Caitlin Ashworth

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At least 22 people arrested at Bangkok protest, officer dies of heart failure | The Thaiger
PHOTO: Nation Thailand

At least 22 people were arrested during the Bangkok protest yesterday, which turned violent as pro-democracy activists marched toward the prime minister’s residence, according to Thai Lawyers for Human Rights. An officer died during the rally, which the human rights group says was due to heart failure.

Some protesters threw ping pong bombs and firecrackers in the violent clash with police, the group says. Police armed in riot gear fired rubber bullets and hit protesters with batons. Water cannons and tear gas were used to break up the crowds after some protesters had breached the barricade of shipping containers that had been blocking the way to the prime minister’s residence at a military base on Vibhavadi Rangsit Road, according to the Bangkok Post. At least 33 people, including 23 police officers, were injured.

Out of the 22 arrested, 4 were minors who were picked up from the Din Daeng police station by their parents and will need to report to the Juvenile and Family Court this afternoon, according to the human rights group. The detained protesters face charges of fighting, blocking or harming a police officer.

Protesters from REDEM, or Restart Democracy, which is a spin off of the Free Youth group, were marching to PM Prayut Chan-o-cha’s residence to call on monarchy reform and an end to Thailand’s military influences in government.

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