19 minute read
Metro Bangkok Market Overview
PA H OL Y O THI N / PH A Y A TH A I
Rd . Paholyothin
Advertisement
. d R a d a h c t a R L ad P hrao R d .
RAMA 9 / R A TCH AD A / LA T PHR A O
PE TCH A BU R I / PA THUM WA N CENTR A L P et c h ab u r i R d . Sil o m R d . S a t h o r n R d . W i r el e s s R d . R ajada mr i R d . S I L O M / S A T H O R N K r un Thonburi Rd . C H A O P H R A Y A R I V E R Ra m a III Rd . RAMA III SILOM LINE EXTENSION RAMA III L UM P IN I R I V E R F R O N T R I V E R F R O N T R I V E R F R O N T R I V E R F R O N T S R a m a I V R d . S u k h u m v i t R d . UKHUMVI T S o i S u k h u m v i t 5 5 S o i S u k h u m v i t 6 3 S o i S u k h u m v i t 7 7
O n Nut Rd .
S UKHUMVIT LIN E E XTEN S IO N
Bangkok in Focus
Summary
In the past 12 months, 2013, Bangkok saw the continued expansion of its condominium housing stock. While activity in prime districts remained buoyant, the majority of the development activity was in midtown areas, comprising mostly entry-level homes. This increase in the development of smaller units resulted in an 8% dip in the average selling price to 4.46 million baht, from 4.86 million baht over the previous year.
New launches
The number of new units launched by listed developers across the metropolitan area in the July 2012 to June 2013 period fell 23% year on year to 12,898. Distributed across 32 projects, the total comprised 6,995 units launched in the second half of 2012 and 5,903 in the first half of 2013. In the previous 12 months, 16,745 units were launched across 35 projects.
The majority, 67%, of the new projects were located in the midtown area, in secondary locations such as On Nut-Bearing, Wong Wian Yai-Thapra and Ratchada-Huay Kwang. The remaining 33% were situated in the downtown area, which encompasses Sukhumvit Road sois 1-71, Silom Road, Sathorn Road and Central Lumpini.
New Launches by Area
Sukhumvit 14% Silom / Sathorn 11% Central Lumpini 4% Rama III / Narathiwat 5% Riverfront 2%
14% 14%
Petchaburi / Pathumwan 4% Paholyothin / Phaya Thai 8% Rama 9 / Ratchada / Lat Phrao 17% Silom Line Extension 21% Sukhumvit Line Extension 14%
Sukhumvit Silom / Sathorn Central Lumpini
21%
17% 11%
4%
8% 5%
2% 4%
Source : Raimon Land research
New Launches, H2/2012 - H1/2013 No. Project Developer Number of Units Launch Date Sukhumvit
1 Galrerie Rue De 39 AP 88 Q1/13 2 Edge Sukhumvit 23 Sansiri 443 Q1/13 3 HQ Sansiri 197 Q3/12 4 The Crest Sukhumvit 34 SC Asset 268 Q3/12 5 The XXXIX Sansiri 178 Q4/12 6 Circle Sukhumvit 11 Fragrant 219 Q4/12 7 Art at Thonglor A.K. Property 102 Q4/12 8 The Lofts Ekamai Raimon Land 263 Q2/13 9 Focus Pleonchit Focus 132 Q1/13 10 Q Asoke Quality House 493 Q1/13
10 projects, 2,383 units Take-up rate : 69.1% Silom / Sathorn
1 Centric Sathorn 11 SC Asset 368 Q3/12 2 Supalai Elite Sathorn - Suanplu Supalai 180 Q4/12 3 Nara 9 Eastern Star 361 Q4/12 4 Klass Silom Pipat Assets 176 Q4/12 5 Crest Sathorn 11 SC Asset 364 Q3/12
5 projects, 1,449 units Take-up rate : 90.1% Central Lumpini
1 Klass Langsuan Langsaun Assets 110 Q2/13 2 Magnolias Ratchadamri Boulevard Magnolias 316 Q3/12
2 projects, 426 units Take-up rate : 70.0% Rama III / Narathiwat
1 Supalai Lite Sathorn-Charoenrat Supalai 563 Q4/12 2 Bridge Sathorn-Narathiwas Prinsiri 91 Q1/13
2 projects, 654 units Take-up rate : 96.5% Riverfront
1 Menam Residences Menam Residences 294 Q4/12
1 project, 294 units Take-up rate : 85.0% Paholyothin / Phaya Thai
1 Noble Revolve Aree Soi 1 Noble 483 Q3/12 2 Centric Aree SC Asset 516 Q2/13
2 projects, 999 units Take-up rate : 61.8% Rama 9 / Ratchada / Lat Phrao
1 Noble Revolve Ratchada Noble 802 Q1/13 2 Centric Ratchada Huaykwang SC Asset 600 Q2/13 3 Quinn condo MBK 729 Q4/12
3 projects, 2,131 units Take-up rate : 67.6% Silom Line Extension (Thapra / Taksin / Thonburi)
1 The Key Sathorn Ratchapreuk Land & House 834 Q4/12 2 Nye by Sansiri Sansiri 636 Q1/13 3 Fuse Chan-Sathorn Preuksa 1,225 Q1/13
3 projects, 2,695 units Take-up rate : 72.8% Sukhumvit Line Extension (On Nut / Udomsuk)
1 A Space Me Sukhumvit 77 AP 277 Q4/12 2 D Condo Sukhumvit 109 Sansiri 375 Q4/12 3 The Base Park West Sukhumvit 77 Sansiri 711 Q4/12 4 The Base Park East Sukhumvit 77 Sansiri 504 Q1/13
4 projects, 1,867 units Take-up rate : 74.9% Total : 32 projects, 12,898 units Take-up rate : 74.0% Source : Raimon Land research
Average Selling Price by Area, THB/sq m
159,628
Sukhumvit 100,000
Silom / Sathorn 180,151
Central Lumpini 84,013
Rama III / Narathiwat 141,304
Riverfront 117,975
Phaholyothin / Phaya Thai 131,112
Rama 9 / Ratchada / 85,129
Silom Line Extension 66,053
Sukhumvit Line Extension
Prime areas
Prime Sukhumvit accounted for 18.5% of the new units launched in the period, with the bulk of those being at the high end of the market, with price tags of 150,000 baht-plus per square metre. Within the prime Sukhumvit area a few units, including those at The XXXIX and Galerie Rue De 39, were in the super-luxury class, costing upwards of 200,000 baht/sq m. Overall, one-bedroom units measuring 35-45 sq m remained the most popular configuration, though some projects did also offer a few two- and three-bedroom options. The unsold inventory of family size units at established developments, such as Saladaeng Residences, The River, Millennium Residences, also fell sharply in the period, as a result of the lower new supply of units. Bangkok’s central business district (CBD), which includes Central Lumpini and Silom and Sathorn roads, accounted for 14.5% of the new launches in the 12-month period. A total of 4,258 units were launched in prime areas over the past 12 months. The sector is driven by higher net worth investors buying for either personal use or buy-to-let investment purposes.
Midtown areas
The Silom BTS line extension (from Krung Thonburi to Thapra) was the most active of the midtown locations in the period, with 2,695 units launched there. Most of the condos were studios (25-28 sq m) and one-bedroom units (30-35 sq m) priced between 2 million and 5 million baht. Lat Phrao
Source : Raimon Land research
The projects targeted first-time buyers in the middle income segment, with several developers offering low downpayment options and fully furnished units to help reduce
cash requirements from home buyers. The Sukhumvit BTS line extension, from On Nut to Bearing, remained a popular choice for developers, with 1,867 units launched in the period.
The easy availability of mortgages for first-time buyers has been a key factor in driving the development of these midtown areas.
After a spike in new launches in previous years in the Rama 9 / Ratchada and Paholyothin / Phaya Thai districts, land in these areas is now too expensive to justify the development of entry-level projects. Most units here are now priced well above 120,000 baht/sq m. However, growth in the Rama 9 / Ratchada / Lat Phrao areas will continue as they are home to many office buildings, including the new
Thailand Stock Exchange building. The Rama 3 / Narathiwat area of the city accounted for 5% of the new condominiums launched in past 12 months. The developments featured mostly one-bedroom units, measuring about 33 sq m. and aimed at middle-income earners. The average unit price was 3.47 million baht, with a cost per square metre less than 100,000 baht.
The average price of all units launched in the midtown area in the 12 months through June 2013 was 96,423 baht/sq m.
New Launches by Area : Pricing and Take-up Rates
Value (Million THB) Number of New Projects Launched
Units Launched
Value (M THB) / Unit Take-up Rate
Average Price of New Launches THB / Sq m
Sukhumvit 20,666 10 2,383 8.67 69% 159,628 Silom / Sathorn 7,720 5 1,449 5.33 90% 100,000 Central Lumpini 4,260 2 426 10 70% 180,151 Rama III / Narathiwat 2,267 2 654 3.47 97% 84,013 Riverfront 3,036 1 294 10.33 85% 141,304 Paholyothin / Phaya Thai 4,211 2 999 4.22 62% 117,975 Rama 9 / Ratchada / Lat Phrao 5,933 3 2,131 2.68 68% 131,112 Silom Line Extension 8,353 3 2,695 3.10 73% 85,129 Sukhumvit Line Extension 3,485 4 1,867 1.87 75% 66,052
Pricing
The mean selling price of all condominium units launched in the first six months of 2013 was 4.46 million baht, down from 4.86 million baht in the second half of the previous year. Despite the dip in absolute value, the selling price per square metre in the first half of 2013 rose 21% from the previous six months to 124,230 baht.
This contradiction was due to a number of factors including the expansion into new, lower cost development areas and a reduction in the average unit size. Although, there was an increase in the number of luxury and super-luxury projects launched in the first half of 2013. Super-luxury projects, costing more than 200,000 baht/sq m accounted for 4.5% of the total launches in the period, while luxury units, priced between 140,000 and 200,000 baht/sq m accounted for 21.6%.
Following the trend for efficiently designed homes, while also satisfying buyers’ desire to have more than one room, many developers introduced ranges of compact one-bedroom units measuring about 25 sq m – the traditional size of a studio. These were particularly popular in areas along the BTS extensions and also in the Rama 9, Ratchada and Lat Phrao areas.
Across the board one-bedroom units remained the most popular choice among buyers, though many luxury and super luxury projects, including The XXXIX and Klass Langsuan, performed exceptionally well, selling out all unit types including three-bedroom and penthouse units.
Sales performance
Of the 12,898 units launched in the 12 months through June 2013, 9,545 were sold, representing a take-up rate of 74%. This was an improvement on the previous 12
Source : Raimon Land research
months when the rate was 61.1%. With an average absorption rate over the past year of 795 units per month, the 3,353 currently unsold units could theoretically be cleared in four to five months.
According to Raimon Land research, the Sukhumvit area gained 2,383 new units in the year through June 30, 2013, an increase of almost 58.4% from the 1,504 units launched in the previous 12 months. Similarly, the take-up rate in the area was also better than in the previous year, rising to 69.1% from 53.8%.
Sukhumvit remains a very popular location for buyers looking for high-quality units, especially as the development of condominium units has been matched by a wide range of commercial projects, from hotels and offices to shopping and entertainment facilities.
Within the wider area, lower Sukhumvit – from soi 1 to the Emporium – is more popular with foreign buyers, while locals tend to favour Thonglor and Ekkamai. Demand for property in the Sukhumvit area is set to grow even further, while rising land prices will also lead to the development of more luxury projects, including the Marque and The Lofts Ekkamai, the latter of which is now selling for 160,000 baht / sq m.
In the Silom / Sathorn area, the new supply in the past 12 months comprised five projects and 1,449 units, compared with 526 units launched in the previous year. The take-up
rate in the period was 90.1%, up from 77.8% a year earlier. As the centre of the CBD district and with excellent transport links, demand for properties in this area is set to remain strong, though as with Sukhumvit, rising land prices mean that there will likely be an increase in luxury-type projects.
Take-up Rate of New Launches by Area, H2/2012 - H1/2013
69% 90%
70% 97%
85%
62% 68% 73% 75%
Sukhumvit
Silom / Sathorn Central Lumpini
Rama III Riverfront Phaholyothin Ratchada Silom Line Sukhumvit Line / Narathiwat / Phaya Thai / Rama 9 Extension Extension / Lat Phrao
Source : Raimon Land research
In Central Lumpini two projects comprising 426 units were launched in the 12 months through June, with a take-up rate of 70%. Freehold units are rare in this area so demand for them is particularly high. One of the only freehold projects to be launched in the area – Klass Langsuan which was priced at 200,000 baht / sq m – quickly sold out. The rarity of freehold land in the Central Lumpini area has made it the most expensive of the CBD areas, with an average unit price of 10 million baht. In the riverfront areas of Chareon Nakhon and Chareon Krung roads the average unit price of new properties is 10.3 million baht. The area’s good transport links and attractive surroundings have made it a popular choice for luxury condominium projects. However just one project comprising 294 units was launched in the past 12 months along Chareon Krung, which achieved a take-up rate of 85%. In contrast, properties in the riverfront area along Rama 3 are priced from 150,000 baht/sq m. That said, the outlook for the area remains promising with several condominium and mixed-use projects slated for development over the coming years ahead of the opening of the AEC. In that period, we expect to see an increase in demand and rising land prices.
New Launches in Metro Bangkok by Class % of Total Launches 64%
Most of the condos launched in Bangkok’s new development areas target middle-income buyers. The average unit prices are: 1.87 million baht along the Sukhumvit BTS line extension; 2.78 million baht in the Rama 9 / Ratchada / Lat Phrao area; 3.10 million baht along the Silom BTS line extension; 3.47 million baht in the Rama 3 / Narathiwat area; and 4.22
million baht in the Paholyothin / Phaya Thai districts. New projects situated close to the new MRT and BTS extensions were particularly well received, with take-up rates of between 61.8% and 96.5%.
Performance by price segment
Of the 12,898 units launched over the past 12 months, 40.5% were priced below 100,000 baht / sq m, for which the take-up rate was 72%. Demand for these entry-level units is expected to continue to grow, though there are some concerns about debt and affordability.
In the slightly higher bracket, units priced between 100,000 and 140,000 baht/sq m represented 33.5% of the new launches and reported a take-up rate of 71%.
In the luxury sector, priced between 140,000 and 200,000 baht / sq m, the take-up rate was 84%, while super-luxury projects, which accounted for 4.5% of new condo launches in
Take-up Rate
the period, reported a take-up rate of 64%.
84%
4.51%
>200,000 THB/sq m 21.55%
140,000-200,000 THB/sq m 71%
33.48% 72%
40.46%
100,000-140,000 THB/sq m below 100,000 THB/sq m
Source : Raimon Land research
New Completions, H2/2012 - H1/2013
No. Project
Sukhumvit
1 Via 49 2 Ceil by Sansiri 3 Ashton Morph 38 (Building B) 4 The Address Sukhumvit 61 5 Ideo Morph 38 (Building A) 6 Via Botani 7 Keyne 8 Via Sukhumvit 31 9 Marvel Residence 10 Wyne 11 The Room Sukhumvit 21 12 The Crest Sukhumvit 24 13 The Crest Sukhumvit 49 14 Sari 15 Rhythm Sukhumvit 50
15 projects Silom / Sathorn
1 Baan Lux-Sathorn 2 The Address Sathorn
2 projects
Rama III / Narathiwat
1 The Trust Residence Ratchada
1 Project Riverfront
1 The River 2 Chapter One
2 projects Petchaburi / Pathumwan
1 The Pyne 2 The Address Asoke 3 Dcondo Ramkhamhaeng 4 Casa Condo Asoke Din Daeng
4 projects Paholyothin / Phaya Thai
1 ONYX Phaholyothin 2 Noble Re:D
2 projects Silom Line Extension
1 Fuse Sathorn-Taksin 2 Teal Sathorn-Taksin 3 Urbano Absolute
3 projects
Sukhumvit Line Extension
1 The Base Onnut
1 project Total : 30 projects, 14,059 units Developer Number of Units Launch Date Completion Date
Sansiri Sansiri Ananda Asian Property Ananda Sansiri Sansiri Sansiri Major Sansiri Land & House SC Asset SC Asset Sansiri AP
Lux-Sathorn Asian Property
85 Q3/10 Q1/13 374 Q1/11 Q1/13 199 Q3/09 Q1/13 99 Q4/11 Q1/13 162 Q3/09 Q4/12 137 Q4/10 Q4/12 216 Q1/10 Q4/12 88 N.A. Q4/12 9 Q3/11 Q3/12 460 Q3/10 Q3/12 213 Q3/11 Q2/13 82 Q4/11 Q2/13 88 Q4/11 Q2/13 192 Q1/12 Q2/13 589 Q3/10 Q2/13
2,993 units Take-up rate : 87.76%
18 562
580 units
Q4/11 Q1/13 Q3/09 Q3/12
Take-up rate : 99.32%
Quality House 1676 Q1/11 Q2/13
1,676 unit Take-up rate : 71.00%
Raimon Land 838 Prinsiri 1,875
892 units
Sansiri 298 AP 574 Sansiri 1,120 Quality House 607
2,599 units
Q1/07 Q4/12 Q1/10 Q2/13
Take-up rate : 92.07%
Q1/10 Q1/13 N.A. Q4/12 Q4/10 Q2/13 Q1/11 Q2/13
Take-up rate : 92.06%
Sansiri Noble 620 272
2,713 units
Q4/10 Q2/13 Q1/10 Q2/13
Take-up rate : 83.62%
Prinsiri 377 Q4/10 Q4/12 Sansiri 409 Q4/10 Q4/12 Prinsiri 593 N.A. Q2/13
1,379 units Take-up rate : 100%
Sansiri 1,227 N.A. Q4/12
1,227 units Take-up rate : 100% Average Take-up rate : 88.72% Source : Raimon Land research
New completions
A total of 31 projects comprising 14,059 units were completed over the past 12 months, most of which were in midtown areas. Most of the new completions were one-bedroom units.
Just 17 projects and 3,573 units were completed in the prime areas of Sukhumvit, Silom and Sathorn. The rest were located in midtown districts, of which the Riverfront area was the most popular, followed by sites in Petchaburi / Pathumwan.
Over the next two to three years, we expect 11,407 units to be completed in downtown areas and 24,312 units in midtown districts. Based on the number of launches, the number of units to be completed in Rama 9 / Ratchada / Lat Phrao before 2017 is likely to be 7,712, while the total along the Sukhumvit BTS extension will be 5,245.
New Completions by Unit Type
Studio 3% 1 BR 77% 2 BR 16% 3 BR 3% Penthouse 1%
16%
3% 1% 3%
77%
Source : Raimon Land research
88% 99% 97%
84% 92% 92% 100% 100%
Sukhumvit
Silom / Sathorn
Rama III / Narathiwat Riverfront
Resale and rental performance
Based on our own research, the gross rental yields achievable on condos in the Sukhumvit area range from 4% to 7%. These strong returns are attractive for investors buying units as long-term investments and also for those seeking to resell to prospective landlords.
Many developers now provide a full service for buyers interested in this type of purchase.
The outlook for 2014 and beyond
The outlook for the Bangkok condominium market for 2014 and beyond remains positive; however, ever-evolving macroeconomic conditions and city-wide real estate market dynamics will likely pose new challenges to industry players in the coming months and years.
Petchaburi / Pathumwan Paholyothin / Phaya Thai Silom Line Extension Sukhumvit Line Extension
Source : Raimon Land research
The Thai economy remains heavily dependent on the export sector, and thus the general economy (and by extension, the property sector) remains considerably vulnerable to an extended global economic slowdown. A negative perception of the global situation, and/or of the domestic management of the Thai economy, may result in a reduction of new condominium launches in the city.
The next 18 months will be a telling period for the condominium market. The remainder of 2013, and through 2014, is scheduled to be a peak period for new unit completions. The continued health of the market will increasingly depend on the banks' willingness to provide the mortgage funding underlying a record number of transfers. The banks, which have maintained strong capital reserves, still remember the
Resale and Rental Performance for New Completions
Via 49
Project Unit Type Unit Size Resale Rental Gross Price-to-Rent (sq m) Total Price Baht / sq m Monthly Baht / sq m Rental Yield Ratio
1-BR 35 5,500,000 157,143 30,000 857 7% 13.86
Ideo Morph 38 (Building A) 1-BR 34 5,300,000 155,882 30,000 882 7% 14.42
Wyne
The River
The River
1-BR 62 9,100,000 146,774 35,000 565 7% 15.24
2-BR 132 21,000,000 159,091 75,000 568 6% 18.11
3-BR 230 45,000,000 195,652 120,000 522 4% 27.08
Source : Raimon Land research
overheated property market associated with the 1997 crisis, and have taken preventative measures to ensure they are not overextended, including raising take-up rate requirements and generally tightening lending for developers (especially smaller or less reputable players), and on the retail side, raising downpayment requirements for borrowers. These measures are ultimately intended not to stifle the condominium market but rather to protect it from excessive volatility, and we expect the banks to generally continue their support for industry growth.
We expect the high-end of the condo market to gain momentum over this period. Record land prices, and the limited availability of prime plots in Bangkok, will push developers, if they are active at all, toward higher-end projects. This is supported from the demand side as well, with high interest from regional customers (e.g. from Hong Kong or Singapore) seeking a luxury unit but facing record prices and/or the buying restrictions that regional "cooling measures" have introduced. Bangkok offers luxury units – even at record prices for the local market – which are much cheaper on a per-square-metre basis than its regional neighbours and is perceived as a growth market with the oncoming AEC in 2015 set to liberalise trade and investment flows through the city. In recent months we have already seen stronger activity in the luxury market, with investors snapping up large size units and unsold inventory reducing significantly.
Finally, we believe the market has overlooked the familyoriented, mid-size unit size in recent years, and expect to see some movement to serve this segment, as a younger population grows older and begins to consider raising a family. Subject to developers' ability to secure prime plots at manageable land prices, we expect to see some activity directed at this segment as well as, or in combination with, the trend toward supplying the higher-end of the market.
Metro Bangkok Outlook : Future Condominium Units by Year of Completion, No. of Units
15,210
2013F* 13,976
2014F* 4,436
2015F* 2,097
2016F*
