BBS AUG 18

BUSINESS SUPPLEMENT
Cover Story
LAND PRICES SOAR
IN BANGKOK
According to a report released by the property
consultant firm CBRE, land prices in central
Bangkok have increased by about 1,000 percent
in the 30 years since CBRE established an
office in the Thai capital.
While this is hardly surprising, the pace of
price growth appears to have accelerated since
the turn of the century and this growth has been
especially noticeable since 2015, in the year after
the military launched a coup and ousted the
civilian government.
baht in the early part of 2015. CBRE claims the
average price per square wah is now around
three million baht with no sign of a slowdown.
CBRE notes that the increase in land prices
has not been uniform and there has been
a major change in the development patterns
in Bangkok as a whole. The property consultant
noted that while Bangkok grew during the
1970s and 1980s it did not have a clearly defined
city centre. It is only since the two key
the most popular BTS and MRT lines, although
the land price increases are far from uniform.
With stricter planning and building regulations
land prices can vary quite markedly, even
within the confines of what is now considered
the Bangkok city centre. CBRE states that land
prices are now a much greater proportion of
total development costs than they once were
and these costs have outstripped construction
expenses.
Indeed, a quick look at prices per square
wah in figures released by CBRE shows a fairly
flat line between 1988 and 1992 followed
by modest increases up to the advent of the
1997 Asian Financial Crisis. Yet by 1998 and
into 1999 the price per square wah passed the
500,000 baht mark, showing just how quickly
Thailand was bouncing back from the nadir of
the economic crisis.
The price of a square wah in central Bangkok
passed the magical million baht mark
around 2007 and then went past two million
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public transport developments, the opening of
the BTS (Skytrain) at the end of 1999 and the
underground railway (MRT) in 2004, that central
Bangkok has become more defined.
CBRE states that by about 2025, Bangkok
will have around 460 kilometres of mass transit
lines. By comparison, the London Underground
is 402 kilometres.
The popularity of the mass transit routes
sees around 1.2 million users a day, and this
will rise as more lines are opened. This has
meant great increases in land values near to
Despite the hike in costs, CBRE expects
central Bangkok will remain the preferred location
for the higher end hotels, offices, retail
centres and the like. Of course, the market will
still be governed by affordability.
CBRE suggests a lot of older buildings will
come under the wrecking ball since the value of
the land upon which they sit is so much higher
than the building itself. One prominent example
of this is the Dusit Thani Hotel, where there are
plans to demolish the existing structure and redevelop
the site.
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