Bangkok CBD condo investment is not a lost cause despite expanding supply and slower growth in the number of expats working in the Thai capital, according to CBRE Thailand. However, it is vital that condo investors do their best to meet tenant requirements in a competitive landscape.
“The increase in supply and limited growth in demand means that the market is competitive, but there are still opportunities for both apartment developers and buy-to-rent condo investors. The key factor is to understand tenant requirements so that investors can maximise their occupancy and rent per square metre,” CBRE Thailand research noted.
As the most sought after rental group, expat tenants working in Thailand drive Bangkok CBD condo investment. This group prefers to rent units in downtown areas close to BTS or MRT stations. CBRE noted that expat growth in Bangkok has been modest during the past few years while average monthly rental budgets have remained flat.
This comes during a time when more condo buildings are being completed by developers. CBRE Thailand estimates there are currently 25,000-30,000 units in Bangkok’s CBD owned by investors with more on the way. This has created a lot of competition, but the situation isn’t dire as some are stating. However, buy-to-rent condo investors must be willing to outfit units to meet the changing requirements of tenants while keeping rents competitive.
This means Bangkok CBD condo investment must be done carefully. Like all investment, there is risk involved. But it’s possible to navigate this by studying the market.
Best places for Bangkok CBD condo investment
Research from Nexus Property found the Phrom Phong and Thong Lor neighbourhoods were the best place for Bangkok CBD condo investment. Condo prices have risen by more than 40 percent since 2013 in these areas. Additionally, Thong Lor provided investors with 66 percent total returns (rent and sales combined), the highest total in the Thai capital.
Rental rates here are among the highest in the city, averaging close to THB 1,000 per square metre per month in the Phrom Phong and Thong Lor neighbourhoods. The total is one of the highest in Bangkok surpassed by only the peak luxury areas of Wireless Road and Chit Lom.
Developers have noticed both trends and are now creating projects that meet the demands of renters and investors. For example, Habitat Group launched Walden Sukhumvit 39, a project in Phrom Phong, that caters to Bangkok CBD condo investment.
“High-end condominiums continue to grow in popularity, attracting both Thai and international buyers as well as investors. With Grade A locations scarce, especially along Sukhumvit Road and the BTS route, land prices are at a premium, which in turn has meant prices for condominiums in Sukhumvit 39 have grown exponentially over the past five years,” Chanin Vanijwongse, Habitat Group chief executive officer, explained.