Retail Rental Costs Rise Sharply On High Demand

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Retail rental costs rise sharply on high demand

BANGKOK: -- High demand has caused rental fees for retail space to jump 25-50 per cent so far this year, says Land and Houses Plc president Anant Asavabhokin.

He told the "Architect 2006" seminar yesterday in Impact Muang Thong Thani's Challenger Hall that the retail market had a high growth potential, as more shoppers now made all of their purchases in shopping centres rather than in traditional markets.

Rental fees for retail space have risen from an average of Bt400 to Bt800 per square metre last year to Bt600 to Bt1,000 now.

The condominium market is also experiencing strong growth, because of a supply shortage, especially in the central business areas along Sukhumvit, Silom and Sathorn roads.

Anant said new environmental regulations for condominium projects that took effect in January were also affecting supply, because new projects now had to design green areas covering up to 25 per cent of the total area. That will increase costs only for new projects, because those existing already received construction licences before this year.

"These environmental regulations will reduce the number of new condominium projects in the central business areas, which means prices there will rise 20-30 per cent on average," he said.

Anant said the detached-housing market had been hit by oil-price rises, interest-rate increases and political problems, which had resulted in most potential home-buyers delaying their purchases in the first quarter and pushing the market down 5-10 per cent on average.

He believes, though, that demand for detached housing will return once the political problems end, and the market will grow as much as 8 per cent for the year.

But he added that property developers needed to downsize new projects, so they could offer prices of less than Bt5 million per unit, compared with the Bt10 million per unit seen now.

--The Nation 2006-05-05