Demand for high-end property remains strong in Thailand, with prices rising

The upper end of the residential market in Thailand has not only proved resilient, but it is showing remarkable strength in terms of sales volumes and prices. Demand is strong from local and international buyers, and from both potential residents and passive investors, and inventory is quickly being absorbed. Activity at the high end is concentrated in a few areas in Bangkok, resulting in the rise of hubs of premium properties downtown.

Mahanakhon

The history of MahaNakhon is instructive. The structure, an ambitious tower with a jarring, iconic facade, a 159-room hotel on the first 20 floors and 200 luxury residences on floors 23 to 73, was delayed by the global financial crisis of 2008, and then had to be funded through a series of protests and the eventual coup. At times, the project seemed on the verge of stalling and stood unfinished, a symbol of the on-again-off-again market. However, stability has set in and the fortunes of Bangkok are on the rise. At 314 metres the structure is the tallest building in Thailand, and sales are reported to be strong. MahaNakhon was officially opened in August 2016, with the shopping spaces being inaugurated that year, and the hotel and residences set for completion in 2017.

A Steady Pipeline

A number of other major landmark buildings are generating significant interest. Given the clear change in sentiment, they seem to be selling much faster than earlier developments.

The 25-storey 98 Wireless Road project, which is situated next to the US ambassador’s residence, is valued at BT5.8bn ($163.4m). A total of 77 apartments are being offered at an average price of BT550,000 ($15,500) per sq metre. Local media reported in September 2016 that 45% of the project had been sold, with completion expected in 2017.

“There has recently been a flood of activity on the residential real estate segment into luxury properties, and prices now for such developments consistently reach BT300,000 ($8450) per sq metre, a trend which looks set to continue its upward trajectory,” Aliwassa Pathnadabutr, managing director of real estate consultancy CBRE (Thailand), told OBG.

Other high-end projects include The Diplomat on Sukhumvit 39, where prices are as high as BT411,111 ($11,600) per sq metre, and the Mandarin Oriental Bangkok Residence on the Chao Phraya River. The latter set a price record for a penthouse in Bangkok, with a top-floor unit listed at BT620,000 ($17,500) per sq metre. By early 2017 the site was 28% completed and 60% sold. The property is set to be finished in 2019. “Property prices in the high-end market are rising at a high rate which outpaces inflation. One of the reasons for this is that the level of design and quality of amenities on offer in these units is continually expanding,” Nuttawut Phowborom, CEO of KPN Group, told OBG.

High-End Hubs

Recent activity has led to hubs of high-end development. Ploenchit-Chidlom is particularly noteworthy, the most expensive land in Bangkok having been purchased in that area in 2015 for BT1.9bn ($53.5m) per sq wah (equivalent to 4 sq metres). It is becoming a centre for green development as well, with many of the buildings, including 98 Wireless, receiving Leadership in Energy and Environmental Design certification. Park Ventures received platinum certification.

Projects on Rama IV Road between Lumpini Park and Klong Toei are rapidly transforming that area, which until recently was a mix of public buildings and shops. A mixed-use project is being developed by TCC Assets on the site of the Armed Forces Academy’s Preparatory School. A hotel, offices, condominiums and a mall are planned. The same developers have a similar project near the Queen Sirikit National Convention Centre, though completion is not expected until 2025, as well as one at the Sam Yam intersection, also on Rama IV.

A 53-storey luxury condominium project, Nimit Langsuan, is being developed in the area, with completion of the development expected in 2018. Other condo projects around Rama IV Road include Condolette Pixel, The Portrail, The Room, Aspire and Ideo Q.