Developers flock to city hotspot as land prices soar
The Ratchathewi-Phetchaburi zone in Bangkok has become a hotspot attracting significant interest from property developers thanks to its potential to become a major urban transit interchange in 2020.
Land prices in the area have risen at a pace comparable with the Siam Square area, according to consultancy Plus Property Co.
While new projects are few and far between, they have registered a spectacular take-up rate of 95%.
Data from the first half of this year showed a 6% year-on-year increase in prices.
Managing director Poomipak Julmanichoti said a survey of land availability within a 500-metre radius of Ratchathewi skytrain station indicated a rising level of interest thanks to the central location and ongoing outward residential development growth from the now-dense Sukhumvit area.
As one of Sukhumvit's many parallel roads, Phetchaburi Road provides convenient access to Bangkok's main business and shopping districts.
Furthermore, the Orange Line skytrain extension will make Ratchathewi a major interchange connecting the new business district in Bang Sue along with current ones such as Sala Daeng, Siam Square and Asok.
The interchange station, expected to open in 2020, will generate higher interest in residential and commercial property development in the area.
While there is only a limited amount of land available in the area, demand continues to rise unabated, as evidenced by the excellent 95% average take-up rate.
New projects are able to move units very quickly despite relatively high prices, a consequence of the additional development costs from the dismantling of old buildings on acquired land.
Today, only 57 units remain unsold in the area, and the zone from Phetchaburi Road and Ratchathewi skytrain station to Bangkok Business College is the most popular stretch thanks to a direct shortcut to major shopping centres.
Condominium prices in the area continue to show consistent growth in response to rising demand.
In the first half, prices rose by 6% from the end of last year, to 158,046 baht a square metre.
Over the past three years, prices have increased by as much as 47%, while high-rise developments are available only at prices well beyond the current average.
Last year, Ideo Q Siam-Ratchathewi (sold out) and Wish Signature @ Midtown Siam (on the verge of selling out) were launched with an average price of 175,000 baht per sq m, while sell-on prices for high-end developments such as Pyne by Sansiri cost 250,000 baht per sq m, up by 80% from the launch price six years ago.
Given these figures, new developments launched in the area are set to be priced above 200,000 baht per sq m.
In the rental market, one-bedroom units are averaging 800 baht per sq m per month, representing a 6% return on investment.
Developments in this zone remain popular due to limited land availability.
"An empty plot in Ratchathewi district is virtually impossible to find," said Mr Poomipak. "In addition to its close vicinity to the business district, leading malls and major academic institutes, Ratchathewi also enjoys high demand among foreigners thanks to nearby embassies and international companies."