Plus Property keeps eye on 70 billion baht luxury condo in Asoke-Phrom Phong

01 Nov, 2016

Plus Property, the full-service professional property and facility management agency, reported that a real estate survey in Bangkok from 2012 to 2015 showed that the average total value of the market was at 140,000 million baht, with 50% of this value concentrated in the Asoke-Phrom Phong area, which is strategically located along BTS and MRT routes, has a high population density of 80-90%, and is the center of business, commerce, shopping and important academic institutions. It is expected that real estate prices in the area will increase continually, with the average local condominium price expected to reach 260,000 baht per square meter in 2017. Properties that are ready for transfer are in high demand as property owners and investors would like to buy before prices edge up next year. 

Mr. Poomipak Julmanichoti, Managing Director of Plus Property Company Limited, the full-service professional property and facility management agency, said that a survey of high-rise condominiums in Bangkok that were sold from 2012 to 2015 found that there were 51 new projects, comprised of 24,883 units, in 2015, with total value of 214,931 million baht. From 2012 to 2015, the average project value was 142,535 million baht. Meanwhile, the Asoke-Phrom Phong area had 18 new high-rise condominiums, comprised of 5,556 units, in 2012, with total value of 71,799 million baht, or about 50% of the average total value of new condominiums in Bangkok each year.   

Major property developers are competing for real estate to develop new projects in the area, as luxury condominiums in city center have sold very well in the past 3-4 years. The market continues to perform well to the present despite some small drops in sales, which did not affect overall sales volumes. In addition, the purchasing power of high-end customers has not been affected by the sluggish economy. The supply of condominiums in the Asoke-Phrom Phong increased by 956 units, or 18%, from 2015 to 2016, contributing to total supply of 5,329 units. This is a reduction in growth when compared to the previous year, as land available for development of new projects has become more difficult to find. There were 4,200 units sold in the third quarter of 2016, an increase of 10% from the previous year, contributing to average sales volume of 78%. Meanwhile, available supply from the fourth quarter of 2016 to the second quarter of 2017 will only be 470 units, which is a very small amount when compared with other city zones. 

In 2016, there will be 3 new properties ready for transfer, including The XXXIX and Edge Sukhumvit 23, both by Sansiri, and Lumpini 24 by LPN Development, comprising a total of 1,056 units worth 8,600 million baht. Other projects that will be completed in 2017, 2018 and 2019 will add 278, 2,801 and 1,421 units, respectively, with value of 13,000 million baht, 29,758 million baht, and 20,441 million baht respectively. When comparing all properties in the Asoke-Phrom Phong area, it was found that Edge Sukhumvit 23 and Ashton Asoke were unique properties when compared to other projects as they are both located at the intersections of BTS and MRT routes, and are the first two projects in many years to be located near Asoke Interchange. Edge Sukhumvit 23 will be completed this year (2016), while Ashton Asoke will be completed in 2018. Real estate prices at the properties’ locations increase every year, with average increases of 9-10% for new projects each year. Therefore, properties that are ready to be transferred this year will be about 30% cheaper than new properties, resulting in great interest among property owners and investors. Moreover, the resale value of transfer-ready properties has not increased significantly, allowing for investment opportunities. However, it is expected that condominium prices in the Asoke-Phrom Phong area will increase to 260,000 baht per square meter in 2017. 

“Despite the Asoke-Phrom Phong area being only 2.5 square kilometers in size, the area has potential in several areas, including transportation, with interchanges between the BTS and MRT, which can attract both Thai and expat residents. There are also more than 900,000 square meters of office space, shopping centers and leading academic institutions, including Srinakharinwirot University Prasarnmit Campus, and Wattana Wittaya Academy. Occupancy rates at properties managed by Plus Property in the area are at 80-90%, which is considered a high density in Bangkok. The area also hosts a large rental market, contributing to high demand for condominiums, both for tenants and investors. The rate of return for renting out property is 5%. However, one factor that has to be watched is the market reaction to new properties that are being sold and awaiting transfer next year and in subsequent years. The level of interest in these properties will show the level of growth that can be expected from luxury properties in the future. Regardless, it is clear that transfer-ready properties have bustling resale value this year due to the price advantage they have over new properties,” Poomipak said.