Massive urban projects such as the Mass Rapid Transit Links are the ambitious evidence that Bangkok is actively investing into positioning itself as a leading Southeast Asian business hub.
Photography by Jan Yong
From the light-hearted Rio 2016 festivities, to the more tragic and senseless Thailand bombings, news has been flowing in thick and fast in the past two months. However a milestone which has for the most part been buried and gone unnoticed, is the recent launch of Bangkok’s “MRT Purple Line” which connects Greater Bangkok’s Nonthaburi Province to more central locations in the City. As a result, the Line has facilitated travel, connecting Nonthaburi’s Bang Bua Thong district to Tao Poon station in Bangkok’s Bang Sue district.
While this is a sizeable infrastructural development success, unfortunately public/local response to this launch has been largely underwhelming. A recent statement by the government has explained that at present the route is failing to meet its target of 60,000-70,000 commuters a day. This has resulted in the government urging the Mass Rapid Transit Authority of Thailand (MRTA) to slash fares and expedite the connection of the “Purple Line” with the “Blue Line” (at present, the two Lines are connected via shuttle bus service).
This cool response is also being mirrored by the housing and condo developments along these newly opened lines, where unsold new project units are still high. The trillion baht infrastructure programme approved by the Government in 2015 was a major boon for local developers, with major public listed companies such as Supalai and AP Thailand joining the fray. Developers and investors anticipated that the combination of low land prices and better access to central Bangkok may result in a property boom for the areas benefitting from these MRT extensions.
However, this enthusiasm seems to be premature causing a glut and forcing many developers to temporarily freeze project launches. Recent statistics by the Real Estate Information Centre (REIC) revealed that the top district with unsold units was Nonthaburi. This slowdown is not only being experienced by areas along the “Purple Line” but also the upcoming “Green Line” which will link Samut Prakarn (another Province constituting Greater Bangkok). This district, according to the REIC, constitutes the second district with the most unsold units.
OVERSUPPLY CONCERNS?
Is this slow-down a cause for concern? While the future is always uncertain, it is always important to attempt to analyze the information at hand. This evaluation can only be conducted by looking at Bangkok’s current urban landscape and current Public Transport Links.
Considering Bangkok has an estimated population of over 8 million inhabitants, it is interesting to note that its transport system is relatively under-developed compared to some of its global counterparts (e.g. Singapore, Hong Kong, Shanghai). Anyone familiar with Bangkok will be accustomed to its BTS and MRT systems. These two networks have been in many cases the major driver of Bangkok property market’s growth. This boom has led to prime areas such as Phrom Phong, Chidlom and Wireless achieving record residential prices of over 200,000 THB per/ sqm for condominium units. This has also led to the gentrification of areas such as On Nut and Phra Khanong which thanks to the BTS have been transformed into residential commuter hubs.
Interestingly, Bangkok’s economy is extremely diverse and fuelled by a diverse workforce of both local and expat working professionals. While numerous expats choose to live in the CBD for reasons of convenience (proximity to amenities such as shops and restaurants), locals prefer to reside in more affordable areas with a more residential environment. However, by just glancing at the “BTS & MRT Map” it is surprising that numerous Bangkok neighbourhoods are underserved by these networks.
Let’s look at the Government’s massive infrastructure programme for Bangkok’s public transport system of upcoming connections (refer to the map on the left).
‘TRAIN EFFECT’
A simple glance at the “pipeline” of upcoming Mass Transit Routes immediately highlights the potential opportunities for speculators, investors and developers. The planned routes are extensive and ambitious connecting areas north, south, east and west to Bangkok’s central business district. This infrastructure boom is gradually having a trickledown effect, positively affecting neighbourhoods which were once viewed as backwater or secondtier residential areas. However with the development of new transit lines, this could potentially fuel a boom in Bangkok’s local economy as local residents can now travel to work or to places of leisure more conveniently and rapidly.
Residential property has always been a medium to long term asset class, where investors are advised to “sit and hold”. Bangkok is a city in a unique stage of its urban development where such a strategy could pay off massively. While Thailand and regional economies are currently suffering from slowing and shaky global slowdown, the macro-economic fundamentals of Bangkok are positive!
Thailand is incredibly resilient and massive urban projects such as these Mass Rapid Transit Links are the ambitious evidence that Bangkok is actively investing into positioning itself as a leading Southeast Asian business hub. Regional and national projects such as these are a clear message to the local and international business community that the country is prepared to invest in its medium to long term future.
