Megatrends

Four forces in Thailand’s economic and social development

“It is a unique period of opportunity, which provides a window of significant economic and social development for the country”

From Antony Picon – Senior Manager of Research, Colliers International

Megatrends

I. The demographic dividendII. The rise of the grey baby boomerIII. The new economic fabric of AsiaIV. Mass transit means mass development

The demographic dividend Ratio of population between 15-64

50

55

60

65

70

75

JapanKoreaThailandVietnam

Percentage

Colliers International Source: United Nations, Department of Economic and Social Affairs (DESA)

Thailand is at the apex of one of its most dynamic and exceptional periods for economic growth

Reduced burden of dependants means more labour and capital channeled into output – fuels economic growth

Lower fertility rates – more women in the workforce – greater productivity

Smaller and wealthier household units - more demanding middle-class

Smaller but higher quality condo unit sizes catering for growing middle income population

The growth from the next two decades should support the ageing population in the future

Thailand’s Window of Opportunity

60

62

64

66

68

70

Colliers International Source: United Nations, Department of Economic and Social Affairs (DESA)

Percentage

The Rise of the Grey Baby Boomer

Net increase in 65+ population in Europe, North America and Japan

0

5

10

15

20

25

30

1975

-80

1980

-85

1985

-90

1990

-95

1995

-2000

2000

-05

2005

-10

2010

-15

2015

-20

2020

-25

2025

-30

2030

-35

2035

-40

5 year periods

Mill

ions

of p

eopl

e

Colliers International Source: United Nations, Department of Economic and Social Affairs (DESA)

Where will they come from?

Net increase in 65+ population

Japan

USA

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2000

-05

2005

-10

2010

-15

2015

-20

2020

-25

2025

-30

5 year periods

Thou

sand

s of

peo

ple

Net increase in 65+ population

Australia

Korea

UK

Scandanavia

Germany

0

500

1000

1500

2000

2000

-05

2005

-10

2010

-15

2015

-20

2020

-25

2025

-30

5 year periods

Thou

sand

s of

peo

ple

Colliers International Source: United Nations, Department of Economic and Social Affairs (DESA)

Consequences for Thailand

Specialized, transparent and simple retirement packages marketed abroad

Clear ownership structure for inheritance purposes More activities and facilities for active retirees Tap into booming medical/wellness tourism Clustered retirement communities based on language Special packages from hotels/serviced apartments Stiff competition from Malaysia, Vietnam, Philippines and

Cambodia

The New Economic Fabric of Asia

Exports from Thailand

0.00

200,000.00

400,000.00

600,000.00

800,000.00

1,000,000.00

1,200,000.00

1,400,000.00

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year

Millions of Baht

China

United Statesof AmericaEU (15)

ASEAN

Japan

Source: Bank of Thailand

The New Economic Fabric of AsiaExports from Thailand

0.00

100,000.00

200,000.00

1998

19

99

2000

20

01

2002

20

03

2004

20

05

2006

20

07

2008

Year

Millions of Baht

Germany

United Kingdom

Vietnam

India

Korea, South

Indonesia

Australia

Source: Bank of Thailand

The New Economic Fabric of Asia

Dramatic change in economic relationships in the next decade – what role will Thailand play?

Greater demand for all types of real estate from the region Regional players will demand cheaper rental options for

residential and office Bangkok could act as regional HQ for Asian and non-Asian

companies Importance of niche markets – specialized workforce – attractive

location – good infrastructure – effective governance

Mass Transit means Mass Development

-1,0002,0003,0004,0005,0006,0007,0008,0009,000

10,000

Units

Year

Supply of condo units 1km from Airport Link

New supply

Current supply

Source: Colliers International, Thailand Research

0500

10001500200025003000350040004500

Units

Year

Supply of condo units 1km from Thonburi BTS

New supply

Current supply

Source: Colliers International, Thailand Research

Thonburi comes of age

02,0004,0006,0008,000

10,00012,00014,000

Units

Year

Supply of condo units 1km from On Nut-Bearing BTS

New supply

Current supply

Source: Colliers International, Thailand Research

New condos on Sukhumvit

The Express and Rapid Transit Authority of Thailand estimates that commuting time now accounts for about one-quarter of the time spent at work with resulting negative effects on business efficiency and productivity

Mass transit connections are a massive spur for development New lines cause land and property prices to increase Condos within 200-500 metres of mass transit lines are sold at a

70-95% premium to condos more than 1km from the line The development of condos starts only shortly before

completion of project due to a long history of delays and cancellations in Bangkok and other cities

Mass Transit means Mass Development

The next ten years……………..

This new decade is a unique one for the prospects of prosperity and well being of the country

The enormous potential of the new decade is upon us, let us grasp it.

Thank you