Demand from the expatriate market remains strong for apartment rentals in downtown Bangkok, driven by both a limited supply in the number of apartment units and preference for apartments over condominiums, according to a leading property consultant CBRE.
At present, there are approximately 12,000 apartment units located in downtown Bangkok, with less than 500 units in the construction pipeline. The apartment supply is limited with less competition for rental compared to approximately 90,000 condominium units available, of which 30% to 40% of the units are available for rent, although the proportion varies depending on individual buildings and location.
The key difference between condominiums and apartments is the ownership whereby residential buildings with a single owner are referred to as apartments, while buildings with multi-owners are referred to as condominiums. Some tenants prefer single ownership buildings as the building manager will be the single point of contact for all issues including maintenance and problems within the unit, whereas in a condominium building, the property manager is responsible for the management of the common areas only. Tenants have to address maintenance issues within the units themselves.
An evidence of the growing popularity of apartment buildings is the recent success of Promphan 53, a new apartment located in Sukhumvit Soi 53. Comprising one to four bedroom units, with the majority being two-bedroom units, Promphan 53 was completed at the beginning of October and is now 50% occupied.
The building appeals to both Japanese and European expatriate tenants. The key success factor is underpinned by its location in Sukhumvit 53 which is less busy than other sois, yet conveniently located close to the Thonglor BTS station, accessible by a Tuk Tuk shuttle service provided the development. The exclusivity of the development with only 36 units, high ceilings of 2.8 metres and a high standard of decoration, furnishings and appliances has also been critical to the project’s success.
“Aside from the location, unit type, size, decoration style, furnishings and appliances and common facilities are also critical to the rental performance of an apartment development,” said Theerathorn Prapunpong, Director of Residential Leasing Services at CBRE Thailand, who provides consultancy services to developers to ensure that their developments matches the requirements of the expatriate tenant market.
Although there are a limited number of new apartment developments in the pipeline, an additional 20,000 condominium units is due to be completed over the next three years in downtown Bangkok, adding to the competition in the rental market. It is important for apartment developers to differentiate themselves from new condominium developments, both in terms of unit type and size, as well as the additional add on services offered.
