Condominium Market Remains Strong in Key Bangkok Areas

Bangkok Condo Finder on October 7th, 2015 with

According to market studies undertaken by the well-regarded Knight Frank Thailand company, it seems Bangkok’s condominium sector remains buoyant despite the general economic downturn and rising household debts.[1]

The numbers are especially strong in the Sukhumvit-Prakanong and Petchaburi-Ratchada areas of the capital. Price levels for condominiums in these two specific locations were still adjusting upwards while supply increased in the first half of this year.

In the Sukhumvit-Prakanong area, average condo prices were up to 226,000 baht per square metre, which represents an increase of almost 50 percent from 2014 figures.

For condominiums in the Petchaburi-Ratchada area, average condo prices were up to 111,000 baht per square metre, and that reflects an increase of up to 28 percent from 2014 prices. More importantly for developers and real estate agents, sales of newly-launched condos remained solid, with no sign of decline.

Knight Frank Thailand noted that between 2008 and this year there were 46,363 units launched for sale in the Petchaburi-Ratchada area. During the first six months of this year 4,593 units were launched, with an average selling price of 110,454 baht per square metre. That compares to 2014 when the average selling price was 86,486 baht per square metre.

Knight Frank Chart

What is notable, according to Knight Frank, is that the sales rate for condominiums launched during the first half of this year was 29.37 percent. ‘Compared with the past three years, this rate is considered to be stable, without decline despite the general market downturn (the sales rate for newly launched condos each year since 2011 has been 52 to 62 percent of the newly launched units.’[2]

For so-called Grade A condominiums in the Petchaburi-Ratchada area, prices per square metre ranged from 116,667 to 159,173 baht. For Grade B condominiums, the price range was between 66,429 and 112,857 baht per square metre.

In the Sukhumvit area, between Sukhumvit Soi 1 and Prakanong, 1,974 condo units were launched in the first half of this year. This was a similar rate to the past three years, but prices have jumped by as much as 50 percent. It is quite significant that the average selling price in the first half of 2015 was around 226,344 baht per square metre, whereas in 2014 new projects averaged 51,396 baht per square metre.

Part of the reason for this huge jump may be because many of the newly launched projects tended to be Grade A premium level. Another reason is simply the scarcity of available land in the city centre.

Condo supply across Bangkok at the end of the second quarter stood at 362,697 units, a strong 23.9 percent increase from the same period last year. Of this number, 309,388 had been sold by the end of June this year. Of the remainder left for sale, only 5,168 were in the city centre, while 38,163 were located on the so-called periphery.[3]

These peripheral areas are those where new mass transit routes have been established, or are planned to be built and opened within the next few years. For example, they include parts of Bang Na and Thonburi as well as Chaeng Wattana, Srinakarin and Phetkasem roads.

Samut Prakarn Leads the Market in Ready-Built Factories and Warehouses for Rent

Away from the heady condominium marketplace of Bangkok, the researchers of Knight Frank Chartered (Thailand) Co., Ltd. recently released the results of an in-depth survey the firm had conducted into the market for ready-built factories for rent.

As an economic indicator, the news is not especially good, although it may be argued it is far from being as poor as it could be.

In the first half of this year the supply of such factories had grown by 58,927 square metres to total 2,607,014 square metres. Around 2,010,098 square metres have been rented or 71.1 percent of the total supply, which represented a decrease from 77.6 percent in mid-2014.[4]

The three areas where factory space increased were in Ayutthaya (by 16.643 square metres), Chonburi (12,631 square metres, and Samut Prakarn (12,774 square metres).

All three areas are close to Bangkok as well as production hubs, especially Samut Prakarn and Chonburi with their industrial parks and proximity to the Laem Chabang port.

Ayutthaya also contains many factories in various industrial parks. The ready built factories in these areas have been of particular interest to small scale factories engaged in spare parts production, thanks to the convenience in sending their products to the larger factories for further processing. The area with the most vacant ready built facotry space was in Rayong province, with up to 197,499 square metres of vacant space. This was followed by Ayuthaya province with 167,762 square metres of vacant factory space. As for Chonburi and Samutprakarn, there were just 41,457 and 39,661 square metres of vacant factory space, respectively.

The Samut Prakarn area has bucked the decline trend of the past year by actually seeing an increase in occupancy for rental warehouse space from 78 percent to 83.5 percent in the past year. This growth was despite the fact that Samut Prakarn, along with factories in Chonburi and Chachoengsao provinces had relatively high rents.

Rents were in the 230 to 250 baht per square metre range for ready-built factories situated within industrial parks. For built factories in the same provinces, but located outside industrial parks, rents were generally lower at 150 to 170 baht per square metre.

The warehouse sector has also seen a drop in overall occupancy as at the middle of this year. The amount of total warehousing space at the end of June 2015 was 3,468,530 square metres. This showed an increase of about 101,327 square metres of new supply. The occupancy rate stood at 78.2 percent, a drop from the 79.8 percent in mid-2014. The decline is especially noticeable in Ayutthaya province which has seen a 10 percent drop in just a year, from 84.9 to 74.9 percent occupancy.

On the whole, rents were stable, without upward adjustment, due to the relatively large increase in warehousesupply which boosted competition in the warehouse market sector.[5]

 

[1] Spectrum, 20/9/15 p.20

[2] http://blog.knightfrank.co.th/category/knight-frank-global-news/residential accessed 28/9/15

[3] Spectrum, 20/9/15 p.20

[4] http://blog.knightfrank.co.th/category/knight-frank-global-news/industrial accessed 28/9/15

[5] ibid.

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