Opportunities in downtown Bangkok residential rental market

Property & Real Estate

Opportunities in downtown Bangkok residential rental market

The downtown residential rental market in Bangkok is driven by expatriate tenants working in

Thailand who want to rent in a limited number of areas and mainly choose either apartments, rental units in a condominium or a serviced apartment, according to CBRE Research

The report states that expatriate numbers are only growing at a slow rate and there has been no increase for many years in the average monthly budgets that these tenants are willing to spend on rent. There are only a few new apartments under construction, but many new condominiums.

The increase in supply and limited growth in demand means that the market is competitive, but there are still opportunities for both apartment developers and buy-torent condominium investors. The key factor is to understand tenant requirements so that investors can maximise their occupancy and rent per square metre.

There is a constant turnover of expatriate tenants as the average length of stay in Thailand is about three years so each new incoming tenant makes a fresh decision about where they want to live

The latest survey by CBRE Research shows that there are about 10,000 single-ownership multi-family apartment units in the most popular expatriate rental locations of Sukhumvit, Lumpini and Sathorn. There are around 76,000 condominiums in the same areas and CBRE Research estimates that about 25,000 - 30,000 of these are owned by investors that are renting out their units.

There is still a preference, especially from Japanese tenants, for single-ownership apartments rather than multiownership condominiums because they like the ability to talk to the owners’ representative about all aspects of maintenance. In a condominium, the property manager is only responsible for maintenance of the common areas and it is the individual owners’ responsibility to maintain the interior of the unit. It is more challenging for tenants to get things fixed inside a condominium unit.

Theerathorn Prapunpong, CBRE Thailand

In Bangkok, few condominium owners use a managing agent to look after their unit and deal with all tenant issues. A condominium tenant must directly contact the owner about all issues relating to the inside of the unit and the ability of an individual owner to quickly arrange maintenance or repairs is mixed depending on their experience and is especially challenging for overseas owners.

In some cases where the condominium managed by hotel and provides concierge services, the owner will have to pay the premium common area management fee and the property management will assist with maintenance issue in the unit.

26 The Link Issue 4/2018