Bangkok--20 Apr--CB Richard Ellis
The expatriate community in Bangkok grew by over 13.8% from December 2004 compared to December 2005. There are now 61,913 foreigners with work permits in Bangkok, according to the latest CB Richard Ellis residential rental report, this excludes diplomatic staff. 22% of the total number of expatriates were Japanese followed by Indians (12%), Chinese (9%), British (9%), and American (7%).
These numbers are expected to grow, especially Japanese expatriates due to the growth in the number of Japanese companies manufacturing in Thailand.
The supply of the apartments in Bangkok’s Central Areas increased slightly in 2005 to 9,953 units, a 1.4 % increase from the third quarter of 2005, 142 new units in 3 building were completed in the fourth quarter of 2005 namely Sofitel Residence Asoke on Soi Sukhumvit 19, BT Residence on Soi Sukhumvit 8, and Blossom Ville on Soi Sukhumvit 63/4. Apartments are single ownership developments rather than multi ownership condominiums.
Sukhumvit is still the most popular area due to its wide variety of retail and entertainment facilities. This area accounts for 69% of the total stock in downtown Bangkok. Grade A apartments to comprise 1,526 units, only 15% share of the total stock. Key characteristics of grade A apartments are easily accessible with a good location, design, layout, interior, property management and adequate facilities for residents. Overall occupancy rates increased to 90.6 % and rents for grade A apartment properties rose by 1.4% at the end of 2005.
There was competition from new multi-ownership condominium developments where some owners have rented out their units. The best new condominium developments such The Lakes and The Legend Saladaeng have been achieving rents of over 600 Baht per square meter per month.
“Today roughly 60% of expatriates receive a housing allowance from their companies. The balances of expatriates are on lump sum salaries,” according to Mr. Theerathorn Prapunpong, head of Residential Leasing Services at CB Richard Ellis, “these tenants want modern accommodation with hotel style bathrooms and European kitchens”.
Much of the rental stock in Bangkok is more than ten years old and only new or recently refurbished developments are able to achieve the best rentals.
CB Richard Ellis expects rentals for new accommodation to increase. Expatriate numbers are expected to grow. There will be 513 new apartment units completed in 2006 and 2007. There will also be 5,279 condominium units. Many of the new condominium units are aimed at the local market with much smaller sized units and will not compete directly with apartments. Based on recent completions, more than 50% of new luxury condominium supply will be owner-occupied and the balance available for rent. Only the best decorated and designed properties will get the highest rents.
Demand and supply are growing at similar rates but because much of the existing stock is old, the gap in rentals achieved between new and old developments is greater.
Apartment Market Facts Sheet
As of 4th Quarter 2005
Location Sukhumvit
District Klongteoy / Wattana
Status Downtown
Resident Population1 122,574 (Klongteoy District)
80,204 (Wattana District)
Existing Apartment Units 321 Projects; 9,953 Units
in Bangkok Downtown
Existing Apartment Units 220 Projects; 6,913 Units (63% of the total supply)
in Sukhumvit
Future Apartment Projects At least 8 Projects; 199 units to be completed in 2006-2007
in Sukhumvit
Average Occupancy Rate Overall 91.3%
in Sukhumvit Grade A 92%
Grade B and below 91%
Average Achieved Rentals Overall Baht 312 / sq.m. / month
in Sukhumvit Grade A Baht 377 / sq.m. / month
Grade B and below Baht 247 / sq.m. / month
Source: CBRE Research & Consulting Services
1 Based on statistics from the Bangrak and Sathorn Districts Offices, as at March 2005
For more information please contact:
Mr. Theerathorn Prapunpong
Associate Director — Residential Leasing Services
02 654 1111 ext.421
Ms. Ngamjai Jearrajarat
Corporate Communications Manager
02 654 1111 Ext. 522