By Somluck Srimalee
"At that time, we wanted to buy a condominium costing no more than Bt2 million in the existing central business districts, such as at the head of Sukhumvit Road, Silom, Sathorn or Ploenchit, but the properties there were too expensive. But the Rama IX-Ratchada area had similar facilities to the existing CBDs, and condo prices there were more than 50 per cent cheaper, which persuaded me to buy," she explained.
Tullaya Leangwattanahiran, 44, who has worked in an office on Rama IX for 12 years, said the facilities available on Rama IX-Ratchadaphisek roads had changed dramatically, and especially over the last five years.
From an urban area of Bangkok noted primarily for its night-life 12 years ago, Rama IX-Ratchada has effectively been transformed into a new CBD due to the number of new office buildings that have opened for business and the many condominium projects that have been launched in the last five years – with most of them now already completed.
"Before the area began to change, when we wanted to go shopping we had to go to Central Lat Phrao, but now we can shop at Central Rama IX. In the area, there is also a community mall, as well as other facilities to serve our lifestyle needs," she said.
"We decide to build our first head office, SET@93 Ratchada, on Ratchadapisek Road because of the location close to the MRT mass-transit system, which makes transportation easy, besides which this new central business district of Bangkok matches our policy of leading in sustainable building under the concept of energy saving and innovative building on the road," said Pannavadee Ladavalya Na Ayudhya, the Stock Exchange of Thailand’s (SET) senior vice president and group head for communication and administration.
Besides SET@93 Ratchada, other new office buildings have also opened along Ratchadaphisek Road.
One of the biggest is the Bt6-billion AIA Building, an office complex opened in the area in 2014.
Grand Canal Land is also developing Grand Rama 9, including the G Land Tower and a skyscraper tentatively called the "Super Tower", which will be a mixed-used project combining offices, retail and a six-star hotel.
The buildings have a combined floor space of 1.12 million square metres and entail an overall investment of more than Bt98 billion.
CP Land, which is owned by CP Group, also has a mixed-used project – Fortune Town – in the area, comprising a hotel, offices and shopping centre.
TCC Land, which is owned by beverage tycoon Charoen Sirivadhanabhakdi, also has an office building on Ratchadaphisek Road.
Risinee Sarikaputra, director and head of research and consultancy at Knight Frank (Chartered), described Ratchada-Rama IX as the new emerging area for office buildings in the capital.
Its Grade-A office buildings featured a higher rental price of up to Bt800 per square metre last year, which is expected to rise to Bt900 per square metre this year. The average rental rate was Bt750 per square metre towards the end of 2015.
This year, it is anticipated that there will be 195,245 square metres of new office space added to the supply, up to 147,150 square metres of which will be located outside the CBD, while just 48,095 square metres will be located within, the director said.
The latter will likely command average rents of Bt1,000 per square metre, she added.
With several office buildings opening for operations in the location, the challenge for property companies is to develop residential projects to support demand.
"My friend decided to move from her home on Wongsawang Road to Rama IX when the new condominiums launched in this location were priced below those in the existing CBDs by offering prices below Bt2 million per unit. The location is also near to her office," Tullaya added.
According to a survey by The Nation, a number of leading property developers – Pruksa Real Estate, Sansiri, Noble Development, AP (Thailand), Land & Houses, Ananda Development, Areeya Property and Supalai – have launched projects to support the new demand for housing close to people’s workplaces in the Ratchada-Rama IX-Asoke area since 2012.
These condominium projects are together worth more than Bt200 billion.
For example, Noble Development has launched the Bt2.8-billion Noble Revolve Ratchada 2, while Pruksa Real Estate has introduced the Condolette Midst Rama 9 condominium, worth up to Bt2 billion and comprising 433 units.
Pruksa’s project follows the successful launch two years ago of its Bt1.35-billion Ivy Ampio condominium, which has been sold out. Ivy Ampio units are being transferred to customers late this year and early next.
Supalai has introduced 10 condominiums together worth more than Bt10 billion on Ratchadaphisek Road since the beginning of last year. They will be completed this year.
Meanwhile, AP (Thailand) is launching four condominium projects on Ratchadaphisek – the Life @ Ratchada-Huatkhwang, Rhythm Ratchada, Rhythm Ratchada-Huatkhwang and Life Ratchadapisek –comprising 2,740 units.
Ananda Development is developing the Bt2-billion Ideo Mobi Rama IX, which will have 703 units.
LPN Development has also developed two condominium projects in the area – the Lumpini Park Rama IX and Lumpini Place Rama IX-Ratchada – worth about Bt4 billion combined and with a total of 2,705 units. The projects are now complete.
Underground a major draw
One of the main reasons the area from Ratchadaphisek to Rama IX junction is such a popular location for office property, as well as for residential projects, is its proximity to the MRT underground rail system.
The area also continues to have more freehold land available for the development of residential projects than areas such as Sukhumvit and Rama I, close to Siam Square, where space is limited and land prices are higher than those suitable for homes costing no more than Bt200,000 per square metre.
Jones Lang LaSalle (Thailand) managing director Suphin Meechuchep said this location had been attracting property firms since the MRT began operating in 1999.
And, when the SET decided to build its headquarters there three year ago, financial firms were challenged to expand into the area.
The area will likely be a thriving new CBD now that Sukhumvit, Sathorn and Silom have high density and limited land available for commercial and residential development, he said.
The area has been changed from a night-life location to one with the modern Central Rama IX shopping centre, Esplanade community mall, and modern office buildings under the ‘green’ concept, such as the AIA, SET@93 Ratchada and Super Tower, he added.
The boom in new condominiums and office buildings opening on this part of Ratchadaphisek Road has boosted the price of land in the area to an average of Bt800,000 per square wah (Bt200,000 per square metre), up 33 per cent from the 2011 level.