Rise of Rama IV Road

Rise of Rama IV Road

New mixed-use developments on the road bring the promise of jobs and residents, but also more traffic and garbage headaches

Rama IV Road will soon have a different skyline, with four mixeduse projects set to open within five years. (Photos by Patipat Janthong)
Rama IV Road will soon have a different skyline, with four mixeduse projects set to open within five years. (Photos by Patipat Janthong)

Mushrooming mixed-use projects along Rama IV Road offer a glimpse of more hustle and bustle in the near future, with prospects of job creation and higher land prices in the making.

But there are two sides to a coin. Turning Rama IV Road into a new hub of finance, commerce and residential looks set to bring more traffic congestion, garbage disposal problems and property oversupply.

Along the road, particularly a 3.5-kilometre section stretching from Sam Yan to Klong Toey intersection, massive investment from the property sector worth a combined 185 billion baht has been injected into four new mixed-use developments.

The largest, also regarded as the country's largest private sector project, is One Bangkok, with an investment of over 120 billion baht. It is developed by a joint venture between TCC Assets and Frasers Property.

Owned by the Sirivadhanabhakdi family, both firms are also developing the PARQ, a new mixed-use project located only 1.5km away from One Bangkok.

The family is also a major shareholder of SET-listed property firm Golden Land Property Development Plc, the developer of Samyan Mitrtown, which is scheduled to open in September this year.

In addition to the family's three mixed-use developments, there is also Dusit Central Park, a joint venture of Dusit Thani Plc and Central Pattana Plc.

The PARQ, One Bangkok, Dusit Central Park and Samyan Mitrtown are adjacent to four MRT stations -- Queen Sirikit National Convention Center (QSNCC), Lumpini, Silom and Sam Yan, respectively.

All except Samyan Mitrtown are situated on leasehold plots owned by Crown Property Bureau. Samyan Mitrtown is on a leasehold plot owned by Chulalongkorn University.

UNPRECEDENTED 2023

2023 will bring about a sea change for the entire Rama IV district, based on timelines announced by developers of various mixed-use developments, said Andrew Gulbrandson, head of research and consulting at property consultant JLL Thailand.

"Not only will the Benjakitti Park expansion, The PARQ phase one and the redeveloped QSNCC be open, but the first phase of One Bangkok will be completed," said Mr Gulbrandson.

One Bangkok plans have 10 towers connecting on 10 floors from the fourth basement floor to the fourth floor. The total area is projected to be 1.837 million square metres, the country's largest property development at one site.

The residential component is expected to have a total of 2,556 units, comprising 1,197 hotel rooms and 1,359 leasehold condos. There will be a large auditorium with 3,031 seats and parking lots that can accommodate 11,786 cars.

He said some parts of Dusit Central Park may also be open for business. As a result, in just a few short years, residents, workers and visitors will have a wide range of new opportunities to live, work and play.

"The area around MRT QSNCC should absolutely be viewed as a major upcoming mixed-use cluster, especially with the new QSNCC and Benjakitti Park," said Mr Gulbrandson. "The park will be roughly the same size as Lumpini Park and an asset for many visitors to projects along Rama IV Road."

He said One Bangkok and Dusit Central Park in particular will reinforce Rama IV's position as the city centre for decades to come because the road connects Pathumwan, Bang Rak and Sathon districts, which have been the commercial hearts of Bangkok since the 1960s.

With these projects anchoring the future of central Bangkok, it is reasonable to expect that adjacent neighbourhoods will become more desirable for a wide variety of use and contribute to rising land and asset prices, said Mr Gulbrandson.

RISK-SHARING

"It is possible that customers who rent grade A office buildings in nearby areas, especially international companies, will move into new office spaces on Rama IV Road because existing office buildings located in Silom or Sathon areas cannot provide them with more space," said Surachet Kongcheep, managing director of Phoenix Property Development and Consultancy Co Ltd.

But these projects might not see a high occupancy rate for retail businesses, not because of project locations, but rather that sector is experiencing a slowdown, he said.

Job creation is also likely to increase spanning across different occupations as the mixed-use projects have various purposes, said Mr Surachet.

New project The PARQ is being developed near the QSNCC MRT, an area dubbed an upcoming mixed-use cluster.

The elite will likely speculate on property prices at these projects, while the middle class and low-income earners are likely to work as office employees and staff in the services sector, respectively, said Suksant Chuenarrom, director of the Research Center for Creative and Architectural Buildings at Bangkok University.

"Demand in inner areas of Bangkok is there and the location is not an issue. Risks related to these projects are rather internal management structure and debt [incurred from project funding]," said Mr Suksant.

"Other areas that warrant observation are higher rental fees and impediments to new business opportunities. Traffic congestion and garbage disposal are poised to be more severe problems when these projects are fully developed.

"Both the public and private sectors have to work together to manage these issues."

There is also a concern about an oversupply of properties in Bangkok, specifically condo units.

However, mixed-use projects are developed for risk-sharing as each project has its own target, he said.

Prime locations also offer greater occupancy and sale prospects for upcoming mixed-use projects, said Mr Suksant.

Aliwassa Pathnadabutr, managing director of property consultant CBRE Thailand, said the Rama IV area has a unique characteristic: proximity to two of Bangkok's larger parks, Lumpini and Benjakitti, as well as the Royal Bangkok Sports Club.

"This increases the value of neighbouring areas, while providing much-needed views for both residential and commercial developments," she said. "Rama IV has always been a key road in Bangkok, with very high traffic. With these developments, this area will become even more prime."

The biggest impact will be in the office sector, as there will over 2 million sq m of new office space coming onto the market within 4-5 years, said Ms Aliwassa.

"The pressure will be higher on landlords of older office buildings to up their games to compete in the market," she said. "Building technology, lifestyle and ways of working have changed and landlords must adapt to attract tenants."

TRAFFIC SOLUTIONS

Despite the hope for job creation and business opportunities, greater traffic congestion is a major concern once these massive developments open, said CBRE Thailand.

Connectivity by skywalk or underground walkways at major intersections and from building to building will help ease traffic congestion and facilitate commuters, said Ms Aliwassa.

Mr Gulbrandson of JLL suggested two solutions that would create a wide variety of benefits, though neither would be easy to implement despite their simplicity.

The first is congestion pricing -- charging users who enter certain parts of the city in an effort to reduce traffic and improve mobility. Such schemes have been successfully implemented in Singapore since the 1970s, in London and Stockholm, and most recently in New York City.

"In fact the World Bank first proposed congested pricing for Bangkok in the late 1970s, but sadly plans were not implemented," he said.

The second solution is to continue to improve the city's mass transit network. As extensions of the MRT Blue Line open later this year and in 2020, the loop line will connect vast parts of the city and most of the existing transit lines and those under construction.

Much like the Yamanote Line in Tokyo, this will improve accessibility and mobility for many people, including those who will live, work and play along Rama IV Road, said Mr Gulbrandson.

Whether improvements to the Blue Line will be sufficient to handle future demand from projects along Rama IV Road remains to be seen, he said.

Building the proposed southern branch of the MRT Grey Line, which would begin at the Rama IV-Sukhumvit intersection and run along Rama IV west to Sathon Road, jutting down Sathon to Narathiwat Road and ultimately replacing the BRT system, would vastly improve accessibility and mobility, said Mr Gulbrandson.

It would open up new parts of the city for development, creating opportunities to build affordable residential projects.

"The Grey Line could be very financially successful for investors and operators, given existing demand along the route coupled with projects under construction," he said.

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