The absorption rate in and around Rama 3, meanwhile, was about 5 units per project per month and Minburi in Outer Bangkok zone has earned a ‘safe’ label with remaining units expected to be sold within 9 months – faster than the average rate. These areas were still seeing healthy demand growth and balanced absorption of stock, and oversupplying was still limited to specific locations. At the same time, property developers were exercising caution when launching new projects, and have been adjusting their planning to better suit the economic condition.

The company’s deputy managing director, business strategies and asset management Suwannee Mahanarongchai said that the tightening of regulatory measures by the public sector and the constant monitoring of the real estate market by the Bank of Thailand have resulted in stringent loan approval criteria by commercial banks. This strictness meant that the percentage of non-performing loans over the past 5 years stood at about 3 per cent, which was not high.

“Our view is that there is very little chance of a bubble crisis occurring in the real estate sector, in a manner similar to that in 1997. Nonetheless, the current situation of real estate has given rise to concerns about oversupply at some locations. Certain localities have seen a continuously increasing number of project launches over the previous 4-5 years, and the number of unsold units in the market increased accordingly. Developers have tried to rebalance their investments by placing emphasis on selling and transferring ownerships at projects that were completed from late last year until the first quarter of this year. As a result, sales figures from these projects outperformed the average figure for the past 4-5 years,” said Suwannee.

Based on surveys of the condominium market in Greater Bangkok by Plus’s research and development division, which took into consideration and made comparisons of data on demand, supply, time required to make sale, and the number of unsold units over the past 5 years, it was determined that only certain localities were experiencing oversupply.

A survey of the market over the first 6 months of 2019 discovered that 77,379 units of residential properties remained unsold, whereas the figure in 2018 was 79,671 units. Zone-based classification of figures, based on market surveys in the first half of 2019, reveals that 10,453 units remain unsold within the Inner Bangkok zone. These units are expected to take 12 months to be sold off (assuming no additional project launches within this zone). The locality whose property market was still balanced was the Phloenchit-Chitlom-Lang Suan area, with only 645 units remaining unsold, and they are expected to take 10 months to be sold off. The Middle Bangkok zone has 14,662 unsold unit and the expectation is for all the rooms to be sold off within 16 months (assuming no additional project launches within this zone). The absorption rate at the Rama 3 locality – where 1,981 units remained unsold – was 5 units per project per month. The absorption rate was an improvement of 17 per cent compared to the past 5 years’ average.

For the Outer Bangkok zone, 52,264 units remained unsold. The units are expected to take 21 months to be sold off (assuming no additional project launches within this zone). Demand growth was found at the Min Buri area where 8,690 units remained unsold; these are expected to be sold off within 9 months – faster than the average rate for the Outer Bangkok zone.

“Developers have been analysing data and making tactical revisions to reduce running the risk of oversupplying in the condo market. It has been observed that, overall, supply was being balanced with demand, in the zones with new products injection. It is believed that the market will reach a balanced condition in the long-term if developers exercise caution by placing emphasis on releasing their old stock and take the care to evaluate the situation in order to properly determine the correct timing for new project launches. The government’s recent relaxation of the LTV measure, by means of loosening the criterion for co-borrowing, should enable the property market to proceed into a brighter direction. The situation warrants monitoring and possible economic stimulus measures by the government in this latter half of the year must be watched for,” Suwannee said.

The agreement covers the purchase by GESAC of 56 rai and a three-year lease on a 4,700-square-metre ready-built-factory at WHA ESIE 1 where it can start production while its own plant is under construction on the purchased land.

GESAC’s total investment will be Bt2.5 billion over the next three or four years.

Established in 1989, GESAC is one of the Xiamen Tungsten Group’s core subsidiary corporations. It specialises in the manufacture and sale of various kinds of tungsten powder, cemented carbide and cutting tools.

“This double agreement is the perfect illustration of WHA Group’s ability to offer a total solution package to local and international investors,” said Jareeporn Jarukornsakul, WHA Group’s chairman and group chief executive.

“Our collaboration with WHA Group is a significant step in our company’s international development,” said GESAC general manager Jiang Tao. “WHA ID’s valuable expertise in industrial management and operations, great customer service and reliability, coupled with WHA ESIE 1’s excellent infrastructure with state-of-the-art utilities and power supply, were instrumental in our decision to establish our presence in Thailand.

“Being at the centre of the Eastern Economic Corridor makes it the perfect location for our operations.”

WHA Eastern Seaboard Industrial Estate 1 (WHA ESIE 1) is located in Chonburi and Rayong provinces.

Thirty kilometres from the Laem Chabang deep seaport and Sri Racha city, it has 8,003 rai (1,280 hectares) with easy access from Highway 3574.

Opened in 2006, WHA ESIE 1 now counts over 103 customers representing 164 contracts, for a total investment topping US$6.5 billion. As one of the corridor’s industrial promotion zones, it embraces automotive manufacture, plastics and polymers, metal fabrication, electronics, building materials, agricultural and consumer products and logistics.

The company’s president Sopon Racharaksa said this marks the coming together of two leading real-estate developers, adding that FPT now possesses a full range of capabilities across multiple-asset classes, giving it an added competitive edge with a bigger network of customer touchpoints and greater flexibility to optimise the use of its land and properties.

“We look forward to achieving synergies between both companies to extend our horizon of long-term sustainable growth. With enhanced access to the enlarged talent pool and reputable partners, we are confident of turning FPT into Thailand’s leading provider of integrated real-estate platform,” he said.

In addition to this, FPT recently announced the first nine months of the 2019 fiscal year (October 1, 2018 to June 30, 2019) hit a new high since the injection of new capital by Frasers Property in 2016. The nine-month revenue of Bt4.707 billion exceeded its past record, rising Bt2.419 billion or 106 per cent from the same period of the previous fiscal year. Net profit also grew to Bt1.038 billion, an increase of Bt474 million or 84 per cent year on year. The occupancy rate of FPT’s factory and warehouse spaces currently stand at 81 per cent, he said.

Apart from this, FPT is the sponsor and manager of Thailand’s largest industrial real-estate investment trust (REIT), Frasers Property Thailand Industrial Freehold and Leasehold REIT (FTREIT), which is focused on industrial and logistics properties in Thailand. Currently, FTREIT has assets worth over Bt36 billion.

In July 2019, FPT raised Bt3.269 billion in a private placement, which boosted its investor base, improved its free float, and more importantly, strengthened its balance sheet flexibility for future expansion.