Soaring land prices along main roads lead to era of super luxury

Super luxury has no real definition. Some may associate it with hotel branding, although we don’t believe this is always necessary. More often, it is defined by its premium pricing, but truly to achieve super-luxury status, the product must also match up. 

With prime main-road land prices in Rajdamri, Sukhumvit and early Sathorn achieving in excess of Bt1 million per square wah (Bt250,000 per square metre) and set to rise further, residential developers have no choice but to launch projects at a new price benchmark of over Bt200,000 per square metre to ensure financial feasibility. Looking back at each price barrier of Bt100,000, Bt200,000 and Bt300,000 per square metre, which seemed impossible to achieve in the past, these barriers today have all been broken. 

Developing in a prime CBD location today will almost always dictate the product to be defined as super-luxury because of the price tag attached to it. The super-luxury market is exclusively for the affluent and cash-rich. It is a niche that is affordable to only a small segment of the market, so supply will be finite, dictated by both demand and limited availability of suitable development sites. 

Some may perceive this level of pricing as unrealistic and unattainable, but the market has proved this wrong and has shown solid evidence of buyers preparing to pay the hefty prices. However, no one would be prepared to pay this price if the product were not developed in line with it. 

Developers must pay particular attention to customers’ wants and needs. From our daily experience in dealing with purchasers and investors, we recognise that there are always unfilled gaps in the market and needs that are unanswered by products offered by developers. 

The quality of product offered in the Bangkok market has improved over time and is on par with international standards. However, to achieve the premium worthy of the super-luxury status, more attention to detail is required in delivering the right product, from unit sizing and functionality to a room-by-room detailed design process. 

In launching a project, not enough time and effort are typically spent on product development in a rush to launch the project, and minor details are often overlooked.

In terms of unit sizing, a super-luxury development is likely to offer a range of sizes to meet various needs such as large units for own-use as a primary home or smaller units for a second home or investment. 

While it may not be difficult to define the unit sizing and mix, often not enough attention is paid to space allocation among the components – from the living room, bedrooms to bathrooms – and determining what functionalities are essential. 

The developer must weigh the importance of each function and design feature to achieve the optimal balance within the defined sizing.

Many developers underestimate the difficulties and importance of getting it right. Even such components as the kitchen, storage space and bathrooms deserve equal attention as the master bedroom and living area. 

The room-by-room detail should be treated as if you were building and customising your own house, where the owner would pay attention to every minor detail. 

For example, in designing a wardrobe, equal importance should be placed on its functionality and internal compartments as its design and finishing. 

Designing a bathroom does not only involve choosing a sanitary-ware brand but also deciding whether a bathtub is essential and where the ideal locations for bathroom shelves are in the shower and sink areas and deciding where the safe box should be in the bedroom. 

The premium pricing for super luxury is not the issue, but the product must also achieve perfection to the extent that it can be done. 

The bottom line is that both developers and purchasers should not be scared away by the new price benchmark and the emergence of the super luxury segment so long as the product delivered is desirable and meets the market’s needs for what it’s worth.