Colliers International Thailand Research Department are proud to present the Serviced Apartment Market Report for Bangkok.

1. Q2 2011 (half year) | SerVICeD aParTMeNT
ThAilAnd
Bangkok Serviced apartment
market
Bangkok Serviced Apartment Market
execuTive SummARy
no stand alone projects opened in H2 2011.
a serviced apartment component of a mixed used development is becoming more popular.
total supply estimated to be around 17,800 units at the end of 2011.
occupancy down around 1.8% from Q1 2011.
mARkeT indicATORS
rental rates remain stable in softened market conditions.
Q1 2011 / Q2 2011
Japanese investment could increase further following tsunami and this will lead to more expats
new Supply
thus fueling the corporate stay market.
RenTAlS
OccupAncy
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2. BaNgkok SerVICeD aParTMeNT MarkeT rePorT | Q2 2011 (half year)
hiSTORicAl Supply
hiSTORicAl Supply, AS Of Q2 2011
Source: colliers international thailand research
no new stand-alone serviced apartment project opened in the first half in march and 50% of this project, or around 122 units are for serviced
of the year although a number of units were added to two new hotels in apartments. all units will be available upon the grand opening of the
the centre. around 890 units are scheduled to be completed in the project in Q3 2011. total supply of serviced apartment units as of the end
second half of 2011. Jasmine resort Hotel opened a section of its project of 2011 is expected to be approximately 17,800 units.
Supply by lOcATiOn And yeAR, AS Of Q2 2011
Source: colliers international thailand research
early Sukhumvit is significantly higher than any other area with the current supply of other areas is still not over 3,200 units in each
approximately 3,500 – 5,700 units. Since 1992 onwards until the first location.
half of 2011, early Sukhumvit area has shown the highest share, while
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3. BaNgkok SerVICeD aParTMeNT MarkeT rePorT | Q2 2011 (half year)
cumulATive fuTuRe Supply by lOcATiOn And yeAR, AS Of Q2 2011
Source: colliers international thailand research
more than 1,000 units are scheduled to be completed in the second half as phetchaburi road, rama 9 road, Srinakarin road and Bangna road.
of 2011 and approximately 150 units in 2012. the total number of
serviced apartment units in Bangkok by the end of 2011 will be more a lot of hotel and condominium developers also convert some units in
than 17,800. over 300 units or 50% of future supply in 2011 will be their own project and change to serviced apartments; therefore many
located in the early Sukhumvit area. in the past, serviced apartments luxury hotels, upper scale hotels and some condominium projects in
focused on foreigners with most of them located in the city area along Bangkok have monthly rental packages similar to stand-alone serviced
BtS lines. However increasing land prices have meant that in the past apartments. this seems to be becoming a trend as developers seek to
few years developers are focusing more on outside of the city area, offer more options due to the softening hotel market.
especially new BtS extension lines and some locations to the east, such
hiSTORicAl OccupAncy RATe
OccupAncy fOR bAngkOk SeRviced ApARTmenTS On bOTh exTended STAy And cORpORATe hOuSing Sub-SeTS
Source: colliers international thailand research
average occupancy rate in Q2 dropped approximately 1.8% in both they still remain slightly lower than the numbers recorded in Q2 2009
grades q/q. compared to the previous Q2 in 2010 rates have rebound which was in the midst of the global Financial crisis.
strongly but that period was during the events in april and may. However
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4. BaNgkok SerVICeD aParTMeNT MarkeT rePorT | Q2 2011 (half year)
OccupAncy RATeS by lOcATiOn
Source: colliers international thailand research
the occupancy rate fell in four locations, while in the Southern Fringe negative affect, due to some cancelling their reservations or corporations
and “others” areas there was a small rise. these two areas, while often decreasing budgets. With Japan expected to bounce back strongly from
far from mass transit lines, serve the needs of business travelers and this event the effect is seen as temporary and in fact it is expected that
expats visiting or working in those particular locations as well as being more Japanese will invest in the future to diversify their production base
more affordable. and this will be an added spur for the corporate long term stay market.
the main customers for serviced apartments in the prime locations in
Bangkok are Japanese, so the tsunami in Japan in march had some
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5. BaNgkok SerVICeD aParTMeNT MarkeT rePorT | Q2 2011 (half year)
demAnd dRiveRS
numbeR Of expATRiATeS in bAngkOk, AS Of Q2 2011
Source: office of Foreign Workers administration (Work permit), department of employment of
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 remains similar to the first prior to the global Financial crisis. the total number of expatriates in
quarter. However the number is still similar to 2009 but still below 2008, Bangkok in Q2 2011 is approximately 54,100.
pROpORTiOn Of expATRiATeS in bAngkOk, AS Of Q2 2011
Source: office of Foreign Workers administration (Work permit), department of employment of the ministry of Labour and
colliers international thailand research
the Japanese still represent the largest group of expatriates in Bangkok apartments would be beyond reach. there has been a steady rise in the
and are also the main target group for serviced apartments, with most number of Japanese expats in thailand with just over 21,000 being
staying along Sukhumvit road and its numerous sois. other nationalities recorded in 2005 to a little over 24,000 as of Q2 2011.
are often in the lower pay bracket and the rental rates of serviced
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6. BaNgkok SerVICeD aParTMeNT MarkeT rePorT | Q2 2011 (half year)
RenTAl RATe
AveRAge RenTAl RATe fOR One bedROOm uniTS by lOcATiOn And gRAde, AS Of Q2 2011
Source: colliers international thailand research
rental rates of grade a serviced apartments in central cBd area are the rental rates of grade B serviced apartments in early Sukhumvit area are
highest due to the location, but not much different from the central higher due to it being popular for expats who work in Bangkok with easy
Lumpini area which is also considered a prime location. early Sukhumvit access to the BtS and lively entertainment scene.
area is similar to Late Sukhumvit as many high end apartments are
located in thong Lor. many branded serviced apartments are located in
these four locations.
AveRAge RenTAl RATe Of 1 bedROOm uniT duRing Q1 2010 – Q2 2011 by gRAde
Source: colliers international thailand research
rental rates remained stable for Q2 2011 with only a very slight fall being aftermath of a severe downturn many companies seek to reduce their
recorded in the grade B category. in a similar but lesser extend as hotels, costs to maximize profits and rentals for expatriate staff is one area that
serviced apartment rentals remain soft due to challenging conditions is susceptible to cutbacks.
that remain as a result of continued economic uncertainty. in the
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7. BaNgkok SerVICeD aParTMeNT MarkeT rePorT | Q2 2011 (half year)
AveRAge RenTAl RATe Of SeRviced ApARTmenT by bRAnded And nOn-bRAnded, AS Of Q2 2011
Source: colliers international thailand research
the average rental rate of international branded serviced apartments is living in various countries where that brand exists which can ensure
higher than non-branded by approximately 154%. although branded continuity and confidence. as a result many developers seek both well-
serviced apartments tend to be of a higher grade, there is likely to be a known thai and foreign serviced apartment brands.
‘brand effect’ that enables apartments to target expats travelling and
fORecAST
With developers seeking to hedge their bets more when it comes to
property in Bangkok, especially in the hospitality sector, a serviced
apartment component rather than a stand alone building is becoming
more prevalent today and this is a trend that looks set to grow. developers
of high-end condominiums throughout the country are seeking well
known brands to add prestige but also a greater potential for revenue
generation for units that can attract more buyers and increase selling
prices. Hotels are now beginning to embrace a serviced apartment
component that can bring a more solid if less lucrative income stream, in
what are increasingly turbulent times for the upper-scale and luxury
hotel industry.
Serviced apartments are the most ambiguous form of real estate in that
they can imitate hotels in the form of offering short term stays, the
apartment for lease sector is in direct competition for corporate long
term accommodation and now condominiums are offering a service
component as part of a branded residence concept within a strata title
building, even some units take on the function of offices in some cases.
this amorphous nature of the serviced apartment represents arguably
more of strength rather than a weakness as the future dynamic changes
occurring throughout asia require greater flexibility to respond and the
chameleon like nature of the serviced apartment sector seems most
appropriate to prosper from such changes.
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8. BaNgkok SerVICeD aParTMeNT MarkeT rePorT | Q2 2011 (half year)
Appendix
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9. BaNgkok SerVICeD aParTMeNT MarkeT rePorT | Q2 2011 (half year)
gRAding
no recognized standard for rating serviced apartments exists in thailand gRAde b
and therefore colliers international thailand has classified them based Usually located in the centre but also in less prime locations. Furnished
on various criteria, of which a summary is given below. to a high standard but usually offers recreational facilities and a variety
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
exceptionally high standard. offering recreational facilities and amenities 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 • Late Sukhumvit Area
this is the section of Sukhumvit road between Soi 37 and Soi 77 to the
the serviced apartment area can be divided into five areas or pockets of
north and Soi 24 and Soi 50 to the south.
concentration:
• Southern Fringe Area
• Central CBD
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.
• Other Areas
• Central Lumpini Area
most of the remaining grade B & c serviced apartments are scattered
the central Lumpini covers the areas along rama i, rajadamri, Wireless,
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.
• Early Sukhumvit Area
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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10. BaNgkok SerVICeD aParTMeNT MarkeT rePorT | Q2 2011 (half year)
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