Knight Frank Chartered (Thailand) Co Ltd

Knight Frank Thailand Reveals Market Sentiment Across Key Real Estate Sectors in 1H 2025

Bangkok, Thailand – Knight Frank Thailand presented its mid-year market overview at the “Knight Frank Foresight 2025: Mid-Year Review” event, covering the performance and outlook of the residential, office, industrial, and hotel sectors in the first half of 2025. The findings highlight both the ongoing challenges and selective opportunities in Thailand’s real estate market.

Residential Sector

Thailand’s condominium market slowed sharply in H1 2025, as major listed developers such as Sansiri, Sena, Major Development, and SC Asset postponed launches despite having projects ready. For the past six months, no significant new condo projects were launched, reflecting weak buyer confidence and tighter bank lending. Unsold inventory remains elevated and absorption rates subdued.

However, opportunities have emerged in the secondary and NPL markets, where discounts of 30–40% are being offered. Knight Frank recently closed a THB 108 million unit at One Bangkok, underscoring investor appetite for prime, well-managed projects at attractive prices.

Meanwhile, the housing market has shown resilience. Homes in the THB 5–10 million range continue to attract strong demand, supported by banks’ willingness to lend and younger buyers seeking long-term residences. In contrast, homes above THB 20 million have seen slower sales, with many buyers waiting for greater political and economic clarity before making decisions.

Office Sector

Bangkok’s total office supply reached 6.42 million sq m in Q2 2025. The market saw continued leasing for smaller spaces (300–400 sq m), while large transactions (3,000–10,000 sq m) remained rare, leading to a 0.7 percentage point decline in occupancy.

Tenants are increasingly cautious, with many negotiating rent discounts of 15–25% and focusing on cost optimization through consolidation or downsizing. Average Grade A rents are under pressure, while landlords compete aggressively with incentives. With 2–3 major buildings completed in H1 and additional supply expected by year-end, location remains the key differentiator in this competitive market.

Industrial Sector

Demand for industrial land continued to strengthen, particularly in the Eastern Economic Corridor (EEC). Serviced industrial land sales totaled 4,684 rai in H1 2025, up 34% HoH but down 42% YoY, as 2024 was an exceptional base year.

The average asking price rose 4.5% YoY to THB 6.64 million per rai. Electronics and EV-related investors were among the most active buyers, with Chonburi and Rayong remaining the top destinations. Foreign direct investment approvals have surged, supported by BOI measures, though the actual impact will take time to materialize. Thailand remains competitive, offering a 19% corporate tax rate, compared to Malaysia’s 20%.

Hotel Sector

The hospitality market delivered mixed results. In Bangkok, the occupancy rate dropped 3.7 percentage points to 75.1%, while the ADR rose modestly to THB 4,260. As a result, RevPAR in the capital came under pressure.

In contrast, Phuket recorded stronger growth, with both occupancy and ADR supported by resilient international demand. New launches of villas and condominiums also increased, reflecting investor confidence in the island’s recovery.

International arrivals were uneven: Chinese tourists fell 35%, Malaysians 7%, but Indian and Russian arrivals rose by an average of 16%. Domestic demand remains vital during low season. In 1H 2025, seven new hotels with over 1,900 keys opened, while investors from Singapore, Malaysia, and India remain active in pursuing BOI-supported hotel assets.

Comment from Knight Frank Thailand

"If the market continues to face headwinds for the remainder of the year, we believe that 2026 will be a more decisive period for recovery, provided that political clarity and supportive government policies are in place. While sentiment remains cautious, opportunities still exist in the landed housing segment, the secondary market, and industrial land. Knight Frank’s role is to help clients prepare and position themselves so that when confidence returns, they are ready to act quickly and effectively."

— Nattha Kahapana, Managing Director, Knight Frank Thailand

Outlook

Knight Frank Thailand emphasizes that political stability and clear government policy will be critical in restoring market confidence. While the condominium sector continues to face challenges, selective opportunities are present in the secondary housing market, industrial land, and hospitality investments.