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Apartment Rental Bangkok – 2009 Outlook

By on Jan 30, 2009 in Research, Residential

Outlook

The total number of expatriates in Bangkok grew y-o-y to November 2008, but this growth will slow as many manufacturing companies have announced significant reductions in production for 2009. Additionally, all types of businesses have tightened spending, which in some cases includes reductions in employee salaries and other benefits, such as rental allowances. Given these conditions, we expect demand for expatriate apartments to weaken during 2009.

We expect the market for Grade A apartments, especially new Grade A completions, to be more severely affected than that for Grade B. As many employees have concerns over future employment and income, they are likely to renegotiate better terms with their current landlords at the end of their lease terms or move into less expensive accommodation. New Grade A developments will have to offer discounts or other incentives in order to attract new tenants.

Recommendations & Advice

Landlords need to consider whether now is the time to consider refurbishment and improvement to apartments in order to remain competitive. Most newly arrived expatriates are looking for a more modern décor or a newer building. We recommend that landlords renovate their units in order to achieve the best possible rentals.

CB Richard Ellis provides strategic advice on refurbishment and new development plans.

If you wish to review the full report in detail (Apartment Rental/Leasing Q4)

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