Head of research Dan Tantisunthorn said the Sukhumvit area continued to be the most popular location among both tenants and developers of apartments.

He said the central Bangkok apartment market had performed well despite an increasing number of condominiums for rent. This is mainly because demand for apartments remains healthy, while new supply is limited.

Jones Lang LaSalle monitors the central Bangkok apartment market, which targets expats. Its latest study shows there are currently more than 11,100 apartments in the city centre, and these units are leasing well, with an average occupancy rate of more than 90 per cent.

Strong demand is driven by a steady growth in the number of expats in Bangkok. The Labour Ministry said more than 21,000 new work permits for resident expats were issued in Bangkok last year, compared with an annual average of 17,800 permits over the past five years.

Dan said the apartment supply in central Bangkok had grown relatively slowly, with fewer than 200 new units added to the market each year from 2002-06. There are a number of reasons for this.

To be successful, an apartment project needs to occupy a truly prime location, with good access and proximity to shopping malls, restaurants and schools. However, potential development sites in such locations are not only limited, but also in most cases too expensive to generate an attractive return on apartment development, he said.

Furthermore, most developers have focused on condominiums, which generally provide quicker returns. Apartment development, on the other hand, requires a long-term commitment.

There will be more apartments built in central Bangkok this year and next, but the number will still be limited to about 300-350 units annually.

Demand from expats continues to focus on the Sukhumvit Road area, which offers a variety of amenities and services, such as retail complexes and restaurants.

As a result, most new apartment projects are also concentrated in this area. In the first half of this year, seven apartment projects will be completed in central Bangkok, all of them near Sukhumvit Road.

Design and the quality of finishings and furnishings are two other major factors that influence tenants' choices.

Daonum Verapong, head of Jones Lang LaSalle's residential agency, said expats preferred apartments that were bright and airy, with a modern design and tasteful decor.

While studios and one- or two-bedroom units are leasing relatively better than larger

units of more than 100 square metres, there is also demand for three-bedroom units and penthouses with a well-designed lay-out and premium-quality furnishings.

Facilities within the building are also becoming an increasingly important selling point. Tenants are looking for not only swimming pools, but also other amenities, such as fitness rooms, spacious open common areas and well-designed landscaping and gardens.