Bangkok's High-end Condo Targeting Niche Market

[george]

Bangkok's high-end condo targeting niche market

BANGKOK: -- Against the backdrop of the country's economic slowdown, luxury condominiums are mushrooming, particularly in the heart of the Bangkok metropolis, targeting affluent potential buyers.

High-class condominiums are mainly in prime Bangkok locations in the central business district--Sukhumvit, Wireless Road, Sathorn, or Silom--basically those locations where expatriates live and which are commercial areas.

The Thai Contractors Assets Company’s ‘Oriental Residence’ on Wireless Road under construction is a five-star serviced apartment and a permanent condominium within the same building. With condos on offer at Bt160,000 per square metre, the project aims to satisfy the niche market demand of clients who are looking for pure comfort and convenience.

“We’ve actually done a lot of studies on customer demand on this type of product [luxury condos]. We found that it’s the demand of those who want to live in the very heart of the city, while at the same time loving comfort and convenience with add-on services from our serviced residence (at the lower part of the building),” said Valaithip Charanachitta, Oriental Residence chief officer.

Noting that the feedback was good, as the number of reserved units rose to around 50 per cent, Ms Valaithip said most of the clients were Thais, counting for 85 per cent of buyers, while the rest were expatriates having lived in Thailand for quite some time and knowing the location so well.

However, Ms Valaithip said that due to the current economic slowdown, the company has not yet started to penetrate overseas markets.

'The Emporio Place' on Bangkok’s Sukhumvit 24 is another upmarket condominium of TCC Capital Land. The project’s chief executive officer, Soammaphat Traisorat, shared some interesting idea of who would be living in and own such a unit here that costs around Bt13-30 million.

"The concept of this property’s location came from the fact that many expats live in this Soi [sukhumvit 24]. So, there are many foreign tenants for condos,” said Soammaphat. “It’s also a location that suits Thais who enjoy the urban lifestyle, as this area is within reach of facilities like BTS [bangkok’s Sky Train] and the luxury Emporium department store."

Mr Soammaphat cited his company’s studies that the ratio of residents would be both Thais who would really live in their properties, as well as Thai investors who bought units merely for letting to foreigners.

But he said in the end condo buyers were Thais, counting for some 60-70 per cent of overall customers. This is due to the Thai law which states that foreigners can only own 49 per cent of the overall units in a condominium building.

Concerning the market trend of luxury condominiums in the country within the coming 3 to 5 years, Mr Soammaphat mentioned a bright future should be foreseen, as the Asian economy has shown signs of recovery. However, the situation would depend on the general economic situations.

Meanwhile, president Athip Pichanon of the Thai Condominium Association commented that Thailand would in any case be an interesting and charming country to foreign investors owing to its top value for money. A high-end condominium’s price per square metre in Bangkok is about four times cheaper than that in Singapore.

"Thailand’s overall condominium value in circulation is almost Bt100 billion. Upmarket condos, of which a square metre is priced at Bt80,000 minimum, take around 25 per cent of the market share, or around Bt25 billion,” said Thai Condominium Association president.

Around half the buying is for investment, while the other half is for real living by owners. However, Mr Athip said less and less people buy luxury condos just for profit speculation.

"Today buyers mainly purchase high-end condos for investment, but sometimes it depends. If the market has been rising for awhile, let say if the owner gets hold of his property for around three years, he may let out his condo and then resell it later," said Mr Athip.

As a result of the changes in urban lifestyle including Bangkok’s elevated and underground trains that help urban dwellers avoid serious traffic congestion, many middle- and upper-class Thais and expatriates choose to live in condominiums although most of the time their properties can be much pricier than a house with a garden in the suburbs.

-- TNA 2009-11-10

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[PattayaParent]

Meanwhile Raimon Land are trying to peddle their unsold high end condos to the niche timeshare market.

[mark5335]

Meanwhile Raimon Land are trying to peddle their unsold high end condos to the niche timeshare market.

I guess Raimon Land's current projects under construction are outside of the segment described above as "High-class condominiums...mainly in prime Bangkok locations in the central business district--Sukhumvit, Wireless Road, Sathorn, or Silom--basically those locations where expatriates live and which are commercial areas". Given the size of their current projects which are located primarily in resort locations, it will be interesting to see how well they do with the timeshare approach.

Their next project, at 185 Rajdamri, is located in the prime district between Silom and Wireless, however, I have heard that they have changed their original plans and it will now be a a mixed development of a Raffles branded hotel as well as high end condos.

[pkrv]

Their next project, at 185 Rajdamri, is located in the prime district between Silom and Wireless, however, I have heard that they have changed their original plans and it will now be a a mixed development of a Raffles branded hotel as well as high end condos.

Pure cross reference to the skysraper forum.

http://www.skyscrapercity.com/showthread.p...t=185+Rajadamri

[mark5335]

Their next project, at 185 Rajdamri, is located in the prime district between Silom and Wireless, however, I have heard that they have changed their original plans and it will now be a a mixed development of a Raffles branded hotel as well as high end condos.

Pure cross reference to the skysraper forum.

http://www.skyscrapercity.com/showthread.p...t=185+Rajadamri

Thanks for the cross reference, although I didn't notice the reference to the recent amendment in the development plan to now include a Rafflles Hotrl, as heard from their mortgagee.

Edited November 10, 2009 by mark5335

[PattayaParent]

Given the size of their current projects which are located primarily in resort locations, it will be interesting to see how well they do with the timeshare approach.

Just what's needed in Pattaya and Phuket, more timeshare salesmen on the streets.

But The River is also going timeshare so expect to be approached on Nana, Cowboy and Patpong too!!

[pkrv]

I too have monitored The River as a sort of barometer of the Bangkok Condo market

http://www.skyscrapercity.com/showthread.php?t=567405

It has actually been around as a project since 2005 - I know this because it was one of the projects I considered. An awful lot of projects have completed since then.

However there is not much space left in the CBD area for building new condos. My guess is that with the arrival of the airport express - new condominium projects will expand out to Makkasan.

A map showing the location of the new station and area is here:

http://www.theparkresidence.co.th/map.html

Picture of the area below:

Edited November 11, 2009 by pkrv