Tag: projects

  • Bangkok’s Real Estate Market Poised For Resilience Amid Economic Uncertainty

    Bangkok’s Real Estate Market Poised For Resilience Amid Economic Uncertainty

    According to a recent JLL report, six new projects are poised to make their debut in the Bangkok market by 2025, boasting an impressive average presales rate of 70%. However, most developers are adopting a conservative stance, prioritizing inventory clearance and delaying new project launches until market confidence sees a rebound.

    Market Dynamics: Rentals on the Rise

    “In the near term, rental rates are expected to surge due to high loan rejection rates, with renters increasingly leaning toward the security and flexibility that rentals provide,” the report elaborated. Despite the optimistic rental outlook, capital values are projected to rise more slowly, held back by cautious investor sentiment. Market yields are anticipated to stabilize at 5.2% through 2025, indicating a steady, albeit slow, growth trajectory.

    Quarterly Recovery in Luxury Condos

    Bangkok’s luxury condominium sector is witnessing a slight recovery, with the second quarter showing signs of resurgence, spurred by interest rate cuts and relaxed loan-to-value (LTV) measures. This bounce-back has allowed the market to return to pre-pandemic levels, although challenges remain from the economic downturn and reciprocal tariffs imposed by the US.

    Prime Apartments: A Hot Market

    Prime apartments are maintaining strong traction, with half of the total inventory achieving full occupancy during the last quarter. Vacancy rates have now fallen for two consecutive quarters, decreasing by 51 basis points to 4.2%, largely driven by corporate relocations.

    Economic Uncertainty and Its Effects

    Despite the emergence of positive trends, the luxury condominium inventory has remained steady at 72,500 units, with no new completions noted for the second quarter. Economic uncertainties have led buyers to postpone their decisions, prompting developers to be particularly prudent regarding future launches.

    Expansion of Prime Apartment Stock

    The prime apartment sector saw its stock grow to 4,700 units in Q2 2025, thanks to the addition of 39 Luxury Suites. This bolstered the Central East submarket’s status as the go-to location for prime living spaces in Bangkok.

    The Rental Market’s Continuing Surge

    Capital values have ticked up by 1.5% quarter-on-quarter, reflecting a moderate growth tempered by broader economic challenges. With demand soaring from both domestic and international renters, gross rents have risen to THB 757 per square meter per month, marking the thirteenth consecutive quarter of growth at an impressive 4.0%. This strong performance in the rental market has nudged market yields up to 5.2%, showing that sometimes economic upheaval can lead to surprising opportunities.

    Questions & Answers

    What is the average presales rate for new projects in Bangkok?
    The average presales rate for the expected six new projects by 2025 is 70%.

    How has the luxury condominium market in Bangkok performed recently?
    The luxury condominium market saw slight recovery in Q2, thanks to interest rate cuts and relaxed loan-to-value measures, bouncing back to pre-pandemic levels.

    What trends are emerging in the rental market?
    The rental market has experienced strong demand with gross rents growing for the thirteenth consecutive quarter, increasing by 4.0% to THB 757 per square meter per month.

  • Wind projects offer promising future

    Wind projects offer promising future

    With growing innovation in the sector, experts and investors note that wind power projects in Vietnam will be feasible with an 8-9 US cent per kWh feed-in-tariff.

    Vu Chi Mai, senior project officer at Geman Technical Cooperation (GIZ), highlighted at a wind power forum hosted by the Asia Wind Energy Association last week that experts are now more optimistic regarding the foreseeable cost reductions in the industry.

    The newfound optimism, Mai noted, may be coming as a result of technological advancements that have yet to be implemented.

    The forthcoming advances suggest that wind energy is not as mature a technology as was previously thought, Mai added.

    “Wind power technology and its advancing development is cutting costs and time for developers,” Mai said, highlighting that developers see a 9 US cent feed-in-tariff (FiT) as bankable.

    Late last year, GIZ sent a proposal to the government stating that the best way to make projects feasible is to offer a FiT of 10.4 US cents.

    Mai explained that per request from the Ministry of Industry and Trade (MoIT) to get the real cost of wind production in Vietnam, GIZ has conducted a study which has been based on the operational costs of the three existing wind farms in Vietnam (the first wind farm has been operational since 2011).

    A bankable FIT of 10.4 US cents per kWh has been then suggested so that the government target of 800 megawatts by 2020 could be reached.

    William Gaillard, regional sales director at Gamesa Siemens – the exclusive supplier for the 40MW Dam Nai  project in the central province of Ninh Thuan, said that “Now you can have profitable wind projects that few years before was not possible, thanks to larger rotor size and bigger generator, but also larger volumes and economies of scale from our side.

    Also other suppliers need to make some efforts. Balance of plant like civil and electrical works also need to drive cost down.” Gaillard added that even current of 7.8 cents can make projects bankable.

    He pointed out that in Vietnam there is very little experience and so risks are high and contractors expect high margins. But the key issues is to get a bankable power purchase agreement (PPA), according to international standards.

    Olivier Duguet, CEO of The Blue Circle – developer of the Dam Nai project, and the first foreign-backed wind power project in Vietnam – told VIR that “the current FiT is perfectly suitable for 2,000MW wind projects in Vietnam.”

    Duguet said focusing on the FiT is the wrong approach. Investors should instead be focusing on conditions that attract long-term debt financing for projects in Vietnam, as this is the only way to develop wind power within the country. Only the very best projects in terms of wind resources and installation costs will be financially viable in the current environment, he added.

    A representative of NRG Systems GmbH noted the wind power industry in Asia is experiencing strong growth, and emerging economies in the region continue to invest heavily in it.

    According to MoIT, Vietnam’s power industry has been facing many challenges around the shortage of energy sources.

    The Vietnamese government has approved several programmes to encourage the development of renewable energy in the country, including the Renewable Energy Development Strategy to 2030, with a vision to 2050.

    The strategy aims to increase the production of electricity from wind sources to 2.5 billion kilowatts by 2020, 16 billion kilowatts by 2030.

  • Trump’s Indonesia projects proceed despite potential conflicts of interest

    Trump’s Indonesia projects proceed despite potential conflicts of interest

    One resort, planned as the largest in Bali, will overlook a spectacular Hindu temple. The other, in the verdant hills of West Java, will adjoin a theme park. The properties will be so luxurious, the Trump Organisation says, that even an impressive five-star rating will not do them justice. So it will give them six stars instead.

    Even as President-elect Donald Trump promises to end foreign business deals that could pose conflicts of interest — there will be “no new deals” while he is in office, he has said — his company is moving ahead with two Indonesian projects that illustrate how tricky that pledge might be.

    None of the construction work to build or renovate structures at the Indonesian resorts has even begun, but Mr Trump has forged relationships with powerful political figures in Indonesia, where such connections are crucial to pushing through big projects.

    That tangle of relationships includes an Indonesian business partner who aspires to high office; a powerful politician accused of trying to extort billions of dollars from a United States mining company; and Mr Trump’s new adviser on regulatory issues, Mr Carl C Icahn, a top shareholder in the mining company.

    The resort projects, which a Trump spokeswoman said last week were “binding contracts”, have created a grey area of conflicting interests that could be hard to separate from an array of issues facing the US and Indonesia, including trade and contested claims over the South China Sea.

    Mr Trump’s local partner on the resorts, Mr Hary Tanoesoedibjo, is a billionaire media mogul with his own political ambitions. He ran for vice-president of Indonesia in 2014 and is organising a political party for another possible run at national office in 2019. If Mr Tanoesoedibjo or his party wins a major role in government, the potential conflicts could escalate significantly.

    “You could have two world leaders that are business partners,” said Professor Richard W Painter, who served as a White House ethics lawyer during the George W Bush administration. “It makes it almost impossible to conduct diplomacy in an even-handed manner. That does not work.”

    Through the partnership with Mr Tanoesoedibjo, Mr Trump has gained access to some of Indonesia’s top political figures, including Mr Setya Novanto, Speaker of the House of Representatives, who was temporarily forced to surrender his leadership post because of corruption allegations in 2015. Mr Novanto was heard on an audio recording seeking a US$4 billion (S$5.8 billion) payment from the US mining giant Freeport-McMoRan.

    Months before the recording came out in December 2015, Mr Trump met Mr Novanto during the presidential campaign at Trump Tower. After their lunch, Mr Trump pulled Mr Novanto before the cameras at a news conference and called him “a great man”, adding, “We will do great things for the United States.”

    The knot of potential conflicts includes Mr Icahn, the billionaire investor who will serve as a special adviser to Mr Trump. He is one of the largest shareholders in Freeport, which does so much business in Indonesia that it is the country’s largest taxpayer and has been seeking to extend its mining contract with the Indonesian government.

    “This stuff is so murky,” said Ms Karen Hobert Flynn, president of Common Cause, a nonprofit group that has called for Mr Trump to sell off his businesses to avert conflicts of interest. “It is not going to be clean moving forward. There are going to be complications as these projects move forward.”

    Mr Trump has provided little clarity about what he means by “no new deals”, a vow made in a Twitter post he sent out in mid-December. His aides suggested in interviews last week that even if construction had not started on a project, the Trump Organisation would move ahead if it had a binding agreement.

    For Mr Trump, the Indonesian deals are licensing and management agreements in which he provides the use of his name and his company manages the resorts.

    Even though no structures were built, Mr Trump secured a considerable payout on the two deals, according to a financial disclosure report that listed payments ranging from US$1 million to US$5 million for each of the projects between January 2015 through May 2016. That is far more than the US$400,000 salary paid to the President, which Mr Trump has said he will decline.

    Mr Trump created the corporations that manage these projects — including DT Bali Hotel Manager and DT Lido Hotel Manager — in late June 2015, just a week after he declared his intention to run for President.

    His companies have operations in at least 20 countries, including the Philippines, India, Turkey and Britain, but the full extent of his foreign financial ties is unclear because he has refused to release his tax returns or disclose the identity of his lenders.

    In addition to the no-new-deals pledge, Mr Trump has said that his sons, Eric and Donald Jr, along with other executives, will manage the family’s global real estate business.

    The Trump Organisation has recently moved to resolve potential controversies, in part by closing family foundations. It has also dropped a number of its proposed projects, including Trump Office Buenos Aires in Argentina; Trump Towers Rio and Trump Hotel Rio de Janeiro, both in Brazil; Trump International Hotel & Tower Baku in Azerbaijan; Trump Tower Batumi in Georgia; and Trump Riverwalk in Pune, India, representatives from the Trump Organisation have said last week, in response to questions.

    But other projects — including some on which construction has not started or is not well underway — are moving ahead, including Trump Tower Mumbai and a Trump tower in Gurgaon, both in India; Trump Tower Punta del Este in Uruguay; Trump International Golf Club, Dubai, and Trump World Golf Club, Dubai, both in the United Arab Emirates; and Trump International Hotel & Tower Vancouver, in Canada, the Trump Organisation confirmed.

    Ms Amanda Miller, the Trump Organisation spokeswoman, said of the two Indonesian projects: “Construction is well underway and will proceed as planned.”

    In fact, construction has started only on a golf course and toll road as part of the Lido Lakes resort in West Java. Separating the enterprise from politics may also be difficult because Mr Tanoesoedibjo’s MNC Group is building the road to the site as part of a government highway project.

    No new structures have been built at Lido Lakes or at the resort near the stunning Tanah Lot temple in Bali. A 20-year-old hotel, the Pan Pacific Nirwana Bali Resort, stands on the Bali property and could be renovated to create a Trump hotel, but that work has not begun.

    The two resorts will give the Trump brand a high profile in Indonesia — which has the world’s largest Muslim population — with the Trump name adorning two luxury hotels and premier golf courses as well as high-end villas and condominiums. Yet the US President’s name on the projects could also make them potential targets. During the campaign, Mr Trump made statements about Muslims widely viewed as inflammatory. US hotels in Jakarta have been attacked by terrorists several times.

    On Wednesday, Mr Trump accused the news media of exaggerating any potential conflicts presented by his business holdings. “It’s not a big deal; you people are making it a big deal, the business,” Mr Trump said on the steps of his Mar-a-Lago resort in Florida, where he was spending the holidays. “They all knew I had big business all over the place.”

  • UOB Indonesia Projects 5.2% Growth in 2017

    UOB Indonesia Projects 5.2% Growth in 2017

    Bank UOB Indonesia projects Indonesia’s economy to grow next year despite the global slowdown. UOB Indonesia president director Kevin Lam said Indonesia’s economy will grow steadily at around 5.2 percent in 2017, up from this year’s 5.0 percent.

    Kevin is certain that the government will maintain the country’s growth momentum through various economic policy packages aimed at boosting investments. Several infrastructure projects that are currently underway are also expected to help achieve economic equality and income growth.

    “The projects also create jobs, thus contributing to household consumption,” he said in a press conference after the UOB Indonesia Economic Outlook 2017 event in Jakarta.

    Kevin said the government’s effort to attract investors by releasing policy packages—comprised of relaxations and deregulations—is working. According to the UOB Asian Enterprise Survey 2016, nearly a quarter of the respondents, which were Asian companies, chose Indonesia as a destination for their expansions in the next three to five years.

    Last week, Finance Minister Sri Mulyani Indrawati projected that Indonesia’s economy in the fourth quarter will reach 5.0-5.1 percent, “due to fiscal expansions.”

    The minister said state institutions will have plenty of expenditures ahead of the year-end, and the state’s spending figure will reach 96 percent of the target.

  • OpenHydro eyes 300 MW of tidal power projects in Indonesia

    OpenHydro eyes 300 MW of tidal power projects in Indonesia

    OpenHydro, the tidal turbines business of French naval defence group DCNS, will seek to deploy 300 MW of tidal energy capacity in Indonesia by 2023 under a new partnership with local sector player PT AIR.

    OpenHydro said this week it has entered into a memorandum of understanding (MoU) with PT AIR to create an alliance aimed at driving forward the development of a tidal energy industry in Indonesia. The two companies have been working together over the past 18 months and during that time have identified at least 10 locations suitable for commercial-scale projects.

    The pair expect to start with a tidal energy array of up to 10 MW, for which a site will be selected over the coming months. The pilot system is planned for deployment in 2019. It will use European equipment provided by DCNS and its unit, plus locally manufactured content.

    OpenHydro noted that local industrial facility options have been identified and will be assessed by the partners.

    “The nature of the equipment involved in tidal energy projects results in a high level of local manufacturing content,” commented Thierry Kalanquin, chairman of OpenHydro and vice president of energy at DCNS.