Thailand's shift towards alternative sectors: A 2025 outlook

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Thailand’s shift towards alternative sectors: A 2025 outlook

November 25, 2024 / By Anawin Chiamprasert

As Thailand’s core real estate sectors continue to face headwinds, a significant market shift is occurring. Investors and developers are increasingly focusing on alternative assets. This shift signals significant potential growth in sectors traditionally on the periphery of the real estate landscape. The subdued sentiment in conventional sectors such as mass-market residential, highly competitive office, and retail markets has prompted industry players to explore new avenues for growth. This strategic pivot is setting the stage for a transformative period in Thailand’s real estate by 2025.

Several alternative sectors are emerging as key focal points for developers and investors. Data Centres are at the forefront, with Thailand emerging as a potential regional data hub amid the rapid digital transformation sweeping Southeast Asia. The surge in demand for data storage and processing facilities has made this sector particularly attractive. Tech giants like Google, AWS, and Microsoft, have announced investment plans in Thailand. This trend is further supported by recent market entries from prominent industry players such as Evolution DC (Thailand)[1] and Equinix [2]. The 100% ownership scheme introduced by Thailand’s Board of Investment (BOI) highlights the sector’s growing importance for investors.

The Healthcare and Wellness industry is experiencing a similar growth trajectory and is set for significant expansion. Thailand’s ageing population and its well-established reputation for medical tourism have created a perfect storm for specialised healthcare real estate. The most prominent mixed-use projects across Greater Bangkok and regional tourism destinations are incorporating either healthcare or wellness facilities and services.

Although Industrial Estates are traditionally viewed as a ‘core sector’ in mature markets, they are considered an emerging asset class in Thailand. We see immense potential from regional manufacturing and distribution centres. These centres benefit from robust investment activities driven by the China Plus One supply chain relocation and the rapid expansion of the EV industry.

Perhaps the most controversial yet potentially transformative sector is the nascent Casino and Entertainment industry, which has been recently grabbing public attention. Potential policy changes, as the new government pushes forward with casino legalisation [3] could open up a new frontier for integrated resorts and entertainment-led township developments. This would tap into Thailand’s strong tourism industry and rail-based infrastructure investment. Unsurprisingly, many global land-based casino operators are eyeing several development precincts for potential integration.

As we look towards 2025, there’s a palpable sense of excitement in Thailand’s real estate market. Alternative sectors are poised to claim a larger share, and it’s fascinating to watch local developers adapt and evolve. Many are boldly venturing beyond their comfort zones, diversifying their portfolios by forging new partnerships and joint ventures to navigate these unfamiliar terrains. This trend is not only reshaping Thailand’s real estate landscape but also setting a new path for local players to capitalise on the next wave of growth in the dynamic property market.

[1] Accelerating Thailand’s Digital Ecosystem, Evolution DC (Thailand), a joint venture company with Central Pattana, announces a collaboration with International Gateway (IGC), 13 May, 2024
[2] Macao did it. Singapore too. Now Thailand looks to build casinos to attract tourist dollars, 1 September, 2024
[3] Equinix invests $500 million in Thai data centres, 30 October, 2024