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Current Situations in the Real Estate Business
Futuristic city: This term should clearly reflect the growth of Thai real estate. which has two perspectives
1. The view of the domestic market (Thai people)
2. The international perspective (foreigners)
Both are sensitively contrast in many aspects related to the social behavior. This is common in many developing countries like Thailand. From the Thai point of view, we may think that real estate is oversaturated, the price is too high, unaffordable and most of the holdings are about buying and selling, often changing hands. There are also complications from the land and building tax and these factors affect the feelings of property owners.
On the oher hand, the viewpoints of foreigners are very different . They see Thai real estate as interesting, and attractive to invest in. For them Thailand is a good place to live, whether in terms of price, location, natural resources, as well as the culture, people, food and lifestyle which they find very interesting and unique.
However, the current Covid situation, which has had a huge impact on businesses, including real estate, will be a test of competence and morality for evereyone to see who will survive in this difficult period and how this is accomplished.
Sustainability
It has been difficult to run a business during this crisis. The key is to maintain the integrity and quality long enough to be respected in the society and the nation until it is accepted as sustainability.
In the worldwide scheme, the United Nations has established the Sustainable Development Goals (SDGs), which are principles and goals that cover all groups of organizations, whether business organizations or government agencies. In Thailand, we have announced the new economic model called Bio-Circular-Green Economy (BCG) as a national agenda to create value and innovation in compliance with the sustainability policy both economically and socially.
In fact, the real estate business is expected to play a vital role in fostering the balance of nature by reducing and eliminating the destruction of natural resources. Even though some activities do not generate more income for the real estate business like installing wastewater management system, they still do it as a social benefit.
Thus, the real estate business is a fundamental factor in creating human capital, and building family as an institution. Futhermore, it connects to society as ,by nature, human beings are social animals. We live together as a community, growing as a society and developing into a city (World Urbanization Prospects).
Thailand is a country in the ‘Lower-Middle Income Country’ category with the highest urban growth rate, There are both advantages and disadvantages, much like a two-sided coin. On the good side, people will have access to a better quality of life and more convenient services, on the other hand being a city is destructive. We use the natural resources, cause polution, and invade the natural area. As real estate developers, we have to be concerned about these and try to create balance by using a creative economy, thereby establishing sustainability.
Strategies for Building Sustainable Networks and Partners in Real Estate Business
Real estate requires a large number of people from different walks of life, including cooperation from many external parties. In order to become successful, each of these real estate projects has to overcome many obstacles.
Therefore, building a network of cooperation can be considered an important aspect indicating the success of each organization. The clearer strategic approach to cooperation and maintaining partners an organization has, the better competitive advantages it will have.
At present, building a network of cooperation is not only a handshake between domestic organizations but also developed in multinational organizations (GLOBAL AND UNIQUE PARTNERS) to promote, develop, and share knowledge, technology and expertise to create new and better standards, leading to the demand generation.
Therefore, real estate development in traditional perspectives and forms has been rapidly changed. Creativity and new business models need to be swiftly developed to respond to consumer behaviors.
Moreover, the ownership and the uses of real estate have been changed by industrial technology and digital transformation, resulting in easier global economy cooperation and real time connecting. This includes Fin Tech investment innovation which will incorporated into this business in the near future while ownership and sales transactions will be on the ‘block chain’ more.
These phenomena will make buying-selling, owning, changing the right to use the real estate easier and push these activities beyond previous limitations. For instance, dormitories, condominiums, hotels, apartments, offices are all transformed into one category. (under the legal restrictions)
I believe, within the next 10 years, there will be a real estate regulatory guillotine in response to consumer behavior as the law must be consistent with the economics change.
On the other hand, real estate developers need to consider that the customers also have developed alliances as well. In order to build a network of cooperation until becoming a partnership, goal synergy is needed or at the least we all have to go in the same direction. That is called ‘Synergy and Sustainability’.
As the business world has evolved into a sharing economy, creating a value chain that can create a genuine value instead of creating only business profit is preferred. The genuine value of the real estate business is passing on a business ideology that will enhance people's quality of life.
Particularly in the difficult situation created by the COVID-19 epidemic, it is an important pressure point that will push real estate developers to focus on their improvement more intensely. They will need to use more critical thinking to analyze how to create a better supply with less cost.
Another important factor that promotes networking and alliances is a code of conduct. Maintaining good business ethics will be a panacea that has enormous persuasive power to create cooperation among entrepreneurs in Thailand and across the globe.
TURNING POINT
We have to accept and focus on business under unusual circumstances. Management strategy planning must consist of crisis management and adaptation, together with the serious focus on asking key questions, such as how can we develop real estate to contain the genuine value and under what principles, theories and business philosophies? How do we target people? What considerations do we give for youth, for the elderly, or for environmental conservation, including good governance? In fact, the ultimate strategy is to be considerate. Using ‘social listening’ that listens to the hearts of the eco systems. The only way to win their hearts is using our own. This is the strategy to build sustainable networks and partnerships in the real estate business.
Dr. Apichat Prasitnarit
President of Real Estate Trade Association and Partners
