Bangkok - Thailand's property sector, hard-hit by the global recession and political instability since the last quarter of 2008, has yet to witness the kind of fire sales seen in the Asian crisis of 1997, Jones Lang LaSalle (Thailand) said Wednesday. While the economic slowdown has led to falling office rents in Bangkok, to date there have been few investments in distressed assets largely because owners are not distressed, the international property consultant said in their latest property review.

"The gap between buyers and sellers' prices expectations has continued to be a factor in curtailing property investment transactions," Jones Lang LaSalle noted.

"With the economy and the real estate market in a downturn, buyers expect to buy quality property assets at the deeply discounted prices seen during the tom yum koong crisis, an expectation which just isn't being met by owners who are currently liquid and not overly leveraged," it added in the company's most recent sector review.

"Tom yam koong," the name of Thailand's famous spicy shrimp soup, was used to describe the financial crisis of 1997 that started in Bangkok and was blamed largely on over-investment in property and excessive bank lending to what turned into a property bubble.

"Many of the distressed sales following the 1997 financial crisis were the result of banks needing to restructure an abundance of non-performing loans, a condition which does not exist today," Jones Lang LaSalle said.

The company, however, noted that while there had been few property investments in recent months, office rents were on the decline.

The average Grade A office rentals in central Bangkok had fallen from 671 baht (19.95 dollars) per square metre per month at year-end 2008 to 662 baht (18.70) at the end of first-quarter 2009.

"Real estate in Thailand has increasingly become a buyer/tenant market," Suphin Mechuchep, Managing Director of Jones Lang LaSalle, said. "Softening demand has resulted in stronger competition in both the residential and office markets, with more incentives being offered to buyers and tenants."(dpa)