Despite a sluggish market, some developers are still launching new projects in central Bangkok.
Photography by Jan Yong
The start of 2016 has been sluggish for Bangkok’s property sector, and this is despite the government’s attempt to stimulate the property sector through a series of short-term measures such as cuts in the fees for housing transfer and mortgage. Interestingly, Bangkok developers who were on a building spree a few financial quarters ago have retrenched their staff, choosing to concentrate on shifting their current stock as opposed to launching new projects.
Bangkok’s top developers have adapted to the different environment through changes in their operating strategies with perhaps Pruksa Real Estate Development PCL making the most surprising operational shift, announcing that they will restructure by setting up a “holding company” to facilitate expansion into new businesses. Pruksa has not given specifics on the “new businesses” they are planning to expand into, however analysts speculate that this is an attempt to diversify their operations to reduce its exposure to property sector related risks.
This brief overview might give investors the feeling that it’s all doom and gloom; however it is important to note that Bangkok is comprised of a variety of areas and properties at different market-levels which are each performing differently. While condos at the lower-end of the market are experiencing a general pinch, it is important to note that units in the prime areas are still relatively active. [ihc-hide-content ihc_mb_type=”show” ihc_mb_who=”1,2,3,4,5″ ihc_mb_template=”1″ ]
The capital’s Central Business District (CBD) is in a unique stage in its development where land plots are becoming increasingly rare. Basic economics dictates that when supply of something is limited, prices automatically rise and that is exactly what is happening to existing and new condos in prime locations.
This has encouraged numerous developers to brave the cooling market sentiment and launch projects. Here are some projects which have been launched at the start of 2016:
Ananda Development PCL, well known for its compact Ideo branded Condos, has been riding high, with successful launches such as Ashton Asoke and Ashton Chula-Silom. Part of its strategy to extend its luxury Ashton brand is “Ashton Silom” with its pre-sales having taken place on the 12-13th March this year.
This project boasts of being sited at the heart of “Bangkok’s Wall Street” (Silom) and is only 300m from BTS Chong Nonsi. To date, Ananda Development PCL has made a statement claiming 60% of the project’s value has been recorded in pre-sales. The project will have 428 units spread over 48 floors; with units ranging from 31- 86 sqm.
One of the newest developments to be launched in bustling Asoke is being spearheaded by Noble Developments PCL, the developer of the landmark Noble Ploenchit. The project, dubbed BE19, is marketed as a “Seamless Urban Sanctuary” and will sit on a 3.5 Rai plot of land, only a stone’s throw away from BTS Asoke (Sukhumvit Soi 19).
The project will offer 586 units and will comprise two towers. In terms of unit sizes, this will range between 33-146 sqm while the estimated price per sq meter will be 180,000 Baht per sqm.
Thong Lo Makeover
Thong Lo, Bangkok’s hip and trendy district is currently seeing an exciting development in its residential and even commercial/retail development. On a commercial/retail level, Thong Lo is seeing the growth of numerous developments notably “The Commons” and “Taste Thong Lo” community malls.
On a residential level, 2 developments are springing up located only a few hundred meters from the BTS:
1. Vtara 36
This new project by V Property Development Co., Ltd. follows its already completed H Sukhumvit 43. The development will be an 8-storey low-rise living experience with a total of 467 units for sale.
The project will offer 1 Bedroom (ranging from 28 – 46 sq m) and 2 Bedroom Options (ranging from 50 – 78 sq m). Its pre-sales marketing literature says that the development will offer a “mineral nature onsen” on top of the standard pool and gym.
2. Urbitia Thonglor
This development by EMC PCL is boasting a “Pocket Garden” conceptual design and will be located on Sukhumvit Soi 36 which is within walking distance of Thong Lo BTS. This condo will be a low-rise 8-storey development with 130 units. According to its marketing material, prices will range on average at 165,000 THB per sq m and units will comprise 1 Bedroom (28-35 sqm) and 2 Bedrooms (51-65 sqm).
Location is probably the most interesting selling point of this Condo as its proximity to the BTS and easy access to Rama 4 makes it interesting for potential residents and/or investors.
Bangkok – Natural positive momentum
These developments go to show that despite the sluggish market, some developers are braving the way and are still confident enough to risk millions if not billions of baht in condo development costs.
As in all property markets, investors considering Bangkok as an investment destination should personally invest time into research and due diligence. This is perfectly encapsulated in CBRE’s recent “Real Estate Outlook Report 2016” in which the analysts at the property consultancy stress “selective buying”. Property should always be viewed as a mid/long-term asset class and the Bangkok property market has numerous factors that could give it a natural positive momentum.
Bangkok has numerous positive fundamentals that could underpin a potential recovery, from scarcity in land plots in the CBD that is bound to put upward pressure on condo prices (new and existing) to the extension and development of public transport networks throughout Bangkok that will connect more areas of the city to Bangkok’s business centers (e.g. Asoke, Silom and Sathorn). On top of this, the government is deploying an array of economic restructuring plans in an attempt to rebuild Thailand’s economic competitiveness regionally.[/ihc-hide-content]
Pierre Leung is the Sales Manager of Fresh Property, a boutique property agency that specializes in Sales and Rental of Residential Property in the Sukhumvit Area of Bangkok. He can be contacted via www.freshbangkok.com or Pierre@freshbangkok.com