Bangkok’s property market, is constantly a whirlwind of big headlines; from record shattering land deals, launches of exclusive super luxury residences, to announcements of multi-billion baht mega projects. This bewildering cacophony of buzz, inevitably awakens a confusing array of emotions from excitement, thrill to general confusion!
As a property investor, it is important to navigate these turbulent waters with a “calm and cool head”. Opportunity and profit can be found in all corners of Bangkok, by simply assessing press releases and evaluating their effects on the property market!
Interestingly, despite the continuous and incessant flow of news some transformational trends are emerging.
Let’s explore “The 5 Big Trends” that are redefining Bangkok’s Property Market:
1. Mass Transit (MRT & BTS) Development and Extensions
Bangkok’s urban landscape is undergoing an enormous transformation, primarily led by the upgrade and extension of its Mass Transit Lines (BTS Sky Train & MRT Underground). The city, has just welcomed the launch of the Purple Line linking Nonthaburi to Tao Poon and BTS Green Line extension from Samut Prakarn to Bearing.
Over the next decade, Bangkok will welcome a total of 11 new lines. This includes new networks, notably the MRT Orange Line (Rama 9- Ramkhampheng), the MRT Pink Line (Kae Rai- Minburi), MRT Yellow Line (Lat Phrao to Hua Mak) and extensions of the MRT Blue (Taopoon-Thapra- Hualamphong).
This ambitious infrastructure upgrade, will connect several underserved neighborhoods potentially creating new business and residential hubs throughout Bangkok.
2. Increasing Price of Land in Central Bangkok
The Capital’s prime areas (I.e. Sukhumvit, Silom-Sathorn, and Ploenchit-Wireless) are experiencing hiking land prices resulting in record breaking land deals.
The former site of the Australian Embassy on Sathorn Road was recently acquired by Supalai Plc. The property sits over a 7-Rai Plot of land and was reportedly sold for a breathtaking Bt 4.5 Billion.
Another recording smashing land deal, was the acquisition of the 25-Rai British Embassy site located on Wireless Road. The property was reportedly sold for Bt 18.6 Billion by the Central Group.
Hiking land prices especially for developable land in Bangkok’s prime areas, are becoming a general norm. As a result, developers acquiring these expensive plots are reactively pressured into developing super luxury condominiums, to ensure a sustainable return on investment.
3. Mega Projects
A combination of Mass Transit extensions, hiking land prices in the CBD and changing lifestyle requirements of Bangkok’s residents, is resulting in an urban refocus. With several established developers launching ambitious mixed-use developments rather than single condominiums.
These projects will incorporate residential, retail, leisure and office elements into a fully-integrated experience. This shift, could potentially allow developers to profit from the sale of residential units and also ensure sustainable rental income from the leasing of commercial space long-term.
Several high-profile projects have been launched, dotted around the city. Some notable examples include “One Bangkok” a massive Bt 120 Billion development led by a JV between TCC and Frasers Property Holdings and “Icon Siam” a luxury riverside complex spread over 50-Rai developed by a JV between Siam Piwat and the CP Group.
The scale of such projects, means that most of these mega developments are located in peripheral or non-central locations. Creating massive opportunity for the urban transformation of these peripheral locations.
4. Spotlight on Peripheral Locations
The trends above, are inevitably having a knock-on effect on non-CBD locations (Peripherals) that are experiencing unprecedented interest by developers and investors. Central Bangkok’s increasingly expensive residential and commercial property, is inevitably resulting in spillover to newer and relatively more affordable neighborhoods.
This trend has put the spotlight on locations such as “Tao Poon-Bang Sue” highlighted as a future transport and logistics hub, “Rama 4” described as a natural extension to the CBD and even the “Bangkok’s Riverside” described as the Capital’s next luxury residential hotspot!
5. JVs and Foreign Buyers
Traditionally local residential developers, have focused their marketing and sales activities on the Thai market. However in recent years, foreign buyers especially from China, Hong Kong and Singapore have emerged as important and highly-profitable marketplaces for Thai Condo developers.
With established players such as Sansiri, estimating that international sales will contribute over 25% of its revenue over the next few years. This has led several developers such as Sansiri, Ananda and TCC to ramp up their international marketing and sales efforts.
Several local companies are taking it a step further and forming joint ventures with international companies, hoping to tap into their JV partner’s home markets. This includes major joint ventures such as Sansiri and Tokyu Corp, All Inspire and Hoosiers or even Singha Estate and Hong Kong Land.