One area of Bangkok is generating occupancy rates of 88 percent, prices of around THB 100,000 baht per sqm and, for investors, average returns of between 5 percent and 7 percent. Any guesses where?
According to real estate agency Plus Property, it is Phra Khanong and the early parts of On Nut, which is providing these results, and at the same time is also seeing increasing numbers of foreigners moving into the area. It says the Thai:Foreign ratio is now as high as 70:30 as the Bangkok residential property market continues to move away from the dense and expensive zones of Phrom Phong and Thong Lor.
Businesses – including trade and hospitality operations – are also expanding in the same direction, has been reported.
Poomipak Julmanichoti, Managing Director of Plus Property, said the middle portions of Bangkok’s Sukhumvit Road has enjoyed significant growth over the past two- and three-years – including areas like Phra Khanong and the early parts of On Nut.
As of August 1, 2015, data gathered by Plus Property’s 2,600 units in the area showed what it described as an exceptionally high occupancy rate of 88 percent, which compares very favourably to other areas elsewhere in Bangkok.
Once inhabited almost solely by Thai residents, foreigners are moving into the area in greater numbers every year, yet unlike Phrom Phong and Thong Lo these foreigners are not primarily Japanese.
Plus Property revealed that 47 percent of Phra Khanong and early On Nut residents are Asians, followed by Europeans at 35 percent and Americans at 14 percent. It did however note that each project still houses Japanese residents – occupying 30 units on average per development – and this it said is a statistic that signifies the outward expansion of the Japanese community in Bangkok.
“Regardless, the early portions of Sukhumvit remain the most popular hotspot for condominium developments in Bangkok,” said Poomipak.
“These areas have long been the home of Bangkok’s longstanding noble families, making them famous and highly developed.
“Sukhumvit is connected to Thailand’s top shopping districts, and this has led many to compare it to New York City’s Fifth Avenue, London’s Oxford Street or Singapore’s Orchard Road.
“In addition to shopping, Sukhumvit also boasts an extensive range of corporate offices, schools, and hospitals frequented by foreigners.
“The presence of a large Japanese community in the area contributes to its growth even further, pushing investors to buy condominium units here and lease them out to Japanese tenants.
“More than half of Sukhumvit condominium residents are on a lease, and more than half of these tenants are Japanese however, the area’s growing density has pushed buyers and potential tenants outward into other areas, and the inner-city portions of Sukhumvit – such as Ploenchit and Chidlom – all the way up to the intersection of Wireless and Ratchadamri roads – but they face opposition in the form of even higher prices.”
The sell-out in one day early last month of The Line Sukhumvit 71 – a joint-venture development by Sansiri and BTS – underlined the unprecedented phenomenon for condominium projects in this area, and is an indicator if one was needed of rising demand.
With a constant stream of new developments over the past two- and three-years, and high occupancy rates, the Phra Khanong and On Nut zone is likely to become even more popular in the near future, according to the real estate firm.
