CBRE sees strong market for expat apartments in Bangkok

The number of expatriates with work permits in Bangkok grew by 9.5 per cent year on year [when, 2014?] to around 79,000, according to statistics from the Labour Ministry.

Most expatriates only want to live in a limited number of areas, namely Sukhumvit, Lumpini and Sathorn. They generally stay in Bangkok for only two or three years and want to rent, not purchase.

The most popular choice is to rent an apartment or condominium because there are few houses or townhouses to rent in most expatriate areas. There is limited competition from serviced apartments, but only for studio and one-bedroom units, not larger ones.

There are about 11,000 expatriate standard apartments in the most popular areas and the current occupancy is over 90 per cent. There are around 92,800 condominiums in the same most popular expatriate areas and CBRE estimates that about 30-40 per cent of these units are owned by people who rent them out. The occupancy rate for condominiums is 80 per cent.

Tenants prefer to rent apartments rather than units from individual owners in a condominium because they know they can go directly to the building owner for repairs and requests.

In a condominium, the individual owner is responsible for the maintenance inside the unit and the building’s property manager is only responsible for the maintenance of the common areas, and this means it can be difficult for tenants to get owners to repair items quickly.

Although many of the apartment buildings are more than 20 years old, generally both the common areas and unit decoration have been well maintained and renovated and are in much better condition than many condominium buildings of the same age.

CBRE’s research shows that there are only 415 apartment units in single-ownership buildings under construction in the most popular expatriate locations, but there are 27,000 condominium units under construction in these areas, 63 per cent of which will be one-bedroom units.

The prospects for single-ownership apartments are good, especially for two- and three-bedroom units, because tenants prefer single-ownership buildings to condominiums and because few new two-, three- and four-bedroom apartment and condominium units are being built.

"Location is not the only key to success, the unit layout, specification, furniture and facilities along with the unit size are critical to achieving the best rents and keeping an apartment fully occupied," said Theerathorn Prapunpong, director of CBRE’s residential leasing services team.