Bangkok’s dark green line mass transit extension from Mo Chit to Khu Khot via Saphan Mai is set to benefit real estate developers, according to a report from SCB’s Economic Intelligence Unit (EIC).
As well as facilitating transportation for those living near the route, the EIC reports that both real estate developers and retailers are not in an oversupply condition and have continuous growth prospects.
Currently, there are four operating mass transit routes in the Bangkok metropolitan area, and that number should increase to nine within the next 10 years. The next route that will be constructed is the dark green line extension from Mo Chit to Khu Khot via Saphan Mai.
This new route will bring more prosperity to the northern Phaholyothin area that has various community areas and government agencies. Currently, the project has received construction approval and is in the construction procurement stage.
This route is the extension from the existing dark green route that ends at Mo Chit. The extension will be built from Mo Chit towards the northern part of Bangkok, following the Phaholyothin road (Bang Khen – Sai Mai district) and ending at Khu Khot, Lam Luk Ka, Pathum Thani province.
The route distance is approximately 18 kilometers and will pass department stores, residential areas, universities, hospitals and Don Mueang airport, as well as various governmental agencies.
When the Mo Chit – Khu Khot mass transit route extension is in operation, people living in the Saphan Mai – Khu Khot and nearby areas will have more convenience when taking trips to the town centre.
Currently there are approximately 12 million people living in the mentioned area, 2.5 million of which are students.
The EIC views that if the people living in the mentioned area want to travel into the city centre via personal cars, it would take between two and three hours. However, if the same groups of people travel via the mentioned mass transit system from Khu Khot to Victory Monument station, it will take only 35 minutes with a THB50 fare.
Apart from travel, real estate activities will directly benefit from the mass transit route expansion.
There are still varying demands for single detached house, townhouse, and condominiums in the different areas. For example, in the Lam Luk Ka and Sai Mai area, properties that are in demand are single detached homes and townhouses, since people in the area are families who value privacy.
Between 2011-2013 there were 1,200 units of single detached houses launched ranging in price from THB3million to THB5million per unit.
Meanwhile, in the Saphan Mai and Ratchayothin area, properties in demand are condominiums, since people in the area are mostly university students and office workers. In the mentioned area there are three large universities; Kasetsart University, Sripatum University, and Krirk University, in addition to other educational institutions.
Between 2011-2013, there were 800 units launched of condominiums ranging from THB500,000 to THB2million per unit in Saphan Mai.
EIC views that real estate activities are not yet in the oversupply stage evident from ready to move in condominiums near the Ratchayothin, Sena 2, to the Kasetsart University area having occupancy rates at 78 percent, reflecting existing demand and lack of buy-sell-transfer issues.
However, property prices near the dark green route extension will significantly increase once the route is in operation. The EIC views that the price of new condominiums in the area will increase by between 25 percent and 45 percent since the start of the bidding process for the route.
During the bidding stage prices of new condominiums in the area should be at THB55,000 per sqm, while increasing to between THB60,000 and THB65,000 per sqm during the construction period, and THB70,000 to THB80,000 per sqm after the construction is complete.
The mentioned rates are similar to the price increments seen for properties near the green line (Bearing-Samut Prakarn). Note that the land price, which will be the cost for real estate developers, should also increase by between 10-15 percent after the dark green route extension is in operation, according to the EIC.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email email@example.com