Big developers enter campus condos market, eyeing rental-investment projects
Over the past three years, the condominium market has experienced a slowdown due to the impact of the Covid-19 crisis, with continuous decline in sales.
However, "campus condos" remain a growing segment, fuelled by the potential to generate passive income from rental properties, according to industry experts.
Big developers are now entering the fray, focusing on rental-investment projects.
Surachet Kongcheep, the CEO of Property DNA Co Ltd, said that “the trend of condominiums targeting students or ‘campus condos’ has been on the rise as major real estate players are showing interest in this market”.
“Companies like Asset Wise, Origin, Pruksa, and Sansiri have turned their attention towards this segment. Among the popular locations for campus condos, Rangsit in Pathum Thani province, where Thammasat University and Bangkok University are located, ranks first, followed by Kasetsart University. These locations cater to both student and working professional populations,” said Surachet.
Additionally, there are other popular areas near universities such as Mahidol University, Salaya Campus, Assumption University, Bangna Campus, and more.
Real estate developers see opportunities to cash in on a group of investors interested in purchasing units for rental purposes, including parents and students who intend to buy but later choose to rent or sell after graduation," Surachet said.
Rental income yields are reportedly over 6% per year in Rangsit. Investors who purchase multiple units can enjoy additional discounts, resulting in rental income returns of up to 8%. Rents range from 8,000 to 12,000 baht per month. Consistent demand has contributed to the continuous growth of campus condos in Rangsit.
This aligns with the concept of recurring income and the plans of Piya Prayong, chief executive officer, Pruksa Real Estate, who stated that they are currently exploring new investment models to generate steady income.
Pruksa aims to develop condo-township projects designed for rental purposes, similar to apartments.
They are initially planning to launch projects in the Rangsit and Kasetsart areas, with a target of 1,000 units, renting at 10,000 baht per month, which would offer a rental return of approximately 7%.
Meanwhile, Kromchet Vipanpong, the CEO of Asset Wise Co Ltd, stated that in the first quarter, Asset Wise had achieved total presales volume of 3.5 billion baht, a 227% quarter-on-quarter growth and a 6% year-on-year growth.
This growth can be attributed to the launch of three new condominium projects with a total value of 5.41 billion baht.
These projects include Campus Condo Rangsit, starting at 1.29 million baht for 514 units, totalling 780 million baht; Campus Town Island, starting at 1.49 million baht for 1,770 units, totalling 3.53 billion baht; and Atmoz Season Ladkrabang, starting at 1.29 million baht for 706 units, totalling 1.1 billion baht.