Our guest speaker James Pitchon is well known to quite a few of our members as he has been a speaker a couple of times before. Also, he has been actively involved with our Clean Water Drinking Systems projects while he was working with CB Richard Ellis ( CBRE ) and now as a private sponsor.

He started by saying that although he ran the CBRE research team for several he certainly did not see the pandemic coming so that says a lot about his ability to predict future trends in real estate. Hence whatever he says today must be taken with a pinch of salt !

He talked of "index of pain" or which property sector has suffered the most. at the top is the hotel sector. The second worst affected is the retail sector. Residential sector has had mixed results which is sometimes quite illogical and confusing. The only real winner has been warehousing which was already doing reasonably well with the growth of e-commerce which has been turbo-charged with stay at home shopping.  

Talking of hotels he said it is quite surprising how few hotels that have been sold. Infact in the last 2 years less number of hotels have been sold compared to the previous 2 years. Possibly because banks have been providing working capital and have not been calling in the loans. Going forward, he is amazed at the continuous construction of new hotels and he estimates this to be around 6,000 rooms to be completed over the next couple of years and new hotels are still being planned. 

As for the retail store, all stores have been losing revenue. Even 7/11 has not seen growth in revenue.

In the office sector, a lot depends on how the work culture will emerge. Work from home, work from office or a hybrid system. Most likely the hybrid system will be the norm with people working certain number of days from the office and balance days from home. Bangkok office market has 9.50 million sq meters currently under supply and another million sq. meters under construction for completion by 2024. Compared to the economic crash in 1997, the current situation in this sector is not as bad as it was then. However a point to note is that 70 pct office space in Bangkok is over 20 years old. 
Expect to see downward pressure on rent. 

In the single detached housing sector, there were 50,000 new completions in 2019, 48,000 in 2020 and 24,000 in first half of 2021. So there has been no significant drop in this sector. In the western world there has been a move away from town center towards the outskirts for a bigger house after 2 years of living in a downtown apartment.

In Bangkok there has been a drop in the construction of condominiums over the last 2 years. The inventory of unsold newly built and under construction condominiums is around 100,000 units. There are deals available for unsold units in some buildings which were completed 2 years back and remain unsold. The second-hand market remains illiquid as sellers are unwilling to discount prices. Of course the odd deal is still available when a seller becomes desperate to sell. The 3 D's - death , debt or divorce - are the reasons which accelerate the need for a sale. Such bargains are few and far between.

The industrial property market has been very slow. This sector is critical for Thai economy. Travel restrictions and reduction in FDI in this sector has adversely affected this sector. 

Modern logistics which includes warehousing is probably the most attractive property investment sector around the world.
Going forward this is an area where Thailand will continue to grow as e-commerce grows. It is a continuously evolving sector. 

In summary, the pandemic has had quite a bad effect on the property market. Going forward we must remember China which accounts for one-third of this sector will not be there. Furthermore, new hotel constructions continue hence the market will be very tough. Although Thailand has begun to open the tourism sector, it is going to be a long, long haul on the road to recovery. 

Reported by Rtn Rakesh Sodhia

 Guest Speaker James Pitchon

PP Mark Butters introducing our speaker

Vote of Thanks given by Rtn Varin Sachayan

IPP David Record explaining Rotary Action Group
For more information check out : actiongroups@rotary.org

Secretary Yannick Thevenot giving summary of minutes of October Board meeting

Rtn Moto Kakiuchi dialing in from Japan. Or is it Hawaii !

New faces watching the proceedings with interest

Rtn Lars Svensson and guest - Nils Helander

Rtn Joseph Scuderi and guest - Alex Cespedes

Sjoerd Verstege and Willem J. Adolfs from RC Bangkapi

Rotarians Ron Livingston, PE Patrick Gauvain, President Finbarr O'Connor, IPP David Record and Sanjeev Chowdhury post together at the Canadian Ambassador's residence on November 11 at Remembrance Day Ceremony. President Finbarr laid a wreath on behlaf of RCBS members at the event.