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Future looks good for premium condo market in Bangkok: survey

AS BANGKOK'S prime condominiums have a competitive advantage over their Asia-Pacific counterparts, the year ahead looks bright for the premium market, according to research by Knight Frank Chartered (Thailand).

The company's executive director and head of the residential department, Frank Khan, said there was also no sign of a bubble in the Bangkok property market emerging over the coming year.

The Bangkok condominium market has four segments. These are central business districts such as Ploenchit and Sathorn; Sukhumvit Sois 3 to 69 and Phra Khanong; Lat Phrao, Ratchada and Rama IX; and the peripheral area.

Khan said that in his view, there would be no condo-market bubbles on Ploenchit and Sathorn roads because there was little land available for the development of high-rise buildings, and what land exists is very expensive. These condominiums are always of premium quality and command high prices; there is always demand but limited supply.

Meanwhile, condominiums in Sukhumvit Sois 3 to 69 and the Phra Khanong area are also outstanding for investment, especially from Sois 3 to 55 and with one or two bedrooms. Investors can get rental yields of 5-6 per cent.

Condos in the fringe areas such as Lat Phrao, Ratchada and Rama IX have good potential because of their easy access to mass transport, such as the BTS Skytrain and MRT. The price of available land is not that high, so there will be a good new supply in the future, he said.

In the peripheral area, however, developers should be conscious about the grades of their condominiums because overall demand is not that healthy. Buyers of condos in this area are price-conscious, so developers tend to make the unit sizes smaller and the prices lower.

According to the company's research, Khan said, Bangkok premium condominiums can compete with their counterparts in places such as Hong Kong, Shanghai and Singapore. With comparable quality and specifications at a lower price, condos such as the Sukhothai Residences and St Regis Residences offer better value for money.

Developers of premium condominiums should continue to focus on high-end standards in their specifications, along with value-adding designs such as larger master bedrooms and more generous living and kitchen areas, he said. Premium condominiums are popular among foreign buyers, especially those from Hong Kong, London, Australia, France, India and Russia.

Given the competitiveness of |local offerings and the steady demand from foreign buyers, Knight Frank Thailand plans to expand |its international exhibition of premium Bangkok condominiums |to Kuala Lumpur and Shanghai. |The company previously received positive responses from Singaporean and Hong Kong buyers that Bangkok is an ideal market for investment.

Most foreign investors know Bangkok and Phuket very well, and they benefit from friendly tax schemes. This will help boost future interest from new buyers as well, the firm believes.

Khan forecast that 2014 would |be a bright year for the prime resale market. This is because there will |be few prime units launched into |the market in the future, as land prices in the CBD go significantly higher, to between Bt1.5 million |and Bt1.6 million per square wah (Bt375,000-Bt400,000 per square metre). However, the demand is |still there because Thais general-|ly covet condominiums in CBD areas, expressing a desire to ac-|quire assets that will be part of their legacy.


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