CBRE Thailand reveals that Bangkok's downtown residential rental market is primarily driven by expatriate tenants who choose apartments, rental units in a condominium or serviced apartments to live. 

Expatriate numbers are only growing at a slow rate says the agency, and there has been no increase in the average monthly budgets that these tenants are willing to spend on rent.

The increase in supply and limited growth in demand means that the market is competitive, but there are still opportunities for both apartment developers and buy-to-rent condominium investors.

CBRE indicate the key is to understand tenant requirements so that investors can maximise their occupancy and rent per square metre.

There is a constant turnover of expatriate tenants as the average length of stay in Thailand is about three years so each new incoming tenant makes a fresh decision about where they want to live.

The latest survey by CBRE Research in Q2 2018 shows that there are about 10,000 single-ownership multi-family apartment units in the most popular expatriate rental locations of Sukhumvit, Lumpini and Sathorn. There are around 76,000 condominiums in the same areas and CBRE Research estimates that about 25,000 - 30,000 of these are owned by investors who are renting out their units.

There is still a preference, especially from Japanese tenants, for single-ownership apartments rather than multi-ownership condominiums because they like the ability to talk to the owners’ representative about all aspects of maintenance. In a condominium, the property manager is only responsible for maintenance of the common areas and it is the individual owners’ responsibility to maintain the interior of the unit. 

In Bangkok, few condominium owners use a managing agent to look after their unit and deal with all tenant issues. A condominium tenant must directly contact the owner about all issues relating to the inside of the unit and the ability of an individual owner to quickly arrange maintenance or repairs is mixed depending on their experience and is especially challenging for overseas owners. 

Apartment developers who build in preferred locations and understand tenant requirements continue to be successful, achieving high occupancy and good rental rates.

Mr Theerathorn Prapunpong, Head of Advisory & Transaction Services - Residential Leasing at CBRE Thailand, has advised developers of two recent apartment projects on the design and specification of their developments and acted as the sole leasing agent.

• Piya Residence on Sukhumvit Soi 28 and 30 was completed in Q1 2018. The developer optimized the units’ layout and size to maximise the functionality and the rental per square metre. More than 60% of the units have been leased. 
• Chani Residence on Sukhumvit Thonglor Soi 13 was completed in 2017 and has been designed to match Japanese tenants’ requirements and is now more than 70% leased. 

Both these buildings have a mixture of mainly two and three-bedroom units for which there is still a high level of demand because many of the rental units in new condominiums are one-bedroom units.

One of the most important factors in determining the success of a rental apartment project is to match tenants’ requirements on size, layout, specification, location and facilities.

“CBRE’s ability to provide apartment developers with practical advice is due to our real market data based on over 1,000 expatriate tenant lettings over the last three years. Knowing what tenants want and how much they will spend,” added Prapunpong.

CBRE advises Bangkok's Central Business District residential rental market is going to continue to remain competitive and owners of existing apartment buildings and individual owners of condominiums need to maintain and renovate interiors and common areas to ensure their properties remain attractive to tenants.

For more information about Bangkok's rental market, phone or email Ngamjai Jearrajarat of CBRE Thailand via the contact details listed below.

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