research H1 2011 Bangkok CONDOMINIUM Market Half year Highlights By the end of the first half of 2011, the Bangkok condomimium supply was about 251,327 units. The majority of supply was shown in the peripheral area of Bangkok, with approximately 51% of total new supply : The hot area in peripheral area was at Bangna and Srinakarin which are the new destination for condominium development. In the city fringe area Rama 9 and Ratchadapisek area are the fabulous areas, with about 5,276 units. The take up rate decreased slightly from 48.3% in the second half of 2010 to 45.8% in the first half of 2011 The price of condominium located in the peripheral area remained unchanged, where the price of the condominium located in the city area increased by 5%
H1 2011 Bangkok MaRKET Half year supply trend During the first half of 2011, there were about 32,549 condominium units launching, The launches were spilt into 3 aeas, city, city fringe and peripheral area, with 19%, 23% and 51% respectively. At this moment it appears as though the economy is gaining momentum. Despite tougher competition in the mushrooming condominium sector, there was still a number of supply launching in the first half of this year, with about 32,549 units, totaling the supply of 251,327 by the end of June, 2011. Bangkok Stock & New Supply, 2004 to 1H 2011 The launches were spilt into 3 areas, city, city fringe and peripheral area, with 19%, 23% and 51% respectively. Supply in the peripheral area of Bangkok contains the lion s share of units. Srinakarin and Bangna area is the new destination for condominium development, with approximately 7,933 units launching in the first half of 2011, or about 42% of the new supply in the suburban area. Bang Na-Trat Road was growing strongly as a number of shopping centre are set to open in this location between now and 2013. The skytrain extension from On Nut to Bearing Station has challenged property developers to launch new residential projects in the area. Another fabulous area in the suburban is Chaengwattana, with about 7,395 units being launched during the first half of this year, representing about 39.1% of new supply in the suburban area. 2
www.knightfrank.com The majority of supply in the city fringe area has shown in Rama 9 and Ratchadapisek area, with about 5,276 units or 72% of total launch in the city fringe area. The new supply has grown in order to tap new demand in the area. The construction of Central Rama 9 is due to complete by the end of the year. Ratchadapisek would become a new central business district of Bangkok when multinational firms and the SET moved their headquarters into the area. With a large number of jobs moving along this growth area, punters are taking a chance of reviving the junction. New Supply Launching 1H 2011 by Location New Supply in 1H 2011 & 2010 by Location 3
H1 2011 Bangkok MaRKET Half year demand trend The take up rate has decreased from 48.3% in the second half of 2010 to 45.8% in the first half of 2011. The investment climate is expected to be positive after the election. The premium residential market showed consolidation in the second quarter of 2011. It has yet to return to the heady days prior to the global financial crisis but the success of some projects points the way to a recovery. The take up rate has decreased from 48.3% in the second half of 2010 to 45.8% in the first half of 2011. The take up units during the second half of last year dropped from 24,895 units to 14,907 units in the first half of this year. This is due to the fact that the medium to low end market down in the dumps since the majority of supply has launched from the second half of last year till the first half of this year. About 57,385 medium to low end condominium units were added during the second half of last year to the middle of this year, while no premium supply was added. Supply, Demand and Take up Rate of New Launch between 1H 2009 to 1H 2011 4
www.knightfrank.com Pricing trend the sharp increase of condominium price was grade b condominium located in the city fringe area, especially the ratchadapisek area, with about 10% increase from last year. development has already boosted land price in the location where the Bangkok Mass Transit System s extended route. The overall condominium price increased by 6% in the first half of 2011. The sharp increase was Grade B located in the city fringe area, especially the Ratchadapisek area, with about 10% increase from last year. The price of condominium located in the peripheral area remained stable while some projects increased slightly, with only 1% rise, where the condominium located in the city area increased by 5%. Supply, Demand and Take up Rate of New Launch between 1H 2009 to 1H 2011 outlooks The Bangkok condominium will be improving for the premium market due to Bangkok is still a top-three destination for lifestyle in the eyes of investors. Their interest in luxury Thai property is driven by a lift in optimism about the overall political and economic environment in Thailand. The new government had made significant promises about stimulating economic growth immediately. Major infrastructure projects were finally likely to progress. This would provide long-term support to economic expansion and be reflected in asset price appreciation, particularly for luxury properties. There will be the additional supply added to luxury market in the second half of 2011 and 2012. The medium to low end market will slow down after a dramatic number of launches form the second half of last year. This is likely to create pricing pressures and competition of condominium located in the peripheral of Bangkok. 5
H1 2011 Bangkok MaRKET Half year APPENDIX Location City Area : This is the area that surrounds the Central Business District as well as the area which is popular for expatriates, tourists and upper class Thais for both shopping and residential area. Another area in the City Area is the area along Chao Phraya River which lies on Charoen Nakorn and Rama III Road. The City Area can be divided into sub-area as followed: Central Business District (CBD): This is the area that encompasses Sathorn Road, Silom Road and Wireless Road CBD corridors. It is an established business location with quick access to Sukhumvit, Rama 3 and the riverside areas. Sukhumvit: This is the section of Sukhumvit Road between Soi 1 and Soi 63 to the north and Soi 2 and Soi 42 to the south. This popular area with expatriates and tourists spans includes the Asoke Intersection on the west to the Emporium Mall to the east. Rama 3 and Riverside: This is the area that stretches along Charoen Na Korn Road of the Chao Phraya River southward just past the Sathorn Bridge and to the north of Sipraya Road as well as the area along both side of Narathiwas Ratchamakarin Road. City Fringe Area : The area is located on the edge of the City Area, provides easy access to the City Area. This area is an alternative for condominium buyers due to the close proximity to many shopping centers and also convenient for transportation. The City Fringe Area can be divided into sub-areas as followed: Ratchada-Ladprao Area: This is the area where the MRT is opened. The area covered both side of Ratchadapisek Road and the beginning of Ladprao Road where there are MRT stations situated. Phahonyothin Area: This is the area which has just started popular in a couple of years. The area covers between Phahonyothin Soi 1 and Soi 13 and Phahonyothin Soi 2 to Soi 14. Bangkok Peripheral Area : The areas which are not included in the mentioned area. Our analysis will explore three major areas in this locations which are: Late Sukhumvit: This is the section of Sukhumvit Road both sides after the Sukhumvit Soi 63 stretch to the Bang na intersection. Thonburi Area: This is the area where the new BTS extension from Saphan Taksin to Wongwian Yai already opened. Other Areas: This area is the area outside the area already mentioned. Most of the remaining condominium areas are scattered across the city including Srinakarin, Chaengwattana, Kaset-Navamin, Petchkasem and etc. 6
www.knightfrank.com APPENDIX Classification Premium: The location is in Central Business District, Sukhumvit (Soi 1-63 and Soi 2-42) and along the area along the Chao Phraya River. The selling price of the unit is above THB 150,000 per square metre. The minimum unit size is 120 square metre. The minimum ceiling height of the unit is 3 metre. The unit decoration must provide high standard specification. Grade A: The location is in the Central Business District, Sukhumvit (Soi 1-63 and Soi 2-42), the area along Chao Phraya River and the Pathumwan to Soi Aree (Paholyothin Soi 5). The selling price of the unit must be in the range of THB 100,000 to 149,999 per square metre. The minimum unit size start is 50 square metre. The minimun ceiling height of the unit is 2.7 metre. Grade B: Any location in Bangkok. The selling price of the unit must be in the range of THB 60,000 to 99,999 per square metre. 7
Americas USA Bermu da Brazil Caribbean Chile Australasia Australia New Zealand Europe UK Belgium Czech Republic France Germany Hungary Ireland Italy Monaco Poland Portugal Russia Spain The Netherlands Ukraine Africa Botswana Kenya Malawi Nigeria South Africa Tanzania Uganda Zambia Zimbabwe Asia Cambodia China Hong Kong India Indonesia Macau Malaysia Singapore Thailand Vietnam Thailand Contacts Phanom Kanjanathiemthao Managing Director +66 (0)2643 8223 Ext 110 phanom.kanjanathiemthao@th.knightfrank.com Chaturawit Wattanapruk Executive Director +66 (0)2643 8223 Ext 120 chaturawit.wattanapruk@th.knightfrank.com Surasak Limpa-Arayakul Director, Valuation Department +66 (0)2643 8223 Ext 143 surasak.limpa-arayakul@th.knightfrank.com Roong Sitthisankunchorn Director, Property Management Department +66 (0)2643 8223 Ext 144 roong.sitthisankunchorn@th.knightfrank.com Marcus Burtenshaw Director, Agency Department +66 (0)2643 8223 Ext 121 marcus.burtenshaw@th.knightfrank.com Frank Khan Director, Head of Residential Department +66 (0)2643 8223 Ext 280 frank.khan@th.knightfrank.com Ulf Schaefer Director, Premier Home & International Project Marketing Residential Department +66 (0)2643 8223 Ext 286 ulf.schaefer@th.knightfrank.com Risinee Sarikaputra Associate Director, Research and Consultancy Department +66 (0)2643 8223 Ext 180 risinee.sarikaputra@th.knightfrank.com Knight Frank Research provides strategic advice, consultancy services and forecasting to a wide range of clients worldwide including developers, investors, funding organisations, corporate institutions and the public sector. All our clients recognise the need for expert independent advice customised to their specific needs. Knight Frank Research Reports are also available at www.knightfrank.com Knight Frank LLP 2011 This report is published for general information only. Although high standards have been used in the preparation of the information, analysis, views and projections presented in this report, no legal responsibility can be accepted by Knight Frank Research or Knight Frank LLP for any loss or damage resultant from the contents of this document. As a general report, this material does not necessarily represent the view of Knight Frank LLP in relation to particular properties or projects. Reproduction of this report in whole or in part is allowed with proper reference to Knight Frank Research. Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934. Our registered office is 55 Baker Street, London, W1U 8AN, where you may look at a list of members names.