TBY talks to Simon Landy, Executive Chairman of Colliers International Thailand, on the sector.

Simon Landy

What macroeconomic factors are driving demand in the office segment?

Much of it is domestic expansion. There is growth in the e-commerce sector and more start-ups taking up more office space. Many of these businesses do not require much office space; however, as they grow they can become large operations. Rents in the office segment have moved up sharply and there is likely to be a continuing shortage of new office developments. We are also witnessing a growing trend of large multinationals setting up their regional offices here. Bangkok provides a center within the AEC for foreign investors who want to invest or develop projects in Myanmar, Laos, or Cambodia.

What impact will transport expansion projects have on inner-city development and the future of the real estate sector?

It will have a huge impact—today we have two MRT lines and the impact of those two lines alone has been massive. They have created pockets of development that we would not have had otherwise. We should see further clusters of commercial development springing up. There are many M&As taking place and we expect many more similar alliances. The market has become so brand conscious that it is difficult for one of the smaller developers to sell properties.