Prices of super-prime and prime residential condominiums in Bangkok are continuing to rise, according to the latest research from real estate firm Knight Frank Thailand.
Although accounting for less than 5 percent of the total Bangkok condominium supply, these segments enjoyed relatively good sales due to their locations in the heart of Bangkok.
The selling prices of newly-launched projects in these categories increased sharply, due to the scarcity of land. Prices of super-prime units jumped from THB 310,450 per sqm at the end of 2014 to THB 338,930 per sqm during 2015, whereas the selling prices of prime condos increased from THB 237,988 per sqm in 2014 to THB 253,917 per sqm last year.
Frank Khan, Executive Director and Head of Residential for Knight Frank Thailand, said Bangkok’s super prime and prime condominium segment will continue to attract purchasers with prime locations becoming rare, reflected in the high prices.
He explained that super-prime and prime condominiums for buyers who purchase a unit as their second homes reflect their lifestyles and convenience of living. Super-prime and prime condominiums offer great locations with fine dining, schools and hospitals located nearby.
Some of the super-prime condominiums provide world-class branded residence services, which make life easier for High-Net-Worth Individuals, and also offer high-end facilities such as the right size of swimming pool and green areas.
Khan also added that demand of super-prime and prime condominium is mainly in the Sukhumvit area, near Thonglor BTS and Sukhumvit Sois 37-39, Rajdamri, Langsuan, and Wireless. He expects the new emerging area for super-prime and prime condominium will be the Bangkok riverside, such as Charoen Nakorn.
According to Knight Frank Thailand Research, in 2015 alone approximately 1,096 units were sold under these two categories. The accumulated sold rate of super-prime and prime condominiums was 69.3 percent and 86 percent, respectively. The super-prime accumulated sold rate at the end of 2015 – at 69.3 percent – was a slight increase from the first half of the year due to a small increase in supply (only 146 units were launched) with a total of 602 units available for sale at the end of 2015.
The Prime condominium market, on the other hand, slowed with the unit take-up within the period down to only 96 from the previous half year of 323 units. Despite that, the prime market still outperformed the overall Bangkok condominium market in this period, which exhibited greater effects of a market slowdown.
In terms of supply, as of the end of 2015 there were 1,960 super prime units from a total of 10 projects. The Residences at Mandarin Oriental Bangkok, located on the Riverside, was the only super-prime project launched within the period with 146 units, increasing the market supply share for the Riverside area, currently at 25 percent of the total super prime stock, from 18 percent during the first half of the year. Largely, the accumulated super-prime supply is now almost evenly distributed within the choice Bangkok neighbourhoods of Sukhumvit, Sathorn, Central Lumpini and the Riverside.
As for the prime market, Beatniq on Sukhumvit Road was the only prime project launched within the same period, adding 197 units to the Bangkok prime condominium market which currently stands at 2,548 units.
The average selling price per sqm of both super-prime and prime markets continued to climb.
At the end of 2015, the per square metre prices were THB 338,930 and THB 253,917 for super-prime and prime condominiums, respectively. A more significant rise in price was observed in the super-prime market with prices up by 9.17 percent year-on-year, whereas the prime market saw prices rise by 6.69 percent year-on-year.
What’s more, newly launched super-prime and prime projects are now starting to offer furniture packages which helped differentiate different unit types. Some designated units within the same building, which were sold at a premium of THB 25,000 to THB 85,000 of the per sqm selling price, received better flooring materials, built-in home automation, and better kitchen and sanitary equipment on top of what is being offered with the average units in the project.
Some developers utilised this strategy to justify selling prices of up to THB 430,000 per sqm.
Anchalee Kasemsukthawat, Director of the Residential Department at Knight Frank Thailand, said that prospective clients looking to buy super-prime condominium units yearn for privilege and exceptional 24-hour world-class services on a par with 5-star hotels in addition to prime location, convenience and privacy.
Thais account for approximately 65 percent of super-prime condominium buyers, purchasing a super-prime unit as their lifestyle product and as their second home that serves their exclusive lifestyle.
Meanwhile those who look for prime condos are meant to gain capital yields therefore they would rather go for prime condominiums that match expatriates’ lifestyle. Location and convenience are key factors among foreign tenants looking to rent a prime condominium.
Knight Frank Thailand added that the super-prime and prime market is far from being over-supplied.
These two markets will see a lower number of supply it said, but prices will still climb slowly.
Many high-end developers are starting to put much more effort into product differentiation through material selection, all the way to more cutting edge designs and integration of extra facilities.