Property developers and investors in Thailand must strategically balance risk and reward amid persistent market uncertainties this year, according to property consultancy CBRE Thailand.
"Thailand's real estate landscape continues its dynamic evolution, demanding a strategic and agile approach to investment and development," said Roongrat Veeraparkkaroon, managing director of CBRE Thailand.
"Our analysis indicates while some sectors will experience continued pressure, others are well-positioned for robust growth, driven by shifting consumer behaviours, focused government initiatives and broader global dynamics. Adaptation and innovation will be crucial for success."
Retail segment
In Bangkok's diverse retail market, ranging from expansive urban malls to community-centred spaces, developers are investing in new projects and revitalising existing assets to meet changing consumer lifestyles.
However, total retail supply reached 8.25 million square metres in 2025, with an additional 300,000 sq m slated for completion this year. This new supply growth is projected to outpace tenant absorption, causing average occupancy rates to soften to less than 90%.
Roughly 75% of this new supply is concentrated in midtown and suburban locations, shifting the competitive landscape towards residential neighbourhoods where consumers are often more price-sensitive.
"Strong interest from international retailers, particularly in F&B and fashion, continues to underscore Bangkok's appeal for experiential spending," said Chotika Tungsirisurp, head of consulting and research at CBRE Thailand.
"The city remains a regional F&B capital, driving sustained growth in coffee and restaurant market entries. Fashion retail, especially international brands from Europe, view Bangkok as a high-reward destination. In 2025, China accounted for the highest percentage of new foreign brands [20%], followed by Japan and Europe [18% each]."
Competition in hospitality
Despite a challenging 2025 with fewer than 33 million international tourist arrivals, Thailand is well-positioned to attract visitors seeking medical care, wellness services and leisure travel, assuming improved stability and sentiment.
The country holds considerable potential for high-spending tourists in the expanding medical, wellness and meeting, incentive, convention and exhibition (Mice) markets. Instilling confidence in safety and delivering value to short-haul foreign tourists will be vital.
"Bangkok anticipates an influx of more than 4,300 hotel rooms in 2026, primarily within the upscale and luxury segments, though midscale products will continue to dominate the total supply at 43%," said Ms Chotika.
"While this new supply will heighten competition, it is expected to positively impact performance, with occupancy projected to climb by up to two percentage points and revenue per available room by 3-4%. Although room rate growth may be somewhat limited by new supply, currency strength and regional competition, the shift towards higher-end offerings should positively influence average daily rates."
Rather than focus on traditional occupancy and room rates, hotel operators are diversifying revenue streams through enhanced offerings and more effective cost management, noted CBRE.
Condo Market
The residential condo sector's consistent balance of risk and reward is expected to persist in 2026. CBRE expects more new launches in the luxury and super-luxury segments, supported by a 93% sales rate for existing supply.
"These upcoming projects will likely feature strong product differentiation, branded residences and unique selling points," said Ms Roongrat.
"Average asking prices in the downbeat market are expected to increase by up to 15% year-on-year, driven by the higher number of super-luxury launches, with an emphasis on privacy and exclusivity, supported by elevated amenities and services."
The midtown and suburban markets will continue to contend with high mortgage rejection rates, prompting developers to concentrate new launches in areas with clear demand drivers, such as transport hubs, universities and hospitals, she said.
These locations attract both owner-occupiers and investors. Intense competition from large-scale projects in the affordable segment will reduce average asking prices by up to 10%.
Low-Rise Housing
With increased unsold low-rise housing inventory, developers will meticulously assess demand before new launches. Buyer confidence remained low throughout much of 2025 due to uncertainties.
As a consequence, developers are expected to remain cautious in 2026, awaiting signs of improved market sentiment. New housing permits in the Bangkok Metropolitan Region fell by 30% in 2025, indicating weak developer confidence.
"The resale market has become significantly more active, primarily due to purchase certainty and financing availability, as well as the scarcity of new launches in lower segments," Ms Chotika said.
"The self-built housing market also remains an important sub-segment of housing demand. Launches of higher-end low-rise projects will be more selective, limited to experienced developers and phased to assess real demand and buyer confidence."
Prime office assets
The office market will remain active in 2026 and tenants will continue to benefit from favourable market conditions, noted CBRE. The flight-to-quality trend persisted in 2025, with many occupiers relocating to newer, higher-grade buildings.
Occupancy levels in the best Grade A+ buildings are rising, enabling landlords to increase rents and widen the gap between premium and older assets.
With limited new office supply anticipated over the next four years, many landlords have accelerated asset enhancement plans. Well-renovated buildings offering competitive rents in established locations will present compelling relocation opportunities, said the consultancy.
As a result of limited new supply, occupancy rates in prime buildings are expected to improve.
Net take-up in 2026 is projected to be slightly below 2025 levels, totalling around 100,000 sq m. CBRE's 2025 analysis revealed 95% of relocations involved upgrades or moving to a similar grade, a trend expected to continue.
"The best new Grade A+ offices in prime locations, with occupancy rates exceeding 80%, may see modest rental gains of up to 3% year-on-year in 2026," said Ms Roongrat.
"Conversely, rents in well-managed but older buildings are expected to soften further before stabilising by year-end, while unmanaged or unimproved stock will continue to face reduced occupancy and falling rental rates."
Industrial and Logistics
The industrial sector has been a standout performer and CBRE anticipates 2026 will be another active year for industrial land sales, supported by high pre-commitments and ongoing government support.
Demand for new serviced industrial land plots is expected to normalise in 2026 following four exceptional years, influenced by external factors such as geopolitical tensions and US policy uncertainties, which could potentially weaken Thailand's export growth.
"However, regional trade growth will encourage more companies to relocate to Southeast Asia, including Thailand," Ms Chotika said.
Increasing demand for ready-built factories is driving the growth of new supply chains, supporting second- and third-tier providers alongside established companies expanding manufacturing capacity. Low vacancy rates (less than 5%) and limited future supply are expected to persist.
