NEW YEAR STARTING TO LOOK BRIGHT FOR DEVELOPERS

       While Western investors are not looking at the Thai property market right now because they are still resolving their own serious economic problems, others have taken their place, such as Asian investors from Singapore, Hong Kong,China and India who have begun assessing opportunities here, according to Longlom Bunnag, chairman of Jones Lang LaSalle Thailand.
       He said Singaporeans are becoming more active here because the island state managed to recover from the downturn last year much faster than most anticipated.
       "We have started to see a few Singaporean investors looking to buy in Thailand, but their expected return on investment is higher than pre-2008," said Mr Longlom.
       Also focussing on Thailand right now are investment funds based in Chian, Hong Kong and other Chinese territories. That Chinese investment is now flowing into Southeast Asia is clearly because the Asian giant is doing so well economically, said Mr Longlom.
       He observed that while Chinese investors tend to expect lower yields than Singaporeans,for instance, this is mainly because they are short-term players who heavily focus on liquidity and exit strategies.
       They are certainly not looking to hold their properties for seven to 10 years, as longer-term investors do.
       His property agency has also seen Indians move into Thailand with an eye on investing in Phuket, although they are not much interested in Bangkok. However, he added, Middle Eastern investors who were previously active here have kept silent since the global economic crisis erupted.
       Mr Longlom urged the public to continue watching the global economy closely, because in this day and age communication is instantaneous, and affects decision-making by all concerned parties, including property developers and lenders.
       "React quickly, in the sense that if you think there might be a sign of a dip, then act accordingly. Likewise if you think there is a sign of a boom to come."
       Within the property industry it is the hotel segment which has been hurt the most by the global economic crisis, with the volume this year expected to be around 50% of what was achieved in 2007.
       Clearly this is so because hotels are closely linked to foreign income since the majority of their guests are from other countries. Even so, Mr Longlom does not expect the recovery to take five years, as was the experience after the 1997 Asian crash. One reason for his optimism is that many hotels built up a financial cushion during the many good years prior to the 2008 economic shake-up. Aside from this, the government is also helping the industry, with banks having been instructed to assist hotel borrowers as well as small and medium enterprises.
       Mr Longlom fired a broadside at those who are spreading word that the hotel industry is going to collapse. He said this is totally irresponsible and creating unnecessary panic.
       He particularly faulted a recent report that said 22 hotels in Bangkok are up for sale.
       "It's very irresponsible to go around saying things like that. I think whoever gave that interview should issue a note of apology."
       He is also worried about the impact of the recent injunction suspending 76 industrial projects at Map Ta Phut in Rayong.
       "I am not very clear what exactly the problem is, but I was told that 50% is to do with pollution.
       "However, these 76 projects did not create the pollution as they are not operational yet.It was caused by existing plants."
       Regarding the overall performance of the property industry Mr Longlom expects the market to do quite well in the new year because of pent-up demand from early 2008 onward, with the first half of this year being particularly dreadful.
       "If politics becomes more stable and there are no glitches on the political front, I think next year will be a good year for the residential market."
       His agency is seeing encouraging activity in property development, with strong players now moving to buy land for new projects.Except for a few deals there is not much discount in land transactions in the built-up areas of the city and nearby zones such as Bang Yai.
       Prices of plots near the skytrain and subway lines are expect to rise next year as bidding is anticipated to become more intense.
       End-users will continue to benefit from a softer market from now until the end of March, when tax benefits end. However they are not getting huge discounts like the 40-50%witnessed in 1998 and 1999.
       Where the investment market is concerned,Mr Longlom said all sectors, including office,retail, serviced apartments, apartments for rent and logistics and warehouse are seeing healthy occupancy rates.
       His agency expects a good number of investors to look for opportunities to buy investment-grade properties from now until next year.
       Turning to office buildings, Mr Longlom said these investors are looking for a return of 7-8% per annum for those classified as Aand 5.5-7% for those a notch up, in the A bracket.
       Where condominiums are concerned the anticipated return is 5-7% depending on the building location and age, plus whether or not the units are fully furnished.
       The desired yield for logistics and warehouses is higher, at 9-11%, because these are very specific properties that meet special needs and therefore more difficult to find tenants.
       The yield investors would require for leasehold retail outlet is also 9-11%. Most retail buildings in Bangkok are located on leasehold plots, Mr Longlom said. These leases are generally for 30 years and this drives up development costs.