The single-ownership expatriate standard apartment market in Bangkok is performing well despite competition from rental units in condominiums, according to CBRE, a leading property consultancy company.
The number of expatriates with work permits in Bangkok grew by 9.5% in the first quarter year-on-year to around 79,000, according to Labour Ministry figures.
Most expatriates prefer to live in certain areas, such as Sukhumvit, Lumpini and Sathon. They are only in Bangkok for two or three years so prefer to rent their residence.
The most popular choice is to rent an apartment or condominium because there are few houses or townhouses for rental in most expatriate areas. There is limited competition for serviced apartments, but only for studio and one-bedroom units rather than larger units.
There are about 11,000 expatriate standard apartments in the most popular areas and the current occupancy is over 90%. There are around 92,800 condo units in the most popular expatriate areas and CBRE estimates that about 30-40% of these are rented out by their owners. The occupancy rate for condos is 80%.
Tenants prefer to rent apartments rather than units from individual owners in a condominium because 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 while the building's property manager is only responsible for the maintenance of the common areas. 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 are well maintained and renovated and are in much better condition than many condominium buildings of the same age.
CBRE's research shows 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% of which will be one-bedroom units.
The prospects for apartments are good, especially for two- and three-bedroom units, because tenants prefer them to condo units and also few new two-, three- and four-bedroom apartment and condominium units are being built.
CBRE is the sole leasing agent for a brand-new 32-unit apartment development called The Philo Residence on Sukhumvit Soi 24. The building was completed at the beginning of this month and is already 90% leased.
"Location is not the only key to success. The unit layout, specifications, 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.
CBRE expects expatriate numbers will continue to grow.