JLL (NYSE: JLL) Thailand, a global real estate consultant, has released a real estate overview report, highlighting four major themes that will define the market in 2025. The country's emergence as a key beneficiary of the China+1 strategy is attracting significant foreign investment, particularly in the electronics and semiconductor industries. Meanwhile, the return-to-office trend is driving renewed demand for premium office space, and asset enhancement initiatives are becoming a priority for landlords seeking to remain competitive. In the hospitality sector, the outlook remains positive while investment activities continue to be strong. The evolving traveler preferences push both the owners and the operators to be more creative and flexible to remain competitive.
Thailand's Role in the China+1 Strategy and Global High-value Manufacturing Supply Chain
Thailand has positioned itself as a prime destination among other Southeast Asian neighbours for manufacturers seeking to diversify operations outside of China, particularly in the electronics and semiconductor sectors. The country has seen growing interest from Taiwanese and Chinese electronics manufacturers, alongside the entry of a prominent global semiconductor producer, that has established a new plant in Thailand to supply the electric vehicle (EV), data centre, and energy industries.
Mr. Roddy Allan, Chief Research Officer, JLL APAC, noted "The rise of generative AI and the increasing global demand for semiconductors have made Thailand a key market for high-tech industries. Investment incentives from the Board of Investment (BOI) and other government bodies have helped attract major foreign manufacturers looking to mitigate geopolitical risks and establish a presence in Southeast Asia. Data centres are expanding at an accelerated pace, driven by the infrastructure needs of AI development and digital transformation. These trends are shaping a new era for Thailand's industrial real estate sector."
A Reverse "Return-To-Office" Mandate: Renewed Demand for Premium Workspaces
As companies reassess their workplace strategies, the return-to-office trend is gaining momentum, leading to increased demand for high-quality office spaces in Bangkok's Central Business Area (CBA). More organizations are mandating in-office work, prompting both expansion and upgrades as companies seek to attract and retain talent.
Mr. Michael Glancy, Managing Director for Thailand, Indonesia, Philippines, and Vietnam at JLL, emphasized "We are seeing a reversal of the hybrid work trend, with major organizations increasing the number of required in-office days to an average of 3-4 days per week. This supporting the increase in demand for prime office spaces, particularly within mixed-use developments that offer an array of amenities to meet staffs evolving needs. Many businesses that previously downsized are now realizing they need more space to accommodate returning employees, fueling expansion activity across the market. With office quality now a key factor in job selection, landlords and occupiers who invest in upgrades will be best positioned to capture this demand."
Most of the new office supply in Bangkok consists of prime-grade spaces within mixed-use projects, while older buildings are being repositioned or redeveloped into flexible workspaces. In the CBA, Grade A+ office spaces have recorded a five-year compound annual growth rate (CAGR) of 3.7%, significantly outperforming the market-wide rental growth rate of 1.0%.
Asset Enhancement and Portfolio Upgrades to Stay Competitive
In response to shifting market dynamics, landlords are placing greater emphasis on upgrading their portfolios to retain tenants and enhance asset value. As of 2024, only 30% of Bangkok's existing office stock achieved LEED & WELL, and WiredScore certifications. In 2024 alone, 13 buildings totaling 358,000 sqm NLA underwent renovation and enhancement programs, while many have announced plans to implement WELL and WiredScore certifications and improve their buildings' facilities to meet modern workplace expectations.
In the retail sector, leading developers are realigning their strategies to cater to both the evolving tourism industry and changing local consumer behavior. Several major players have announced renovation and repositioning plans for retail centers in Bangkok's city center, while small-scale community malls are making a comeback to meet localized shopping needs.
Thailand's Resilient Tourism and Positive Trajectory
Thailand's hospitality sector is undergoing a period of transformation, with new brand entries and rebranding strategies shaping the competitive landscape. The rise of soft brands and collection brands from key operators are gaining momentum, while new brands, largely lifestyle brands, are entering the market to offer different competitive edge to owners in a highly competitive market in Thailand. Meanwhile, Bangkok is also seeing legacy brands returning to the market, reflecting renewed confidence in the country's hotel sector.
Mr. Rathawat Kuvijitrsuwan, Senior Vice President of Advisory & Asset Management, Asia, JLL Hotels & Hospitality Group, highlighted, "While hotel performance will continue to grow, we expect a more moderate pace compared to the record-breaking recovery of the past two years. We also expect to see strong growth in MICE and wedding-related events. Investors are becoming more strategic, focusing on high-value assets in premium locations and Leasehold properties, particularly in Bangkok's prime districts and beachfront resort areas "
In 2025, hotel transaction volume is expected to reach THB 13 billion, higher than the country's 10-year average, indicating Thailand's ongoing appeal as investment destination and positive investor sentiment towards Thailand's established hotel markets.
Thailand's Position as a Regional Investment Hub
As Thailand continues to attract foreign capital and strengthen its position as a strategic investment hub, JLL remains committed to supporting investors, developers, and asset owners navigate the evolving real estate landscape. With deep expertise in market trends, asset repositioning, and high-growth sectors, JLL is uniquely positioned to help clients unlock value and capitalize on emerging opportunities in Thailand's dynamic property market.