Top Bangkok Areas for Condominium Investment

Overview:

Finding a good location for Bangkok condominium investment is one essential factor to consider. Whether you purchase it as an investment or the second home will reflect the value of an investment over time. The right decision will finally obtain the worth capital gain and well receive %of gross rental yield. The top locations are mainly located in Bangkok’s CBD (Central Business District) and on Sukhumvit road. Because these areas are full of the numerous office buildings, shopping malls and well connected to public transports by BTS/MRT lines built in.

Source: CBRE and Bangkok Post Graphic

• Land: Based on the CBRE research, it stated average prices for land in the inner-city location in 2019 would cool down after soaring in the past three years. During 2015-2018, average prices of land in Bangkok increased by 12.5% per year, compared with 7%-8% in the earlier stages. In 2018, the highest record in price per square wah was at Lang Suan Road location (THB 3.1 million/ square wah.), which acquired in 2017.  However, CBRE expects the growth in average prices for land will not more than 5% in 2019.
• Condominium (Price): According to Nexus research, the new property prices in the central locations in Bangkok have risen continuously due to an insufficiency of land for development and high demand from both Thai and foreign investors. Over the past five years (2013 to 2018), the condominium prices on Sukhumvit Soi. 39 and the Thonglor area have surged by 40% from THB 183,000/sqm to THB 255,000/ sqm. Meanwhile, prices in the Rachada-Rama IX area and Ekamai increased by 34% and 30%, respectively. For the condominium prices near the city center such as Phaya Thai, the beginning of Phahon Yothin Road and Thon Buri have also raised by 13-26% in the past five years.
• Condominium (Rental Rate): The average rental rate of high-end condominiums in inner Bangkok and surrounding areas was THB 754/ sqm per month. The Sukhumvit Soi.39, Thonglor, Langsuan, and Sathon areas exhibited the highest return between THB 830 - 1,000/ sqm per month. For a one-bedroom unit, rent ranges from THB 43,000 – 52,000 per month and 65,000-82,000 for a two-bedroom unit. Most tenants in these areas are Japanese, European, and Americans who work in Bangkok’s CBD. For other areas, the rental rates were range between THB 526-800/ sqm per month. Or the rental price ranges from THB 19,700-33,000 per month for a one-bedroom unit and THB 33,500-54,600 per month for a two-bedroom unit. The Rachada–Rama 9 and Thonburi areas showed lower rental than other areas.
• Condominium (Return on Investment): Investing in condominiums not only gives investors an annual return from renting, but also generates capital gains from sales. Over the past five years, the return on investment for the overall luxury market has been relatively high, with the average return of investment at 50%. Thong Lor gave the highest total return on investment at 66% from rent and sales, followed by Ekamai (61%) and Rachada-Rama IX (58%).
  
  
  Source: Nexus and Bangkok Post Graphic (as of May 2018)
• Condominium (Trend): The overall condominium price is estimated to increase by 8-10% per year over the next three years, according to Nexus research. Condominium prices in the city center are forecasted to increase by 12-15%. For surrounding inner Bangkok areas, the annual yield will be higher in the short term. While investing in a condominium in inner Bangkok itself may provide higher capital gain from sales. Therefore, the total return on investment from condominiums both in inner Bangkok and surrounding areas will more or less be the same. The key factors that buyers should consider before investing condominiums are location, developer, proper management, and building maintenance.

Top Recommended Areas:

Source: Fresh Investment Report

1) Sukhumvit

• Early-Sukhumvit (Phloen Chit, Nana and Asoke): Early-Sukhumvit is the iconic central avenue in Bangkok starting from Phloen Chit Road and connects to business districts such as Asoke. Combined with the features of urban development, people can access to both BTS Sukhumvit Line and the MRT at the Asoke interchange station. The average rental rate for one-bedroom was approximately 5-6% or THB 700/ sqm depending on the condominium projects.
  
  
  Source: Bangkok Citismart (update as of Mar 2018)
• Middle Sukhumvit (Phrom Phong, Thonglor and Ekamai): These areas consider as the high-end and wealthy neighborhood in Bangkok; especially in Phrom Phong and Thonglor. The location strategically situated at the heart of Sukhumvit, which quick access to a commercial hub and sophisticated urban lifestyle. Moreover, the areas supported by extensive range facilities such as luxurious office buildings, five-star hotels and condominiums, international schools, top-rated hospitals, and Benchasiri Public Park. The area is also featured by The E.M district the global shopping destination, combining three mega shopping complexes, namely Emporium, EmQuartier, and EmSphere. These comfortably make the central Sukhumvit areas as an excellent strategic location for property investments due to ever high demand and promising yields with the average rental yield 5%-7% for the one-bedroom unit.
  
  
  Source: Bangkok Citismart (update as of Mar 2018)
  (Figure 1 : Phromphong - Thonglor / Soi. Sukhumvit 35-55 / Soi. Sukhumvit 24-36)
  (Figure 2 : Thonglor - Ekamai / Soi. Sukhumvit 55-63 / Soi. Sukhumvit 36-42)
• Outer Sukhumvit (Phrakanong-Onnut): The outer Sukhumvit covered by a large number of affordable condominiums and the residential neighborhood. Most renters are young working professionals and newly couple families which are mostly work in the Sukhumvit’s business center (Phrom Phong and Asoke). However, Phrakanong and Onnut has fewer the urban leisure lifestyles, and leisure hotspots comparing to the Early and Mid Sukhumvit. Popular leisure destinations are the W District (With its famous W Night Market), Summer Hill community mall, and Pickadaily Bangkok. The average rental rate for one-bedroom was around 5-6% or THB 550-650/ sqm depending on the condominium projects.
  
  
  Source: Bangkok Citismart (update as of Mar 2018)
  (Figure 1 : Phrakanong / Soi. Sukhumvit 63-71 / Soi. Sukhumvit 42-48 before Phrakanong canal)
  (Figure 2 : Onnut / Soi. Sukhumvit 77-81 / Soi. Sukhumvit 48-52 after Phrakanong canal)

2) Phayathai- Ratchathewi

The proximity of these areas is close to many professional education schools (Triam Udom Suksa), university (Chulalongkorn University) and shopping centers (Siam Square and Siam Paragon). The average rental rate was estimated to be 4%-6% or THB 600-700 / sqm. Since the areas have limited available space for development, so the amount of new condominium projects is relatively low. In 2020, the Ratchathewi station will be an interchange station between the current BTS light green line and orange line.

Source: Bangkok Citismart (update as of Mar 2018)

3) Ratchada, Rama 9 and Fortune

The Rama 9 – Ratchada areas are well known as Bangkok’s new CBD, which is the fastest growing business centers in Bangkok. Numerous grade A office buildings are located in the Rama 9 road such as The ASEAN’s tallest High-Rise building (open up in 2021), the Stock Exchange of Thailand head office, The Unilever, The AIA Capital. Many local and international businesses are gradually relocating their headquarters to this neighborhood. In term of resident lifestyle, the areas have a full choice offer such as the Central Rama 9, Esplanade and many eateries shops. On top of this, the future MRT orange line will cross-connect to the current MRT  blue line at Cultural Center station. This impact will enhance better public transport. The average rental rate was estimated to be 5%-6% or THB 700-900 / sqm depending on the condominium projects.

Source: Bangkok Citismart (update as of Mar 2018)

4) Silom-Sathorn

Silom-Sathorn areas have recognized as the Capital’s dominant business district. Various financial institutions (such as banks, insurance, and financial investment firms) and national/ international companies (such as CP building, KPMG, PWG) locate in these areas. Moreover, the areas offer a balanced mix of work and leisure, such as excellent eateries, local restaurants, Lumpini park, many schools, and shopping malls. Finally, the transportation is very convenient because people can access to both BTS and MRT (BTS Saladaeng and MRT Silom). Besides, Rama 4 Road connects to Sukhumvit Road, which can access to different commercial and leisure areas. The average rental yield was around 4%-5% or THB 700-800/ sqm. Over past five years, the rental yield has appreciated at the rate of 7% per annum. However, the available land for condominium development is limited, which put pressure on land prices to be more expensive. Therefore many new projects will be the Super Luxury condominiums (selling price more than THB 250,000/ sqm).

Source: Bangkok Citismart (update as of Mar 2018)

5) Jatujuk-Ladprao

These areas are residential and some business buildings such as SCB Bank, TMB Bank, Kasikorn Bank, The Sun Tower, and so on.  It is a popular pace amongst Thai working professionals. The areas well connected to public transport BTS/MRT in many stations such as BTS Mochit, MRT Chatuchak Park, MRT Phahon Yothin and MRT Ladprao. Moreover, people can enjoy many leisures and relaxation activities such as Central Plaza Ladprao and Major Cineplex Ratchayothin, the famous Chatuchak Weekend Market and Chatuchak Park. Currently, numerous developers have starting transformed the quiet residential hub into a “transport and commercial hub.” The average rental yield showed as 4%-5% or THB 400-500/ sqm.

Source: Bangkok Citismart (update as of Mar 2018)