Political instability is the major factor affecting the confidence of foreign investors in Bangkok’s serviced spartment sector, according to new research from Colliers International.
In its Bangkok Serviced Apartment H2 2013 research report, published this week, the agency said that some serviced apartments in the city area of the Thai capital, especially the areas which are close to the protest areas are losing clients and unable to attract replacements.
The report said: “Although the serviced apartment market in Bangkok has shown only slight growth during the past few years, there are still many positive factors to drive the market in 2013 and the future.
“The increase in Foreign Direct Investment (FDI), the political stability during the past two to three years, and the opening of some countries in ASEAN are the main drivers of demand for serviced apartments.”
The agency also noted that in the past, serviced apartments focused on foreigners or expatriates in Bangkok, most of whom needed to stay in the City area or close to the mass transit system. Now, many foreigners and expatriates have decided to stay outside the CBD area, but still close to the BTS Sky Train system to take advantage of cheaper rents.
According to Colliers, many hotel and condominium developers have also converted some units in their own projects into serviced apartments; therefore, many luxury hotels, upscale hotels and some condominium projects in Bangkok have monthly rental packages similar to stand-alone serviced apartments.
“This is becoming a trend as developers offer more options due to the softening hotel market,” it noted.
Read the full report from Colliers here:
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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