Knight Frank Thailand unveiled that the super prime and prime condominium markets in Bangkok have recently commanded the spotlight. Accounting for less than 5% of the total Bangkok condominium supply, these condominium segments enjoyed relatively good sales due to great locations in the heart of Bangkok, which afford convenience for transportation, ease of access to facilities and amenities, and tranquil city surroundings. Meanwhile, selling prices of newly launched projects in these categories increased sharply due to the scarcity of land. Prices of super prime units jumped from THB 310,450 per square metre at the end of 2014 to THB 338,930 per square metre in 2015, whereas the selling price of prime condos increased from THB 237,988 per square metre in 2014 to THB 253,917 per square metre.
Mr. Frank Khan, Executive Director, Head of Residential, Knight Frank Thailand Co., Ltd. said Bangkok’s super prime and prime condominium segment will continue to attract purchasers with prime locations becoming rare, reflected in the high prices. He explains that super prime and prime condominiums for purchasers who purchase a unit as their second homes reflect their lifestyles and convenience of living. Super prime and prime condominiums offer the great location with fine dining, schools and hospitals located in that area. They have their own community. Some of the super prime condominiums provide world-class branded residence services, which make HNWIs’ life easier and also offer high-end facilities such as the right size of swimming pool and green areas.
Mr. Khan added that demand of super prime and prime condominium is mainly in the Sukhumvit area, near Thonglor BTS and Sois 37-39, Rajdamri, Langsuan, and Wireless. Mr. Khan expects that the new emerging area for super prime and prime condominium is in the riverside, such as Charoen Nakorn. Scarcity of land driving high prices will be reflected in the high price of the unit being sold.
According to Knight Frank Thailand Research, in 2015 alone, approximately 1,096 units were sold under the two categories. The accumulated sold rate of super prime and prime condominiums was 69.3% and 86%, respectively. The super prime accumulated sold rate at the end of 2015 at 69.3% was a slight increase from the first half of the year due to a small increase in supply (only 146 units launched) with a total of 602 units available for sale at the end of 2015. Prime condominium market, on the other hand, slowed down with the unit take-up within the period reducing to only 96 from the previous half year of 323 units. Despite that, the prime market still outperformed the overall Bangkok condominium market in this period, which exhibited greater effects of a market slowdown.
FIGURE 1: Super Prime and Prime Supply, Demand and Accumulated Sold Rate, 2008-2015
SUPER PRIME
PRIME
Source: Research and Consultancy Department, Knight Frank Thailand Co., Ltd.
Regarding supply, as of the end of 2015, there were 1,960 super prime units from a total of 10 projects. The Residences at Mandarin Oriental Bangkok located on the Riverside was the only super prime project launched within the period with 146 units, increasing the market supply share for the Riverside area, currently at 25% of the total super prime stock, from 18% during the first half of the year. Largely, the accumulated super prime supply is now almost evenly distributed within the choice Bangkok neighbourhoods of Sukhumvit, Sathorn, Central Lumpini and the Riverside.
As for the prime market, BEATNIQ on Sukhumvit Road was the only prime project launched within the same period, adding 197 units to the Bangkok prime condominium market, which currently stands at 2,548 units.
FIGURE 2: Super Prime and Prime Accumulated Supply, 2008-2015
Source: Research and Consultancy Department, Knight Frank Thailand Co., Ltd.
The average selling price per square metre of both super prime and prime markets continued to climb. At the end of 2015, the per square metre prices were THB 338,930 and THB 253,917 for super prime and prime condominiums, respectively. A more significant rise in price is observed in the super prime market with prices going up by 9.17% year-on-year whereas the prime market saw prices rise by 6.69% year-on-year.
What’s more, newly launched super prime and prime projects now started to offer furniture packages, which helped differentiate different unit types. Some designated units within the same building, which were sold at a premium of THB 25,000 to 85,000 of the per square metre selling price, received better flooring materials, built-in home automation, and better kitchen and sanitary equipment on top of what is being offered with the average units in the project. Some developers utilised this strategy to justify the selling price of up to THB 430,000 per square metre.
FIGURE 3: Super Prime and Prime Condominium Prices, 2008-2015
Source: Research and Consultancy Department, Knight Frank Thailand Co., Ltd.
Ms. Anchalee Kasemsukthawat, Director, Residential Department, Knight Frank Thailand Co., Ltd. said that prospective clients looking to buy super prime condominium units yearn for privilege and exceptional 24-hour world-class services on a par with 5-star hotels in addition to prime location, convenience and privacy. Thais account for approximately 65% of super prime condominium buyers, purchasing a super prime unit as their lifestyle product and as their second home that serves their exclusive lifestyle. Meanwhile, those who look for prime condos are meant to gain capital yields. Therefore, they would rather go for prime condominiums that match expatriates’ lifestyle; location and convenience are key factors among foreign tenants looking to rent a prime condominium.
Knight Frank Thailand Research added that the super prime and prime market is far from being over-supplied. These two markets would see a lower number of supply, but prices would still slowly climb. Many high-end developers are starting to put much more effort into product differentiation through material selection, all the way to more cutting edge designs and integration of extra facilities.
