BANGKOK -- Massive building developments are springing up across Southeast Asian skylines, with historic projects underway in Thailand and Indonesia backed by free-flowing cash from overseas.
A central-Bangkok project set for completion in 2026 will be Thailand's biggest-ever private property development with a price tag of 120 billion baht ($3.95 billion). Just outside Jakarta, another massive project is being built for about 278 trillion rupiah ($19.6 billion), the largest real estate project Indonesia has ever seen.
But as these redefining projects begin to take shape, so are fears of an oversupply in residential and office space and uncertainties over the steady supply of foreign investment that has fueled the building spree. An overabundance of available property combined with a funding pinch may cast a shadow over similar efforts throughout the region.
Thai conglomerate TCC Group has high hopes for its One Bangkok development in the heart of the capital. At least 60,000 people would work in the "small city" when it is completed, said a TCC executive.
One Bangkok's 167,000 sq. m. land area -- roughly twice the size of Tokyo's Roppongi Hills development -- will house five office towers and five luxury hotels, including the city's first Ritz-Carlton, plus three condominium buildings and other facilities.
Indonesia's Lippo Group has a similar plan underway in its Meikarta "township" project near Jakarta, the capital. The development is set to include housing and office space as well as school and hospital facilities, with its first phase aimed for completion in 2021.
This historic wave of developments throughout Southeast Asia has been fueled by foreign investors, flush with cash from loose monetary policies.
"As this cash glut flows outward, projects around the world -- primarily in Southeast Asia -- are growing larger in scale," said Mari Kumagai, a head researcher at real estate services provider Colliers International Japan.
But the region's real estate markets have already begun to overheat, and signs of a downturn are appearing.
In April-June surveys of international real estate companies by the U.K.'s Royal Institution of Chartered Surveyors, 67% of respondents in Indonesia said the market as heading downward, as did 54% of those in Singapore, 51% in Malaysia and 44% in Thailand. Only in the Philippines did those who perceived improvement outnumber those who saw a downturn.
Office space vacancy rates remain high several cities. In Kuala Lumpur, the rate ticked up 1 percentage point on the year to 23.5% in January-March. In Putrajaya, Malaysia's administrative center, it reached the worst-ever reading of 57.6%. Jakarta's rate has been stuck at about 25%.
An executive at Singha Estate -- the real estate arm of a large Thai builder -- said the company, which tends to be aggressive, has begun to take a more cautious stance.
Singha Estate recently postponed the sale of condominiums it is building in Bangkok to February from its initial target of this month. Demand for condos was thriving in Thailand last year, with even weekday model-room showings of units going up for sale thronged with viewers.
But for April-June period this year, just 15.7% of condos fresh on the Thai market had sold, an all-time low.
An analyst with U.K. real estate agency Knight Frank said property developers were being forced to rethink ongoing projects and update strategies.
Meanwhile, the once reliable stream of investor money that has supported Southeast Asian property prices is growing uncertain. For instance, with the baht growing stronger against the yuan as China's economy slows and the U.S.-China trade war drags on, Chinese money that has made up just over 40% of foreign investment has begun to retreat. If that well runs dry, the developments spreading across the region could take a hit.
