Expats Still Demand Quality Apartments
Owners of older developments should renovate their properties to remain competitive as new, well designed apartments can attract expatriates in rental markets even if they are relatively small, according to the property firm CB Richard Ellis.
The total apartment stock in central Bangkok is now 10,048 units; 337 new units in nine buildings came on the market in 2006. The current occupancy rate is 89%, a slight drop from the previous year. Vacancies increased in older buildings that had not been renovated.
Theerathorn Prapunpong, director of residential leasing services at CBRE, says a clear trend is emerging where new, well located, and well designed buildings are capturing more market share and achieving higher rentals per square metre than older developments.
“Tenants want modern, well equipped kitchens with natural light, hotel-standard bathrooms with features such as separate shower cubicles. Today, tenants also expect such consumer goods as dishwashers and LCD televisions, and are willing to pay top rents for the best designs,” he said.
CBRE says older apartments and individual condominium units in buildings more than 10 years old have started to suffer, unless the interiors and common areas are renovated.
The number of expatriates with work permits in Bangkok totalled 67,412 as of the end of 2006, an increase of 12.5% year-on-year, according to the Alien Occupational Control Division of the Department of Employment.
CBRE predicted that the growth in expatriate numbers could slow now in line with the economic slowdown and restrictions on foreigners owning companies in the service sectors.
Similar research on expat apartment demand in central Bangkok from the property firm Jones Lang LaSalle shows demand remained strong with average occupancy at more than 90% due to the steady growth of expats.
It said more than 21,000 new work permits of resident expats were issued in Bangkok last year, up from an annual average of 17,800 over the past five years.
JLL’s latest study shows that 11,000 apartments are located in central Bangkok, and the most popular location is in the Sukhumvit area. The average asking rent was around 290 baht per sq m. Newly completed buildings enjoy higher rents, between 380 and 550 baht per sq m.
