Sponsored by  Hampton Suites Rayong

          Year after year, when the Gross Provincial Product (GPP) is revealed, an index reflecting the wealth and economic potential of each province in the country, the name ‘Rayong’ consistently ranks first for 15 consecutive years. What makes ‘Rayong’ such a strong economic province for this long? Terra Research presents insights in this article.

15 Years of GPP and GPP Per Capita Reflecting Rayong's Wealth

          From 2004 to 2020, over 15 years, Rayong's GPP has grown at an average rate of 7.7% per year, according to the Rayong Provincial Economic and Financial Condition Report. In 2019 (the latest year), Rayong's GPP reached 993,978 million baht, ranking second in the country after Chonburi province (Chonburi's GPP is 1,059,797 million baht). The top three sectors contributing the highest value include the industrial sector at 797,837 million baht, the manufacturing sector at 452,299 million baht, and the mining and quarrying sector at 272,907 million baht, reflecting the province's economic wealth well.

          Meanwhile, the GPP per capita in Rayong from 2004 to 2019 grew at an average rate of 4.3% per year. In 2019, Rayong had the highest GPP per capita in the country at 988,748 baht per person per year, maintaining its position as the province with the highest GPP per capita for 15 consecutive years.

          In terms of average income, in 2019, the average household income in Rayong was 24,229 baht. Over the past 15 years, from 2004 to 2019, household income has grown at an average rate of 8.72% per year.

 

Rayong: The Country's Industrial Hub with Quality Demand

          There’s no need for much introduction as Rayong being the number one industrial city in the country is guaranteed by its high GPP and GPP per capita rankings over the years. The industrial value of Rayong accounts for 15.17% of the national industry.

          As a province firmly established in the industrial sector, it hosts several major industrial estates, including Map Ta Phut Industrial Estate, WHA Rayong 36 Industrial Estate, WHA Eastern Seaboard Industrial Estate, Mukdahan Industrial Estate, Asia Industrial Estate, Eastern Seaboard Industrial Estate, and Amata City Industrial Estate, among others.

          These leading industrial estates in Rayong host 2,927 factories with a total capital value of approximately 834,600 million baht and about 187,600 employees across various large industries and multinational companies, including manufacturing, metal products, vehicle manufacturing, plastics, chemicals, and more. This results in a workforce predominantly comprising production engineers, environmental scientists, technicians, and skilled workers.

          Terra Research conducted a survey of job vacancies in Rayong's industrial estates, finding 200 positions available. The starting salary for general positions ranges from 8,500 to 15,000 baht per month, while general staff (Officer) earn around 18,000 to 25,000 baht per month, and senior staff (Supervisor) earn between 30,000 to 50,000 baht per month. Common positions include engineers, technicians, purchasing, marketing, sales, programmers, production management, logistics, and translators for Japanese, Korean, and Chinese, with salaries comparable to those in Bangkok.

           However, for leading companies in the petrochemical and chemical, electrical and power generation, and automotive parts manufacturing industries, such as PTT Global Chemical, PTT Asahi, PTT Phemol, TPE, or SCG, personnel can earn an average salary of up to 58,000 baht per month, along with a housing allowance of about 15-30% of their base salary, or approximately 8,000-20,000 baht per month.

          As for the number of foreigners in Rayong, according to the statistics of foreign workers authorized to work nationwide as of June 2021, the Department of Employment found that the number of foreign personnel in Rayong under Section 59 (general type), mostly working as managers, teachers, and executives, is 1,559. Under Section 62 (business promotion type), mostly in managerial, technical, and executive positions, there are 2,775 people, with the top three nationalities being Japanese, Chinese, and Korean. This makes Rayong the province with the second-highest number of foreign workers in the eastern region, after Chonburi. This foreign workforce is another quality demand in the condominium and housing rental market in Rayong.

 

Rayong: A Wealthy and Beautiful City with Tourism Potential

          Rayong is not only a significant strategic point economically in the industrial sector but also excels in tourism, making it a province that can be likened to a young woman who possesses both wealth and beauty.

 

       Being a coastal city with several popular islands, Rayong's beaches have become a travel destination for both Thai and foreign tourists. From 2015 to 2019, the number of visitors to Rayong grew at an average rate of 5.10%. In 2019, Rayong welcomed a total of 7.87 million visitors, comprising 7.31 million Thais and 566,780 foreigners, generating tourism revenue of 37,081 million baht. However, in 2020, due to the COVID-19 pandemic, tourism figures in Rayong decreased, similar to other areas in Thailand, with a total of 3.12 million visitors, including 3 million Thais and 121,594 foreigners, resulting in a drop in tourism revenue to 12,563 million baht.

          Tourist behavior in Rayong, according to the tourism situation statistics from 2010 to 2019 by the Ministry of Tourism and Sports, shows that Thai tourists typically stay for 2-3 days, spending about 1,680.64 baht per person per day. In contrast, foreign tourists tend to stay longer, usually for 3-4 days, spending approximately 1,781.12 baht per person per day. The occupancy rate in Rayong is 69.91%, with a total of 4,303,480 guests, including 3,949,238 Thais and 354,242 foreigners, primarily choosing to stay in hotels, resorts, and apartments.

 

The Condominium Market in Rayong

          Over the past 10 years, the condominium situation in Rayong has seen a continuous supply of new projects. In 2013, there was a significant influx of supply as both small and large developers expanded their investments into provincial markets, with Rayong being one of the provinces recognized for its potential. Between 2012 and 2014, the average launch price was 44,000-47,000 baht per square meter, gradually increasing to 80,000 baht per square meter today. The launch price of new projects has grown at an average rate of 10% per year. Due to its status as an industrial city with numerous industrial estates and job opportunities, the demand for housing in this area continues to rise, with nearly 900 new condominium units entering the market in 2021.

        The second-hand condominium market in Rayong offers attractive rental yields, comparable to major economic cities like Bangkok, with rental yields reaching 6%-8% per year. According to surveys of rental rates in Rayong, the rental prices range from approximately 4,500 to 15,000 baht per month (170-420 baht/sq.m./month), depending on the size and location of the unit. The most popular rental unit types are one-bedroom apartments ranging from 23-45 square meters, with rental prices starting from 6,000 to 11,000 baht per month, yielding an average rental yield of 6%-9% per year. This return is quite high, comparable to the Silom-Sathorn area. Following this, studio apartments can be rented for 4,500-6,000 baht per month, yielding 5%-7.5% per year. Two-bedroom units have rental rates starting from 7,700 to 15,000 baht per month, yielding 4.5%-7% per year, which is comparable to the Asoke area in Bangkok.

        Areas that yield good returns are those in the city center of Rayong, close to Map Ta Phut Industrial Estate, as well as condominium projects located along main roads, which are convenient for tenants commuting to industrial estates. Most tenants are high-level employees from various industrial estates, primarily from Map Ta Phut Industrial Estate, including companies like SCG, PTT, etc. Additionally, there are expatriates working in the estates, for whom companies often rent condominiums for their accommodation. Tourists are not the main customer group renting condominiums, as they tend to rent houses for family stays.

         Given that Rayong is an economic driver and a hub for numerous leading Thai and foreign industries, it is clear that the purchasing power of these individuals is quite high, including executives and high-level employees, both Thai and foreign. They often seek high-end housing with both short-term and long-term services. Service apartments are therefore another option for these individuals. The supply of service apartments in this area includes both economy and main class segments, with rental prices comparable to condominiums. However, there are only a few upper-class segments in this area. Considering the high demand potential currently and in the future, the upper-class market still has room for growth and opportunities.

         The rental rates for service apartments are similar to hotel rates, with Standard rooms sized 28-45 sq.m. renting for 29,000-35,000 baht per month, Superior rooms sized 28-70 sq.m. renting for 33,000-44,000 baht per month, one-bedroom apartments sized 30-120 sq.m. renting from 27,000-65,000 baht per month, and two-bedroom apartments sized 70-120 sq.m. renting from 40,000-66,000 baht per month. The rental returns for upper-class service apartments in Rayong are quite high.

          Given the investment potential in the condominium and service apartment markets in Rayong, many may see opportunities for rental investment as the rental yields for condominiums are high, comparable to locations in Bangkok, along with the serviced apartment market that presents attractive investment opportunities. Additionally, Rayong is not far from Bangkok, making property management relatively convenient and easy, and it also serves as a way to diversify investment risks from Bangkok to other provinces. Furthermore, if not rented out, properties can be kept as vacation homes.

          Recently, Rayong is set to launch new condominiums in the form of Service Residences, which offer living spaces with hotel-standard services and management, including tenant finding by a professional asset management team. Coupled with the potential of the location, “Rayong” being a major industrial city in the country, an economic area with substantial financial flow, it is a source of jobs and numerous leading companies that attract high-potential demand from both Thai and foreign executives and high-level employees, ensuring a strong demand for housing.

“Service Residences in Rayong” is therefore one of the markets worth investing in.