Bangkok’s Central Business District is comprised of several neighborhoods:
- Ploenchit- Lumphini
- Rama 9
Both districts are thriving business hubs, and both offer desirable lifestyles. On top of this, the travel convenience of both areas makes them ultra-popular residential choices for Bangkok’s Thai and expat residents.
This appeal, often leads many prospective buy-to-let investors looking to invest in Central Bangkok’s prime areas to ask:
Which of the two neighborhoods offer higher investment returns?
To answer this frequently asked question, Fresh’s Editorial has conducted a small research and crunched the numbers!
How did we collect the property data?
Before diving into the results of this research, readers will undoubtedly want to understand the source of the data and where it was collected.
This article is a simple and informal study and data was collected from leading Thai Property Portals/ Property Aggregators.
To review our research methodology:
1. Condo Projects Selection
- Fresh’s Editorial selected condos at random, based on the team’s in-house rental/sales experience.
- Projects needed to be within 1 km of the BTS/MRT Station and offer freehold property titles.
- Sample of 15-20 condos were selected per location.
2. Collection of Data
- Rental yields and price per square meters (Price PSM) data was collected from the 3 main Bangkok property aggregators Hipflat, DDproperty and Dotproperty.
- Data was collected for the following areas: Silom-Sathorn (BTS Chong Nonsi and BTS Saladaeng) and Sukhumvit (BTS Nana, BTS Asoke and BTS Phrom Phong).
- This allowed the Editorial to calculate average rental yields and price PSM.
Silom- Sathorn vs. Sukhumvit average Rental Yields and Price PSM?
Overall the data shows that the winner for both categories, with the highest average rental yield and price PSM was Sukhumvit!
The prime Sukhumvit district, consists of 3 core neighborhoods notably Nana, Asoke and Phrom Phong. According to the study, the district currently offers rental yields of 4.78% and average price of approx. 161,900 THB per/sqm.
Prime Silom-Sathorn comprised of Silom (Saladaeng) and Chong Nonsi. According to the study, the district also offers rental yields of 4.5% and an average price of approx. 169,400 THB per/sqm.
This is largely in line with Bangkok’s average rental yield range of 4-6% for prime central locations.
Sukhumvit or Silom-Sathorn: Which is the better investment location?
So how should investors interpret these results?
Should they focus their investments only in Sukhumvit?
Here is an overview and evaluation:
– Despite Sukhumvit having the lead, the results between both districts were relatively close and largely in line with expectations of 4-6% rental yield for the Capital.
– Silom-Sathorn is an established and older section of the Central Business District, with heavily restricted developable land availability. This has resulted in the development of expensive and high-end residential projects in recent years. These newly completed projects may have inadvertently pushed rental yields downwards and price upwards!
– Sukhumvit is a relatively more modern Business District. As it offers residential diversity in terms of quality and price of projects available for sales and rent. This resulted in more favorable rental yields and lower average price for condos.
Condo projects in prime Silom-Sathorn and Sukhumvit are generally high-priced and expensive. Based on the research findings, a standard sized 1-Bed (35 sqm) would be priced at the following:
Sukhumvit (Average PSM 161,000 THB) @ 35 Sqm= Approx. 5.6 MB
Silom-Sathorn (Average PSM 169,000 THB) @ 35 Sqm= Approx. 5.9 MB
Whether these prices are justified is a topic of much debate, that is beyond the scope of this article. Ultimately, investors will need to invest in line with their financial situation and investment objectives.
Overall, both districts are vibrant business and leisure hubs, that offer amazing work-life balance to its residents. This makes condos located in these neighborhoods both easy to rent and easy to eventually resell on the secondary market.
As constituents of prime central Bangkok, Sukhumvit and Silom-Sathorn offer investors the invaluable appeal of investment stability and security!