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1 Bangkok

2 C O N T E N T S

3 Executive Summary 5 Economic Outlook 6 Residential Sector 9 Office Sector 12 Retail Sector 16 Industrial Sector 19 Capital Markets 22 Opportunities and Risks 25

4 INFOGRAPHICS PAGE 1

5 EXECUTIVE SUMMARY O p p o r t u n i t i e s & C h a l l e n g e s Growth in Tourism E-commerce Rising Asset Prices in Prime Downtown Locations 5

6 E C O N O M I C O U T L O O K

7 ECONOMIC OUTLOOK B e t t e r, B u t N ot B y M u c h Chart 1: Real GDP Growth Source: Bank of Thailand, 25 Dec

8 E C O N O M I C O U T L O O K B e t t e r, B u t N o t B y M u c h 8

9 R E S I D E N T I A L

10 RESIDENTIAL SECTOR L u x u r y - F o c u s e d & S e l e c t i v e B u y i n g Downtown Bangkok will continue to be the most sought-after address. Prices for newly launched downtown projects in the most prime downtown locations will continue to increase. Chart 2: Average Asking Prices of Off-plan Projects and Re-sale Prices of Completed Freehold Projects (for projects priced more than THB 120,000 per square metre), F Source: CBRE Research, Q

11 R E S I D E N T I A L S E C T O R L u x u r y - F o c u s e d & S e l e c t i v e B u y i n g Record prices for new projects will lead to selective buying. The re-sale market of good-quality existing buildings is favourable. Record prices in new projects can potentially push up resale prices in the best existing condominium projects. Majority of luxury buyers will continue to be Thai. Continued economic slowdown will likely affect condominium projects in less prime or non-prime downtown locations. RECORD PRICES FOR NEW PROJECTS WILL LEAD TO SELECTIVE BUYING.. Source: CBRE Research, October

12 O F F I C E S E C T O R

13 OFFICE SECTOR L o w v a c a n c y, l i m i t e d f u t u r e s u p p l y a n d r i s i n g r e n t s The Bangkok office market will continue to see low vacancy rates, steady net take-up and rental growth Chart 3: Bangkok Office Market, F Chart 4: Grade A CBD Office Rents, F Source: CBRE Research, Q Source: CBRE Research, Q

14 OFFICE SECTOR L o w v a c a n c y, l i m i t e d f u t u r e s u p p l y a n d r i s i n g r e n t s Limited future supply New office locations Chart 5: New Office Supply by Area, F Source: CBRE Research, Q

15 O F F I C E S E C T O R L o w v a c a n c y, l i m i t e d f u t u r e s u p p l y a n d r i s i n g r e n t s Tenants continue to expand with a new pre-leasing trend BANGKOK OFFICE MARKET WILL CONTINUE TO BE STEADY IN 2016 WITH FALLING VACANCY RATES AND RISING RENTS. 15

16 R E T A I L S E C T O R

17 RETAIL SECTOR M o r e C o m p e t i t i o n I n T h a i R e t a i l M a r k e t Slowdown in domestic consumption. Chart 6: Bangkok Retail Supply, Take-up and Occupancy Rate, Chart 7: Existing and New Supply, F & Beyond Source: CBRE Research, Q Source: CBRE Research, Q

18 R E T A I L S E C T O R M o r e C o m p e t i t i o n I n T h a i R e t a i l M a r k e t CONSUMERS ARE FOCUSING MORE ON ENTERTAINMENT AND EXPERIENCE. 18

19 I N D U S T R I A L S E C T O R

20 INDUSTRIAL SECTOR W e a k E c o n o m y D e l a y s R e c o v e r y Chart 8: Net Flow of Foreign Direct Investment, 2007 Q Source: CBRE Research, Q

21 I N D U S T R I A L S E C T O R N e w G o v e r n m e n t P o l i c i e s Special Economic Zones (SEZs) The Cluster policy KEY DEVELOPERS SLOWED EXPANSION AND FOCUSED MORE ON FILLING UP EXISTING INVENTORIES 21

22 C A P I TA L M A R K E T S

23 CAPITAL MARKETS N e w R e c o r d L a n d P r i c e E x p e c t e d Land tax reforms are the x factor for Income producing properties are still in demand, Land prices will climb ever higher. 23

24 C A P I T A L M A R K E T S N e w R e c o r d L a n d P r i c e E x p e c t e d The effective borrowing rate of developers will increase. LAND PRICE RECORD IS EXPECTED TO BE BROKEN IN THE FIRST HALF OF

25 O P P O R T U N I T I E S A N D R I S K S

26 OPPORTUNITIES AND RISKS Office development Opportunities Condominium Resale Opportunities Tourism Opportunities Prime Land Price Opportunities Growth of CLMV and AEC Opportunities New Mass-transit Opportunities 26

27 O P P O R T U N I T I E S A N D R I S K S Currency Risk Exports and Global Economic Risk Deflation Risk Policy and Political Risk Tax Policy Risk Structural Risk 27

28 RESEARCH CB Richard Ellis (Thailand) Co., Ltd. 2016