Nexus Property Marketing Company Limited (NEXUS) points out that condominium market in mid-Sukhumvit Area (from Sukhumvit 21 to Soi Ekkamai) has shown a continuous growth, following the surging of the selling price per square meter over the past five years. The selling price in mid-Sukhumvit grows 8.2% per annum on average, followed by 7.2% in Pathumwan-Rachathewi area and 6% in Sathorn-Bangrak area. Besides, the mid-Sukhumvit has a total of 191 projects with 43,418 units, Pathumwan-Rachathewi 135 projects with 38,912 units and Sathorn-Bangrak 86 projects with 20,385 units. To date, the mid-Sukhumvit area has sold about 88% of total.

Source: Nexus Property Marketing Co Ltd, November 2018

Market Growth In Thonglor VS Investment Yield Comparison

One of the attractive locations in the mid Sukhumvit is Thonglor where it has a plenty of famous restaurants, stylish coffee cafes and small community malls. Such charm makes Thonglor a prime area for those who would like to live in the city center and those who want to invest and rent their places to Thais or foreigners particular Japanese.

Mrs. Nalinrat Chareonsuphong, Managing Director of Nexus Property Marketing Company Limited (NEXUS), said Thonglor area has grown continuously due to the rising of the average price per square meter over the past five years. Recently, the average selling price of high-end condominiums in Thonglor has increased to 250,000 baht per square meter. According to the survey of 50 condominium projects totally 11,386 units in Thonglor during 2003-present, it found that the average final price per square meter was 12 per cent higher than the average price when the projects were first launched. However, the average resell price has surged 32 per cent from the average opening price during the last 15 years.

Source: Nexus Property Marketing Co Ltd, November 2018

Source: Nexus Property Marketing Co Ltd, November 2018

From the investment angle, the selling price of condominiums in Thonglor has continued going up while the rental price has increased in a slower pace. Hence, in principle, the investment yield in new projects is not as high as existing projects. According to the survey of the condominium rental market in Thonglor, the average annual yield is between 3% to 6% and can be divided into three groups – high yield at around 6%, average at 3.8% and low at 3%. The yield differences are generated by various factors such as locations, price, unit size, common spaces, surroundings and extra services of each project. In conclusion, there are 3 main factors for projects to make a high yield at 5-6 per cent as following

Location This is the first factor that tenants consider when they want to buy condominiums for investment. The project should be easily accessed, near public transports, linked to main roads and surrounded by convenient stores and restaurants.

Services Complete services are another factor that has strong impact on purchasing decision. If projects can provide extra services such as shuttle service, private taxi and a coordination with room keeping service, car wash and repair service agents, those projects are likely to gain more attention from tenants.

Maintenance It helps sustain a good image for condominiums. If a project has been operated for a while and still have a good maintenance, it will make tenants confident and stay longer. At this point, investors will higher return in continuation than newly-launched projects which they have to buy at higher average price.

Therefore, to look for a condominium for investment that can generate a high yield is not only be located near BTS or MRT but also depend on other factors mentioned above. Although the average yield in Thonglor area is as high as 3.8%, it may not generate the highest yield compared to other areas of Bangkok. However, rental demand in Thonglor has never dropped and the growth rate is more constant than some other area with higher yield. Thonglor is the expat centre of Bangkok and foreigners especially Japanese like to live there as it accommodates a Japanese community as well as has a plenty of restaurants and supermarkets that meet Japanese lifestyle. Therefore, it is not surprising that Thonglor has become another prime area for rental market.

“Thonglor is another attractive location for property investment because there is high demand from foreigners who look for a place to rent and it offers more possibility to get consecutive return. In Thonglor area, the sooner they invest, the better yield they may get in the future as the average selling price keeps going up every year so the yield can get lower. Therefore, to buy a condominium for rent in Thonglor area is probably another option that investors should consider to invest now,” added Mrs. Nalinrat.