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Bangkok Serviced Apartment Market Report Q3 2011 w


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Bangkok Serviced Apartment Market Report Q3 2011 w

  1. 1. Q3 2011 | SERVICED APARTMENTTHAILANDBANGKOK SERVICED APARTMENTMARKET Bangkok Serviced Apartment Market EXECUTIVE SUMMARY Limited new supply added in Q3 but a surge expected for next quarter. Small drop in overall rental rates but occupancy up. MARKET INDICATORS Q2 2011 / Q3 2011 NEW SUPPLY RENTALS HISTORICAL SUPPLY OCCUPANCY HISTORICAL SUPPLY BY YEAR Source: Colliers International Thailand Research Approximately 200 units have been completed and are in operation already out of the nearly 1,000 units that are scheduled to be completed in 2011. Sukhumvit road still is the most popular location for serviced apartments, due to more than 70% of total units that are scheduled to be completed in Q4 2011 will be located along this road. Total supply of serviced apartment units as of the end of 2011 is expected to be approximately 17,
  2. 2. BANGKOK SERVICED APARTMENT MARKET REPORT | Q3 2011 SUPPLY BY LOCATION, Q3 2011 Source: Colliers International Thailand Research large Japanese community there. Early Sukhumvit is the king of grade B apartments, as it is a more unpretentious, relaxed location, which alsomany large embassies and is therefore seen as being the most prestigious explains the location of more Upper Scale rather than Luxury hotels. Thelocation to live in and as such contains more grade A units. Late ‘Other’ areas contain more grade C products, due to their distance fromSukhumvit also contains more grade A units, due to the existence of a the centre.number of luxury branded apartments in Thong Lor Road, catering to the CUMULATIVE FUTURE SUPPLY IN Q4 2011- 2012, BY LOCATION Source: Colliers International Thailand ResearchMore than 800 units are scheduled to be completed in Q4 2011. popularity of this road as a residential destination but also that theSukhumvit road will host the vast majority of new supply this year. More relative price of land is lower than the more central locations and it isthan 75% of the new units that are scheduled to be completed in 2011 also convenient for the BTS line. The addition of new retail centres suchare located on Sukhumvit road and nearly 80 units are also scheduled to as Terminal 21 will add to the appeal of this road to tourists andbe completed in 2012 in Sukhumvit. The main driver is not only the expatriates alike.COLLIERS INTERNATIONAL | P. 2
  3. 3. BANGKOK SERVICED APARTMENT MARKET REPORT | Q3 2011HISTORICAL OCCUPANCY RATE BY GRADE, 2009 – 1011 BY QUARTER OCCUPANCY RATE FOR BANGKOK SERVICED APARTMENTS ON BOTH EXTENDED STAY AND CORPORATE HOUSING SUB-SETS Source: Colliers International Thailand ResearchAn average occupancy rates in Q32011 increased from the previous However last year was a troubled one for the sector due to the politicalquarter and compares favourably with the same quarter last year. upheavals. OCCUPANCY RATES BY LOCATION, 2010 – 2011 BY QUARTER Source: Colliers International Thailand ResearchThe occupancy rate in every location increased from the previous approximately 9 – 11% which was due to a reduction in rental rates.quarter, especially in Central CBD and Central Lumpini which increased COLLIERS INTERNATIONAL | P. 3
  4. 4. BANGKOK SERVICED APARTMENT MARKET REPORT | Q3 2011DEMAND DRIVERS NUMBER OF EXPATRIATES IN BANGKOK, Q3 2011 The Ministry of Labor and Colliers International Thailand Research Remark: Above information does not include Lao, Burmese and Cambodian citizensThe number of expatriates in Bangkok still continues its upward trend total number of expatriates in Bangkok in Q3 2011 shows a modest risefollowing the nadir in Q2 2010. However the number is still similar to q/q.2009 and below 2008 prior to the Global Financial Crisis (GFC). TheRENTAL RATE RENTAL RATE FOR ONE BEDROOM UNITS BY LOCATION, 2010–2011 BY QUARTER Source: Colliers International Thailand ResearchRental rates in Q3 2011 are still similar to the previous quarter, only 5% although Central CBD still commands the highest rental rates.Central CBD and Early Sukhumvit area decreased with a rate of aroundCOLLIERS INTERNATIONAL | P. 4
  5. 5. BANGKOK SERVICED APARTMENT MARKET REPORT | Q3 2011 AVERAGE RENTAL RATE 2010–2011 BY GRADE AND QUARTER Source: Colliers International Thailand ResearchAverage rental rate of Grade A serviced apartment dropped around Central CBD and Early Sukhumvit area. Rental rates of grade A serviced2.24%, due to a decrease of the rental rate of serviced apartments in apartment is still higher than Grade B by more than 35%. COLLIERS INTERNATIONAL | P. 5
  6. 6. BANGKOK SERVICED APARTMENT MARKET REPORT | Q3 2011FORECASTThe growth in occupancy was partially fuelled by a small fall in rentallikely to lead to a weakening of the sector after bouncing back stronglyafter Q2 2011. Although the political situation has stabilized in the shortCOLLIERS INTERNATIONAL | P. 6
  8. 8. BANGKOK SERVICED APARTMENT MARKET REPORT | Q3 2011GRADINGNo recognized standard for rating serviced apartments exists in Thailand GRADE B Usually located in the centre but also in less prime locations. Furnishedon various criteria, of which a summary is given below. of services similar to an Upper or Mid Scale hotel. Managed by a lower-GRADE A end international or domestic operator.Located in prime locations and luxury residential areas. Furnished to an GRADE Csimilar to a Luxury or Upper Scale hotel. Managed by a top international Located in secondary location and furnished to a comfortable, but notbranded operator or comparable local brand. luxurious, standard. Fewer provisions of facilities and amenities, similar to that of a Mid-scale or Economy hotel.ZONING This is the section of Sukhumvit Road between Soi 37 and Soi 77 to the north and Soi 24 and Soi 50 to the south.concentration: This is the area that stretches along the bank of the Chao Phraya RiverThis is the area that encompasses Silom, Sathorn, Surawong, Si Phraya on Charoenkrung Road. Narathiwas Ratchanakarin Road and Rama IIIand Rama 4 Road, as well as other sois in between, such as Soi Road are located in this area.Saladaeng, Soi Convent, Soi Pipat. Most of the remaining Grade B & C serviced apartments are scattered across the city, including Phayathai, Phetchaburi, Ratchadapisek,Ploenchit, Langsuan, Phayathai and Phetchaburi Roads, as well as other Mitmaitri, Srinakarin Bangna and Ramkhamhaeng Road.sois in between, such as Soi Langsuan and Soi Ruamrudee.This is the section of Sukhumvit Road between Soi 1 and Soi 35 to thenorth and Soi 2 and Soi 24 to the south.COLLIERS INTERNATIONAL | P. 8
  9. 9. BANGKOK SERVICED APARTMENT MARKET REPORT | Q3 2011 COLLIERS INTERNATIONAL THAILAND MANAGEMENT TEAM on 6 continents ADVISORY SERVICES | HOSPITALITY A leader in real estate consultancy worldwide Jean Marc Garret | Director PROJECT SALES & MARKETING 2nd largest property manager Monchai Orawongpaisan | Senior Manager 979 million square feet under management Over 12,500 professionals RESIDENTIAL SALES & LEASING Napaswan Chotephard | Manager OFFICE & INDUSTRIAL SERVICES COLLIERS INTERNATIONAL THAILAND: Narumon Rodsiravoraphat | Senior Manager 17/F Ploenchit Center, RETAIL SERVICES 2 Sukhumvit Road, Klongtoey, Bangkok 10110 Thailand TEL +662 656 7000 FAX +662 656 7111 ADVISORY SERVICES EMAIL Napatr Tienchutima | Associate Director REAL ESTATE MANAGEMENT SERVICES 519/4-5, Pattaya Second Road (Opposite Central Festival Bandid Chayintu | Associate Director Pattaya Beach), Nongprue, Banglamung, Chonburi 20150 TEL +6638 427 771 INVESTMENT SERVICES FAX +6638 427 772 Nukarn Suwatikul | Associate Director EMAIL 27/7, Petchakasem Road, Hua Hin, RESEARCH Prachuap Khiri Khan 77110 Thailand Tony Picon | Associate Director TEL +6632 530 177 Surachet Kongcheep | Senior Manager FAX +6632 530 677 EMAIL VALUATION & ADVISORY SERVICES Phachsanun Phormthananunta | Associate Director Santipong Kreemaha | Senior Manager PATTAYA OFFICE Mark Bowling | Senior Sales Manager Supannee Starojitski | Senior Business Development RESEARCHER: RESEARCHER: Thailand Thailand HUA HIN OFFICE Tony Picon Surachet Kongcheep Associate Director | Research Senior Manager | Research EMAIL EMAIL This report and other research materials may be found on our website at Questions related to information herein should be directed to the Research Department at the number indicated above. This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising Accelerating