The growth rate of new serviced apartments in Bangkok has declined every year since 2009, and Colliers International expects that trend to continue into the future.
The real estate company, in its latest research report on the sector published this week, noted that the total supply of serviced apartments at the end of the third quarter of 2014 was approximately 18,280 units.
Average occupancy rates and rental rates of all locations in 3Q 2014 saw slight increases from the previous quarter, and these will continue to increase into the next quarter and until 2015, according to the firm.
Increasing land prices along existing BTS lines, especially in the inner city area, is the main factor affecting new serviced apartment project developments in the area due to lower returns.
Colliers noted that the total number of expatriates in Bangkok in 3Q 2014 was approximately 74,610, which increased from the previous quarter.
Looking forward, Colliers said: “Thailand’s economic situation has still not 100 per cent recovered, although the new government had settled fully during August.
“This situation is ascribed to the numerous factors that still affect the Thai’s confidence. Nevertheless, many foreign businessmen are still focusing more on Thailand than in other countries in the ASEAN for their investment base.”
Concluding the report, Colliers added: “Although the serviced apartment market in Bangkok has shown only a slight growth in the past few years, many positive factors will drive the market in 2014 and in the future.
“The AEC in 2015 and the opening of some countries in the ASEAN are the main drivers of demand for serviced apartments.”
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
