New research from Colliers International Thailand shows that the market for serviced apartments is like to see limited growth in 2015 as they face intense competition from condominiums as well as luxury apartments. Occupancy and rental rates for serviced apartments in Bangkok have remained steady throughout the year, the report added.
There are 154 serviced apartments scheduled to come onto the market this quarter and only 304 units have been added to the supply this year in Bangkok. Nearly 52 percent of all serviced apartments in Thailand are located near Bangkok’s Sukhumvit Road with a majority of serviced apartments currently being built also in this area; however, in the past developers have become less focused on the CBD area.
One reason they became less focused on serviced apartments is due to rising land prices in the CBD. The higher prices often made service apartments less profitable than luxury apartments or traditional condominiums. The report stated potential occupants have also seen these as an alternative to serviced apartments due to them having the same facilities and lower rental rates.
Expats working in Thailand are the primary residents in most serviced apartments with Japanese expats being the largest market for them. While the number of foreigners working in Bangkok has increased every quarter of 2015, this has not translated to higher growth in the serviced apartment market, which has been limited this year.
The reported also noted that there only a few international serviced apartment brands operating in Thailand and Bangkok at the moment. Ascott is one brand that plans on entering the market in the near future. It will introduce Fraser by Modena at the FYI Center as well as a number of other serviced apartment projects in the country’s Eastern Seaboard. There are also several other serviced apartment brands looking to enter the market in the next couple of years, according to research from Colliers Thailand.
Image: Fraser by Modena at the FYI Center is one of only a few international serviced apartment brands operating in Thailand and Bangkok at the moment.
