Some market
intelligence
to bear in mind
According to CB Richard Ellis, the total supply of serviced
apartments in downtown Bangkok was 6,823 units as of the third quarter of
2003, a 13% increase compared to the same period of 2002. Eight new projects
with 880 units combined were launched within the first 9 months of 2003.
Future supply will increase by about 1,500 units over the next 18 months.
Of these, around 700 units will be grade A, the classification given to some
64% of the total existing supply.
CB Richard Ellis defines Grade A as projects that have good
location and are easily accessible, with a secure environment that ensures
the privacy of its occupants. The buildings have a good design, layout and
decoration, and have good management, some by international operators. These
projects also have ample parking and adequate facilities including swimming
pool, fitness centre, restaurant, tennis courts, etc. Most are located in
the main downtown areas of Sukhumvit, the Central Business District (CBD
— including Silom and Sathon), Central Lumpini and Riverside/Rama III. Sukhumvit
has the largest share of serviced apartments with 3,609 units, followed by
the CBD with 18%.
OCCUPANCY RATES
As of the third quarter of 2003, there were 5,430 occupied units, representing
an 80% average, down from 87% in the third quarter of 2002.
RENTALS
Serviced apartment rents averaged about 800-900 baht per sq m per month as
of the third quarter 2003 (compared with 450-500 baht per sq m for prime
office rents). Some new projects have provided special promotional rates,
and the operators may or may not increase the rents after the introductory
period as competition potentially intensifies.
OUTLOOK
According to Suwanna Buddhaprasart, senior executive vice president of Q House,
operator of Centrepoint Serviced Apartments, the outlook for the sector
from an operator’s point of view is bright. “The positive investment outlook
will continue to drive demand for serviced apartments to house increasing
numbers of foreign executives assigned to Bangkok for bids and projects,”
she said. Pointing to Labour Department statistics indicating there are
some 35,000 foreigners holding work permits in Thailand, she added that
more already resident expats are being lured out of hotels and apartments
by the attractions of serviced apartment living. |
