SUMMARY
- A handful of office landlords are providing rental relief to tenants, generally reductions of up to 15%.
- Rental reductions are more readily available, though they have to be negotiated on a case-by-case basis.
- Retail landlords have had to react much faster as retailers have faced forced closures and cuts to overheads have been more substantial.
- Compassionate relief from landlords may help with future occupancy rates in the increasingly competitive prime offi ce market, which is expected to see a doubling of total stock by 2025.
Bangkok’s condominium market at the start of 2020 was entering into a period of dramatic change, driven by a fall in buyer demand and by the large amount of unsold inventory which had become a risk for developers. COVID-19 has exacerbated these trends, placing developers under further strain as they struggle with large numbers of unsold units and even lower buyer demand. With a prolonged period of economic hardship anticipated, it is time for developers to reconsider their options and time for buyers to look for opportunities.
56,000 newly developed units were launched in 2019, representing a reduction of -34% from 2018; this downward trend is anticipated to continue, with only 98,000 units currently planned to be launched over the next 4 years. This will ultimately lead to a reduction in the amount of unsold inventory in Bangkok, which has been consistently high since 2013. This may present a future opportunity for the market to reach a supply/demand equilibrium, though judging by previous experience, it is unlikely to be maintained.