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Apartment supply & demand – Q4 2008

By on Jan 30, 2009 in Research, Residential

Supply

bangkokapartmentsupplyThe total supply of apartment units in downtown Bangkok stood at 10,866 as of Q4 2008, up from 10,677 (+1.9% q-o-q and +6.1% y-o-y) in the previous quarter.  The incremental supply during this quarter is from four newly completed projects in the Sukhumvit area.  These are The Residence, 14 Place, The Harmonized and L.Three Avenue, totaling 199 units.  All are located in Sukhumvit and are Grade B, with the exception of The Residence, an apartment project at Sukhumvit Soi 24.

Two-and three bedroom units account for the majority of total supply, representing over 70% of total apartment units in downtown Bangkok.
There are 906 apartment units in Bangkok currently under construction that may be completed within two years, based on our current projection.  The majority (over 80%) of future supply is concentrated in the Sukhumvit area.  Silom/Sathon is home to approximately 170 future units, while there is no supply under development in Riverside/Rama III or Central Lumpini at the moment.

Demand

bangkokapartmentdemandThe occupancy rate stood at 89.7% in Q4 2008, up by 1.8% q-o-q, but down 1.2% y-o-y.  The number of units taken up increased to 9,749 from 9,381 units in the previous quarter.

Silom/Sathon achieved the highest average occupancy rate in Q4 2008 at 92%, up 5.7% q-o-q and 0.2% y-o-y.  This was followed by Central Lumpini (91.4%, Riverside/Rama III (89.3%), and Sukhumvit 89.1% respectively.

The overall Grade A occupancy rate as of Q4 2008 was at 87.6%, down 0.7% q-o-q.  Central Lumpini occupancy remained the tightest, at 95.3%, while the other three areas ranged between 78-93% in this quarter.  For Grade B, the occupancy rate was 90.2% in Q4 2008, up 2.3% q-o-q.

We expect that Grade B units will see higher demand in 2009 as many expatriates remain concerned about future income levels, or have, in some cases, taken salary and rental allowance reductions.

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

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