The Bangkok serviced apartment market continued to show signs of recovery in Q1 2011. Overall rental rates and occupancy were up from the previous quarter. Central Lumpini and central CBD saw particularly strong gains after being negatively impacted by events in 2010. However, significant new supply is expected over the course of 2011, which could put pressure on rates. The Japanese earthquake may have short term impacts but is also expected to increase longer term Japanese investment in Thailand.

1. Q1 2011 | SERVICED APARTMENT
ThAilAnd
Bangkok Serviced apartment
market
Bangkok Serviced Apartment Market
execuTive SummARy
the serviced apartment sector continued to show further signs of recovery from the lows of Q2
2010. overall rental rates and occupancy were up q/q.
it appears that the lingering effects of the april/may events of 2010 which directly impacted areas
seems to be dissipating rapidly with central Lumpini and central cBd recording very positive
figures for Q1 2011.
mARkeT indicATORS However this is no time for complacency as the sector faces another significant infusion of supply
over the course of the year that will put pressure on the gains made over the past six months.
Q4 2010/Q1 2011
the earthquake and tsunami in Japan may have a small short term negative influence, however
new Supply
in the longer term expected increased Japanese investment into thailand will also positively
RenTAlS affect the serviced apartment sector.
OccupAncy
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2. BANgkok SERVICED APARTMENT MARkET REPoRT | Q1 2011
hiSTORicAl Supply
hiSTORicAl Supply by yeAR
Source: colliers international thailand research
in 2010 around 540 units were supplied to the market. over the course will come online by the end of 2011 including the centre point at the new
of the previous decade the main surges occurred in odd years rather terminal 21 complex with 500 units. total supply of serviced apartment
than even and this year is no exception. even though no new serviced units as of the end of 2011 is expected to be approximately 18,200.
apartments began operation in Q1 2011 it is expected that around 1,770
Supply by lOcATiOn And gRAde, Q1 2011
Source: colliers international thailand research
the distribution of serviced apartments differs according to location, large Japanese community there. early Sukhumvit is the king of grade B
based on the particular profile of each area. central Lumpini contains apartments, as it is a more unpretentious, relaxed location, which also
many large embassies and is therefore seen as being the most prestigious explains the location of more Upper Scale rather than Luxury hotels. the
location to live in and as such contains more grade a units. Late ‘other’ areas contain more grade c products, due to their distance from
Sukhumvit 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
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3. BANgkok SERVICED APARTMENT MARkET REPoRT | Q1 2011
expecTed FuTuRe Supply in 2011
Source: colliers international thailand research
more than 1,700 units are scheduled to be completed in 2011. despite 470 units in Late Sukhumvit area. the main driver is not only the
this robust addition to supply to the market the highly competitive market popularity of this road as a residential destination but also that the
conditions are leading to some projects being postponed, especially in relative price of land is lower than the more central locations and it is
the Sukhumvit area. also convenient for the BtS line.
Sukhumvit road will host the vast majority of new supply this year. more
than 620 units will be located in early Sukhumvit area and approximately
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4. BANgkok SERVICED APARTMENT MARkET REPoRT | Q1 2011
hiSTORicAl OccupAncy RATe
OccupAncy FOR bAngkOk SeRviced ApARTmenTS On bOTh exTended STAy And cORpORATe hOuSing Sub-SeTS
Source: colliers international thailand research
average occupancy rates in Q2 tumbled due to the april and may although Q4 2010 produced mixed fortunes, the first quarter of 2011
protests, mainly as a result of short-term guests cancelling. the was very encouraging for both grade a and B segments on the back of
corporate housing subset also suffered with many expats, especially improved figures for tourism.
Japanese, leaving thailand temporarily to escape from perceived danger.
OccupAncy RATeS by lOcATiOn
Source: colliers international thailand research
the positive news for Q1 2011 relates to robust recovery in the areas residing in these locations but these worries have clearly been abated.
directly affected by the protests in april/may 2010, that is central cBd However in all zones occupancy recorded rise q/q and Late Sukhumvit
and central Lumpini. this is important as there were concerns that continued to be the star performer, topping 80%.
continuing occasional peaceful protests may still deter people from
COLLIERS INTERNATIONAL | P. 4

5. BANgkok SERVICED APARTMENT MARkET REPoRT | Q1 2011
demAnd dRiveRS
numbeR OF expATRiATeS in bAngkOk, Q1 2011
Source: office of Foreign Workers administration (Work permit), department of employment of
the ministry of Labor and colliers international thailand research
remark: above information does not include Lao, Burmese and cambodian citizens
the number of expatriates in Bangkok still continues its upward trend 2009 and below 2008 prior to the global Financial crisis (gFc).the total
following the nadir in Q2 2010. However the number is still similar to number of expatriates in Bangkok in Q1 2011 shows a modest rise q/q.
pROpORTiOn OF expATRiATeS in bAngkOk, Q1 2011
Source: office of Foreign Workers administration (Work permit), department of employment of the ministry of Labour and
colliers international thailand research
the Japanese still represent the largest group of expatriates in Bangkok are often in the lower pay bracket and the rental rates of serviced
and are also the main target group for serviced apartments, with most apartments would be beyond reach.
staying along Sukhumvit road and its numerous sois. other nationalities
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6. BANgkok SERVICED APARTMENT MARkET REPoRT | Q1 2011
RenTAl RATe
RenTAl RATe FOR One bedROOm uniTS by lOcATiOn, 2010–2011 by QuARTeR
Source: colliers international thailand research
rentals rates continued their slight assent in Q1 2011 except the Southern all bunched in the high 50,000 baht per month level. although Late
Fringe which more or less flatlined and central cBd which recorded Sukhumvit is further out many high end newer branded apartments have
another quarter of strong growth and has now reached the 100,000 baht appeared in the past few years raising the average rental price and the
per month barrier. the other key markets for high end serviced area is particularly popular with Japanese corporate housing residents.
apartments, namely early and Late Sukhumvit and central Lumpini, are
RenTAl RATe OF gRAde A And b by ROOm Type, Q1 2011
Source: colliers international thailand research
the average rental rate of grade a unit is greater than grade B by approximately 2 – 8%, depending on room type.
COLLIERS INTERNATIONAL | P. 6

7. BANgkok SERVICED APARTMENT MARkET REPoRT | Q1 2011
SwOT AnAlySiS
STRengThS overseas and this could be of benefit to thailand. the Japanese provide
the mainstay for the corporate housing segment of the market and
the serviced apartment sector in Bangkok is very strong in terms of
further growth in expats living in Bangkok will directly benefit the
branding and overall quality of accommodation and facilities. most of the
serviced apartment sector.
top international brands have a presence and local names also provide a
powerful underpinning for the market.
the sector competes strongly with hotels for the long stay market as
well as corporate accommodation for expats, especially Japanese.
a number of clusters of serviced apartments exist in various parts of the
city and disruptions in one area mean that the other locations are able to
provide back up accommodation. most of the chains have apartments in
these various locations. this was evident during the april/may events in
2010 and Late Sukhumvit benefitted as a result.
companies are continuing to consider the use of serviced apartments
instead of hotels for their travelling employees as the use of kitchen
facilities and more homely, informal atmosphere appeal to the jaded
business traveler. they also remain cheaper and provide more room
thus providing greater flexibility for use as a temporary office, for
example.
weAkneSSeS
Significant new supply in the sector could lead to pricing pressures in
the future as serviced apartments compete in a harsher competitive
environment.
reliance on the Japanese market for the corporate housing subset
makes the sector vulnerable to any large scale disruption involving
Japan. the recent earthquake and fears of a direct hit on tokyo sometime
in the future have highlighted such concerns.
OppORTuniTieS
the development of trade within aSean and between aSean and large
economies such as india and china could spell a boom both in the
corporate hosing and long stay sectors. many expats like to stay is
serviced apartments in the initial period of their stay before moving to
lower cost apartments for lease.
Limited new supply of expatriate high end apartment for lease buildings
means that serviced apartments can continue to compete successfully in
the corporate housing sector.
ThReATS
a resumption of disturbances in the centre around the election period
could cause the fragile recovery in occupancy to fall again in those areas
likely to be affected such as Lumpini.
increasing cost pressures are causing companies to scale down the
accommodation provided to their expat staff thus threatening the higher
end apartments.
the earthquake and tsunami in Japan is likely to lead to a drop in the
number of arrivals from that country in the short term. However it is
expected that more industrial activity will eventually shift from Japan top
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8. BANgkok SERVICED APARTMENT MARkET REPoRT | Q1 2011
Appendix
COLLIERS INTERNATIONAL | P. 8

9. BANgkok SERVICED APARTMENT MARkET REPoRT | Q1 2011
gRAding
no recognized standard for rating serviced apartments exists in thailand gRAde b
and therefore colliers international thailand has classified them based Usually located in the centre but also in less prime locations. Furnished
on various criteria, ofwhich a summary is given below. to a high standard but usually offers recreational facilities and a variety
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
exceptionally high standard. offering recreational facilities and amenities gRAde c
similar to a Luxury or Upper Scale hotel. managed by a top international Located in secondary locations. Furnished to a comfortable, but not
branded operator or comparable local brand. luxurious, standard. Fewer provisions of facilities and amenities, similar
to that of a mid-scale or economy hotel.
ZOning • Late Sukhumvit Area
this is the section of Sukhumvit road between Soi 37 and Soi 77 to the
the serviced apartment area can be divided into five areas or pockets of
north and Soi 24 and Soi 50 to the south.
concentration:
• Southern Fringe Area
• Central CBD
this is the area that stretches along the bank of the chao phraya river
this is the area that encompasses Silom, Sathorn, Surawong, Si phraya
on charoenkrung road. narathiwas ratchanakarin road and rama iii
and rama 4 road, as well as other sois in between, such as Soi
road are located in this area.
Saladaeng, Soi convent, Soi pipat.
• Other Areas
• Central Lumpini Area
most of the remaining grade B & c serviced apartments are scattered
the central Lumpini covers the areas along rama i, rajadamri, Wireless,
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.
• Early Sukhumvit Area
this is the section of Sukhumvit road between Soi 1 and Soi 35 to the
north and Soi 2 and Soi 24 to the south.
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10. BANgkok SERVICED APARTMENT MARkET REPoRT | Q1 2011
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