Bangkok Serviced Apartment Market Report Q3 2011 w

Q3 2011 | SERVICED APARTMENT

THAILAND

BANGKOK SERVICED APARTMENT
MARKET

Bangkok Serviced Apartment Market
EXECUTIVE SUMMARY
Limited new supply added in Q3 but a surge expected for next quarter.

Small drop in overall rental rates but occupancy up.

MARKET INDICATORS

Q2 2011 / Q3 2011

NEW SUPPLY

RENTALS
HISTORICAL SUPPLY
OCCUPANCY
HISTORICAL SUPPLY BY YEAR

Source: Colliers International Thailand Research

Approximately 200 units have been completed and are in operation already out of the nearly 1,000
units that are scheduled to be completed in 2011. Sukhumvit road still is the most popular location
for serviced apartments, due to more than 70% of total units that are scheduled to be completed
in Q4 2011 will be located along this road. Total supply of serviced apartment units as of the end
of 2011 is expected to be approximately 17,860.

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BANGKOK SERVICED APARTMENT MARKET REPORT | Q3 2011

SUPPLY BY LOCATION, Q3 2011


large Japanese community there. Early Sukhumvit is the king of grade B
apartments, as it is a more unpretentious, relaxed location, which also
many large embassies and is therefore seen as being the most prestigious explains the location of more Upper Scale rather than Luxury hotels. The
location to live in and as such contains more grade A units. Late ‘Other’ areas contain more grade C products, due to their distance from
Sukhumvit also contains more grade A units, due to the existence of a the centre.
number of luxury branded apartments in Thong Lor Road, catering to the

CUMULATIVE FUTURE SUPPLY IN Q4 2011- 2012, BY LOCATION


More than 800 units are scheduled to be completed in Q4 2011. popularity of this road as a residential destination but also that the
Sukhumvit road will host the vast majority of new supply this year. More relative price of land is lower than the more central locations and it is
than 75% of the new units that are scheduled to be completed in 2011 also convenient for the BTS line. The addition of new retail centres such
are located on Sukhumvit road and nearly 80 units are also scheduled to as Terminal 21 will add to the appeal of this road to tourists and
be completed in 2012 in Sukhumvit. The main driver is not only the expatriates alike.

COLLIERS INTERNATIONAL | P. 2


HISTORICAL OCCUPANCY RATE BY GRADE, 2009 – 1011 BY QUARTER

OCCUPANCY RATE FOR BANGKOK SERVICED APARTMENTS ON BOTH EXTENDED STAY AND CORPORATE HOUSING SUB-SETS


An average occupancy rates in Q32011 increased from the previous However last year was a troubled one for the sector due to the political
quarter and compares favourably with the same quarter last year. upheavals.

OCCUPANCY RATES BY LOCATION, 2010 – 2011 BY QUARTER


The occupancy rate in every location increased from the previous approximately 9 – 11% which was due to a reduction in rental rates.
quarter, especially in Central CBD and Central Lumpini which increased



DEMAND DRIVERS

NUMBER OF EXPATRIATES IN BANGKOK, Q3 2011

The Ministry of Labor and Colliers International Thailand Research
Remark: Above information does not include Lao, Burmese and Cambodian citizens

The number of expatriates in Bangkok still continues its upward trend total number of expatriates in Bangkok in Q3 2011 shows a modest rise
following the nadir in Q2 2010. However the number is still similar to q/q.
2009 and below 2008 prior to the Global Financial Crisis (GFC). The

RENTAL RATE

RENTAL RATE FOR ONE BEDROOM UNITS BY LOCATION, 2010–2011 BY QUARTER


Rental rates in Q3 2011 are still similar to the previous quarter, only 5% although Central CBD still commands the highest rental rates.
Central CBD and Early Sukhumvit area decreased with a rate of around



AVERAGE RENTAL RATE 2010–2011 BY GRADE AND QUARTER


Average rental rate of Grade A serviced apartment dropped around Central CBD and Early Sukhumvit area. Rental rates of grade A serviced
2.24%, due to a decrease of the rental rate of serviced apartments in apartment is still higher than Grade B by more than 35%.



FORECAST

The growth in occupancy was partially fuelled by a small fall in rental

likely to lead to a weakening of the sector after bouncing back strongly
after Q2 2011. Although the political situation has stabilized in the short



APPENDIX



GRADING

No recognized standard for rating serviced apartments exists in Thailand GRADE B
Usually located in the centre but also in less prime locations. Furnished
on various criteria, of which a summary is given below.
of services similar to an Upper or Mid Scale hotel. Managed by a lower-
GRADE A end international or domestic operator.
Located in prime locations and luxury residential areas. Furnished to an
GRADE C
similar to a Luxury or Upper Scale hotel. Managed by a top international Located in secondary location and furnished to a comfortable, but not
branded operator or comparable local brand. luxurious, standard. Fewer provisions of facilities and amenities, similar
to that of a Mid-scale or Economy hotel.

ZONING
This is the section of Sukhumvit Road between Soi 37 and Soi 77 to the
north and Soi 24 and Soi 50 to the south.
concentration:

This is the area that stretches along the bank of the Chao Phraya River
This is the area that encompasses Silom, Sathorn, Surawong, Si Phraya
on Charoenkrung Road. Narathiwas Ratchanakarin Road and Rama III
and Rama 4 Road, as well as other sois in between, such as Soi
Road are located in this area.
Saladaeng, Soi Convent, Soi Pipat.

Most of the remaining Grade B & C serviced apartments are scattered
across the city, including Phayathai, Phetchaburi, Ratchadapisek,
Ploenchit, Langsuan, Phayathai and Phetchaburi Roads, as well as other
Mitmaitri, Srinakarin Bangna and Ramkhamhaeng Road.
sois in between, such as Soi Langsuan and Soi Ruamrudee.

This is the section of Sukhumvit Road between Soi 1 and Soi 35 to the
north and Soi 2 and Soi 24 to the south.



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