Bangkok, January 14, 2018 – CBRE, a global real estate consultancy, reveals that despite the increasing competition in the rental apartment market for foreigners in Bangkok due to condominium owners renting out their units, the market for apartments in the city center still shows a positive trend. Most foreigners working in Bangkok prefer to rent rather than buy housing.

The rental market for foreigners is highly competitive, as the number of foreigners working in Bangkok has not significantly increased. The only nationality that has seen an increase is the Chinese, but generally, most Chinese have a lower rental budget compared to Japanese, American, and European tenants. This has led to a decrease in demand in the central Bangkok rental market.

According to CBRE, which has facilitated over 3,000 rental transactions in Bangkok over the past decade, the rental budgets of foreigners have not increased, with a median monthly rent of approximately 90,000 THB for three-bedroom units and 80,000 THB for two-bedroom units. This median is higher than the average rental prices in the overall rental market for foreigners due to CBRE's focus on the upper-tier tenant segment.

Most foreigners prefer to live in a few key areas, including Asoke and Thonglor on Sukhumvit Road, the Lumpini area, and parts of Sathorn.

For foreigners, the primary option is to rent apartments from individual owners who own entire buildings or from small investors who buy condominiums to rent them out.

According to a survey by CBRE's research department, there are only about 10,000 standard rental apartments available for foreigners in central Bangkok, while there are around 80,000 condominiums in the same area. CBRE estimates that 35-40% of these condominiums are owned by investors who buy units to rent out. In terms of supply, new apartments are limited, but the number of new condominiums continues to increase.

Many tenants, especially Japanese, prefer to rent apartments because they can deal directly with building managers, who are usually available to handle any issues related to building management or maintenance within the units. In contrast, condominium managers are only responsible for managing common areas and do not deal with maintenance inside the units.

“Although the number of foreign tenants and rental budgets have not increased, there are still opportunities for developers of apartment projects to achieve good returns, and competition will increase due to the rental of condominium units,” said Mr. Teerathorn Prabhanpong, head of residential leasing at CBRE Thailand, who has over 20 years of experience in the foreign rental market.

The key to successful rentals is not just location but also having appropriately sized units that maximize space utilization, as well as using high-quality materials, appliances, and attractive interior designs.

Recently, CBRE has been appointed as the sole leasing agent and property manager for Jitiman Residence, a newly completed apartment project located on Thonglor 16, opposite J Avenue. This project serves as a good example showing that apartments with a single owner can still compete with condominiums, offering various room sizes from 1 to 3 bedrooms, along with designs and materials that appeal to foreign tenants.

Looking ahead to 2019, Mr. Teerathorn does not expect a significant increase in the number of foreign tenants or their rental budgets, but quality apartment projects will continue to command high rents and maintain high occupancy rates.

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