Mixed-use property projects: more to come

Mixed-use property developments are set to become more prevalent in Thailand.

A new report from Siam Commercial Bank’s Economic Intelligence Center (EIC) is urging Thailand property developers to “…to turn towards developing large-scale mixed-use projects rather than single-use locations.”

EIC said that a high return on investment will prompt developers to consider large-scale mixed-use property projects as an alternative investment choice.

Mixed-use projects, it added, are more effective in responding to developers’ needs than their single-use counterparts since they are less risky, have a greater variety of revenue sources, and can raise the capacity of expensive land plots by integrated components.

This type of development will enable owners to enjoy a continual income stream from property sales and rentals, as well as increase the project’s value.

Nevertheless, it voiced concerns that there are many challenges posed to these projects, such as financial management, finding large and suitable development sites, and striking the right balance between residential and commercial components.

EIC noted that the growth in mixed-use projects will raise competition within the property market as they can better meet the needs of consumers.

EIC added that it sees rental office space in the central business district of Bangkok likely being most affected by large-scale mixed-use projects.

Although the amount of office space will rise to 8.8 million sqm this year, and office space occupancy rates in Bangkok will remain above 90 percent, the increase in the supply of office space from large mixed-use property projects will in part hurt conventional rental office businesses, reducing their occupancy down to a rate of 80 percent by 2025.

EIC advises property businesses to turn towards developing large-scale mixed-use property projects rather than single-use locations as his will help diversify risk and increase revenue channels by integrating various property functions that are complimentary and suitable to their location.

Read the full report HERE.