Bangkok is seeing no active investment in property, with no matching in prices as both sellers and buyers are still hoping for the best bargains, according to Jones Lang LaSalle (JLL).

The company found there was no lack of interest in the market but most buyers are looking for distressed assets with deep discounts while sellers refuse to dispose of their lots at a loss although they have already lowered their asking prices, said JLL's managing director Suphin Mechuchep.

Umpon Thepnumsommanus, JLL's director of investments, said the company had continued to receive inquiries for distressed assets from investors looking for large land plots, office buildings or industrial properties.

At the same time, it has been appointed by several landlords to sell vacant land plots and sites for redevelopment into office buildings, several of them belong to companies looking to offload surplus properties and shore up their balance sheets.

"Whilst buyers are expecting to acquire the property at a deeply discounted price, sellers have yet to encounter financial conditions which would force them to accept losses. We have so far seen certain landlords only willing to reduce asking prices," he said.

With so few property investment transactions since last year, there is currently no benchmark in the market.

For example, land on Sathon Road was sold at 500,000 baht per square wah in 2005 before rising to 800,000 baht in 2008. But so far this year, there have been no transactions to support those price levels.

"Even if the land were put up for resale now, whether the owner would accept the price below the purchase value remains questionable," said Mrs Suphin.

Regarding the government's plan to collect taxes on unused land varying from 0.05% to 0.5% of the value which may need about two years to take effect, Mrs Suphin views that the land tax would not only help increase the government's revenue but also encourage owners to make use of their land.

Professional developers nowadays tend to focus mainly on land plots for immediate development rather than buying land without a specific and concrete plan of what and when to develop so they should be less impacted.

Other developed countries also have different property tax structures, which vary in terms of the percentage, the type of property and by whom the tax is collected.

source : www.bangkokpost.com