Mr. Phanom Kanjanathiemthao, Managing Director of Knight Frank Thailand Co., Ltd., revealed that the Rama 9, Ramkamhaeng, Praditmanutham (Ekamai – Ramintra) and Srinakarin area is considered to be the new location with potential for home office development. This is due to the area’s proximity to downtown as well as the business districts of Ratchada, Rama 9, Thonglor and Sukhumvit. It is also close to the Airport Link Metro train station, Motorway, Chalongrat Expressway and Si Rat Expressway. In addition, the location allows easy access to shopping malls such as The Nine Rama and The Mall Ramkhamhaeng; leading hospitals like Samitivej Srinakarin Hospital and Ramkhamhaeng Hospital; and key educational institutions, including Assumption University, Kasembundit University, Ramkhamhaeng University, Stamford International University and Triam Udom Suksa Pattanakarn School.
Moreover, there are up to 3 train lines being developed that would augment the area’s offerings; these lines include the Yellow Line Ladprao-Samrong (expected to be completed and opened in 2020), Light Red Line Bangsue-Huamark (expected to be completed and opened in 2020) and Orange Line Talingchan-Minburi (expected to be completed and opened in 2023.
As for the supply of home offices in the Rama 9 – Ramkhamhaeng – Praditmanutham – Srinakarin area, from 2011 until the end of February 2018, there was a total cumulative supply of 1,461 units; the greatest number of units entered the market in 2014, with 512 new home office developments offered by both large and small scale players in the market. Since then, the new supply from 2015 to 2017 remained steady with an average of 215 units per year. The first two months of 2018 saw only 8 units of new supply coming on-board in the area. It is worth noting that, in 2014, over 60% of the supply was located in the Ramkhamhaeng – Praditmanutham area. We expect that this was attributed to the fact that, two years ago, operators received information about plans for the development of the Orange Line.
Figure 1: Accumulated Supply of Home Offices in Rama 9 – Ramkamhaeng – Praditmanutham – Srinakarin
Source : Knight Frank Thailand
Figure 2: Accumulated Supply of Home Offices in Rama 9 – Ramkamhaeng – Praditmanutham – Srinakarin from 2011 to February 2018, by Area
Source : Knight Frank Thailand
At any rate, when delving into the specifics of the prime level of the home office supply, which are priced at 20 million baht per unit, it was found that there are only 149 such units launched from 2011 to February 2018, and 47% of the total new supply is located in the Rama 9 area, while 42% and 11% are in Ramkamhaeng – Praditmanutham and Srinakarin, respectively. The prime home offices are all situated in areas with high potential that afford seamless connectivity to various points of the city; they are also surrounded by facilities and amenities. The living spaces range from 450 to 1,140 sq.m. on land plots that vary in size from 39 to 120 talang wah per unit, with an average width of 6 to 11 metres. Most the units offer an elevator, garden and parking for up to 6 cars.
Figure 3: Prime Level Home Office Supply, Priced at 20 Million and Up per Unit, Rama 9 – Ramkamhaeng – Praditmanutham – Srinakarin from 2011 to February 2018
Source : Knight Frank Thailand
As for demand, home offices for sale in Rama 9 – Ramkhamhaeng – Praditmanutham – Srinakarin have been well received by buyers. Projects launched from 2013 to February 2018 currently enjoy an average sales rate of around 80% while projects launched from 2011 to 2012 have sold out. New projects launched in 2017 have an average sales rate of around 70% and the market trend indicates more clearly that home office properties are increasing, catering to target customers who want a small office for themselves in an area near the central business districts with amenities that afford comfort and convenience.
Figure 4: Average Demand, End of February 2018, for Home Offices in Rama 9 – Ramkamhaeng – Praditmanutham – Srinakarin Launched from 2011 to February 2018, by Area
Source : Knight Frank Thailand
Table 1: Average Starting Prices of Home Offices in Rama 9 – Ramkamhaeng – Srinakarin, by Year of Launch (Baht/Sq.m.)
Source : Knight Frank Thailand
The average starting price of home offices launched 2018 in the area is about 50,300 baht per sq.m. Projects located in Rama 9 have an average starting price of around 67,500 baht per sq.m., while projects situated in Ramkamhaeng and Srinakarin have an average starting price of approximately 34,600 baht and 49,000 baht per sq.m., respectively. For prime-level units launched in 2017 that are priced from 20 million baht and up, the average starting price is 63,300 baht per sq.m.
Figure 5: Rents and Occupancy Rates for Offices in Rama 9 – Ratchadapisek (New Buildings under 10 Years in Age Only)
Source : Knight Frank Thailand
When analysing the market, including offices for rent in the same area (buildings under 10 years in age), it was found that rental rates increased at an average of 6% per year, which continues to rise every year. Owning a home office is thus a very attractive alternative for independent operators as it reduces the cost of leasing office space as well as effectively controls costs over the long run.
