Location and land cost remain key factors

Location and land cost remain key factors

Walden Asoke, a low-rise condominium project, will be located on a 220-square-wah plot on Sukhumvit Soi 23.
Walden Asoke, a low-rise condominium project, will be located on a 220-square-wah plot on Sukhumvit Soi 23.

Location and land cost are key factors to develop condominium projects in inner Bangkok, which are attractive to investment buyers as they provide good rental yields and capital gains, says property developer Habitat Group.

Chief executive Chanin Vanijwongse said locations should be popular among foreigners as they are the target tenants, citing areas like Asok, Phrom Phong and Thong Lor, where Japanese and Europeans prefer to stay.

"Investment buyers usually look for yields and capital gains when buying a condominium unit," he said. "If a project's location can draw foreign tenants, the rental yield will be more attractive."

While location should be attractive, land cost should be low to offer an interesting sales price for an attractive capital gain down the line. The best price range for a condominium unit in inner Bangkok should be lower than 200,000 baht per square metre.

Mr Chanin said while land plots on main roads are generally more attractive than those on sois, they also have higher land prices.

"With lower selling prices, a condominium unit on a soi will have more room to grow, compared with that on a main road," he said. "But locations should be within walking distance of mass transit stations."

Property consultant Colliers International Thailand said the take-up rate of condominium units priced between 200,001-250,000 baht per sq m was 80%, the highest in the market at the end of 2017. That was followed by condominium units priced between 150,000-200,000 baht per sq m, which had a take-up rate of 70%.

Habitat surveyed eight newly-launched condominium projects in locations from Asok to Phrom Phong and found those where average unit prices were below 200,000 baht per sq m had a take-up rate of over 80%.

Among five BTS stations from Nana to Ekamai, Thong Lor saw the highest take-up rate of 95% or 2,079 units sold from a total supply of 2,182 units. The average selling price in Thong Lo was 250,000 baht per sq m.

Next was Asoke, where the take-up rate was 83% or 2,077 units sold from a total of 2,488. Phrom Phong came third with 82% or 2,173 units sold from a total of 2,652 units. The average prices were 238,000 and 250,000 baht per sq m, respectively.

In Ekamai, the take-up rate was 75% or 860 units sold from 1,147 units, with an average price of 155,000 baht per sq m. The take-up rate in Nana area was 70% or 921 units sold from 1,316 units, with an average price of 244,000 baht per sq m.

Meanwhile, Habitat, a Pattaya-based developer, will launch its second project in Bangkok, Walden Asoke, with 83 units priced 190,000 baht per sq m on average.

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