Property transactions should increase

PUBLISHED : Wednesday, 10 April, 2002, 12:00am
UPDATED : Wednesday, 10 April, 2002, 12:00am

Property transactions should increase in the next few years as sentiment in the sector improves, according to CB Richard Ellis.

Since the Asian economic crisis that started in 1997, progress has been made on debt resolution and there have been disposals of non-core assets, according to James Pitchon, executive director of CB Richard Ellis.

As a result, trading in property has increased. There were seven office building sales last year compared with 20 transactions between 1988 and 2000.

Low interest rates have also attracted smaller conservative investors, the consultant said.

There were also first-time institutional investors such as the Government Pension Fund, which has acquired two grade-A office buildings in the past two years - the 48,000 square metre Abdulrahim Place in Rama IV Road and the Bangkok City Tower, with a 42,000 sq metre net area, in Sathorn Road.

Office occupancy rates grew from 63 per cent in 1997 to 75 per cent at the end of last year.

The same trend was evident in the luxury residential sector, with condominium occupancies increasing from about 50 per cent in 1997 to 73 per cent last year.

A few domestic companies have recently bought office properties.

There was also interest in buying properties from owner-occupiers, who saw the acquisition of an existing unit as being cheaper than buying land and constructing a building.

Executive director Aliwasa Pathnadabutr said office properties could generate yields of 5 per cent to 7 per cent.