Bangkok, October 3, 2018 – CBRE, a leading global real estate consulting firm, reveals that the rental housing market in central Bangkok is driven by foreign tenants working in Thailand, who prefer to rent in only a few specific locations, primarily opting for apartments, condominiums, or serviced apartments.

            The number of foreigners working in Thailand has been gradually increasing, yet the average monthly budget that tenants are willing to pay for rental housing has not seen an increase for several years.

            In terms of the quantity of rental housing, CBRE's research department found that there are relatively few new apartments under construction compared to the large number of new condominiums.

            While the supply of rental housing has increased significantly, demand has only risen modestly, leading to competition in the market. However, there are still opportunities for apartment developers and investors purchasing condominiums for rental purposes. A key factor is understanding tenant needs to successfully lease properties and achieve higher rental rates.

            The turnover of foreign tenants is constant, as the average duration of employment in Thailand is about three years, meaning there will always be new tenants deciding where they want to live.

            According to a survey by CBRE's research department in Q2 2018, there are approximately 10,000 apartments in popular areas for foreign tenants such as Sukhumvit, Lumpini, and Sathorn, while there are about 76,000 condominiums in the same areas. CBRE estimates that around 25,000 to 30,000 of these condominiums are owned by investors for rental purposes.

            Tenants, especially Japanese nationals, prefer to live in apartments with single owners rather than renting condominiums, as they can communicate directly with the owner regarding all maintenance issues. In contrast, in condominiums, the building manager is responsible for maintaining only the common areas, while the unit owner is responsible for the interior of the apartment, which can be more challenging for tenants when it comes to repairs.

            In Bangkok, few condominium owners hire agents to manage their units and negotiate with tenants. Generally, condominium tenants must contact the unit owner directly for all matters related to the apartment, and the owner's ability to manage maintenance varies based on individual experience, making it even more difficult if the owner does not reside in Thailand. Only in cases where the condominium is managed by a hotel chain with a dedicated customer service department do owners pay higher management fees for the common areas, and the building management will also handle maintenance issues within the units.

            Apartment owners located in popular areas for foreign tenants who understand tenant needs will continue to succeed in leasing, maintaining high occupancy rates, and achieving good rental prices.

            Mr. Teerathorn Prabhanpong, head of the residential leasing department at CBRE Thailand, has been advising the owners of two new apartment projects on design and material selection for development, and has been appointed as the exclusive leasing agent.

            The first project is Piya Residence, located in Sukhumvit Soi 28 and 30, completed in Q1 2018. The project owner adjusted the layout and size of the units to optimize functionality and achieve the highest rental price per square meter, and currently, over 60% of the units are leased.

            The second project is Jhani Residence in Thonglor Soi 13, completed in 2017. This project was designed to meet the needs of Japanese tenants and currently has over 70% occupancy.

            Both projects primarily consist of 2 and 3-bedroom units, which are in high demand in the market, as most new condominiums available for rent are typically 1-bedroom units.

            Additionally, Mr. Teerathorn is advising on the latest apartment project, Jitiman Residence, in Thonglor Soi 16, expected to be completed and ready for occupancy in early 2019. This new apartment is 8 stories high and includes units ranging from 1 to 3 bedrooms, with a key feature being its low density and large garden, which sets it apart from other projects in the market where most apartment owners aim to maximize space utilization.

            One of the most important factors for successfully leasing apartments is developing projects that align with customer needs in terms of unit size, layout, materials, location, and amenities.

            “CBRE's ability to provide actionable advice to apartment owners comes from the real data the company has gathered from leasing to over 1,000 foreign tenants in the past three years, allowing us to understand what tenants truly want and what their budget is,” Mr. Teerathorn added.

            The rental housing market in central Bangkok will continue to be highly competitive, and both apartment and condominium owners need to consistently maintain and improve their units and common areas to make their properties attractive and appealing to tenants.

Thank you for the information from www.cbre.co.th