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Prices Shoot Up in CBD Areas

By on Mar 14, 2012 in Property News

Published on The Nation dated 9 March 2012 by Somluck Srimalee

Limited land availability and access to mass-transit behind phenomenon

The prices of residences on Phloenchit and Chidlom on Wireless Road have risen sharply compared with other locations to more than Bt200,000 per square metre on average, due to limited availability of new land to develop residential buildings and also the transportation and facilities there that support the city lifestyle.

The Nation launched a survey early this week about the price of residences at Central Business Districts (CBDs) such as Sukhumvit, Sathorn, Silom, Rajdamri, Phloenchit and Chidlom.

The survey showed that condominium prices on Phloenchit and Chidlom on Wireless road were higher than other CBD locations with an average asking price of between Bt200,000 per square metre and Bt250,000 per square metre.

If the new luxury project by Sansiri under the fashion-condominium concept, designed by a global fashion designer, starts presales, condominium prices in this location may shoot up to nearly Bt300,000 per square metre. Sansiri bought the land for the project at a cost of Bt1.5 million per square wah.

Most of the upcoming condominium projects on Chidlom and Phloenchit are being developed as mixed-use projects that combine condominiums and commercial building, serviced apartments, and luxury hotel. The limited land availability will result in the development of high-rise buildings in this location.

Yutthachai Charanachitta, president and CEO of Amari Estates that manages Oriental Residence on Wireless Road, said that because of the limited number of new residential projects on Wireless Road the residential price in this location has increased by more than 20 per cent. For example, condominium price in Oriental Residence started at between Bt130,000 and Bt160,000 per square metre when the project was launched two years ago. But now, the project has succeeded in selling about 85 per cent of 193 units, and only 33 units are now available. The company has revised up its sale price to Bt230,000 per square metre, up 53.33 per cent, after the company added value to fully finished residences for sale.

Meanwhile, the resale price of condominiums at the same location such as the Address Chidlom now offer an average price between Bt120,000-Bt130,000 per square metre, up 18-20 per cent from the starting price of Bt102,000 per square metre three years ago.

Park Chidlom’s price has increased from between Bt95,000-Bt110,000 per square metre five years ago to a resale price of Bt140,000-Bt160,000 per square metre.

Resale price also rising

Others CBD locations such as Sukhumvit, Ratchada, Pathumwan, and Ladproud also show high demand with resale prices of residences increasing more than 10 per cent, according to a survey by Agency for Real Estate Affair.

The research said that the number of condominiums for sale in locations close to the CBDs and the mass-transit system in 2011 was 9,995 units, or 12 per cent of total 81,816 new residentials launched in 2011.

Following the high demand for residences in the CBD areas that are located near the mass-transit system – both Skytrain and underground train – the resale price of residential projects has been boosted and the number of new residential projects launched in these locations are rising when compared with two years ago.

For example, the price of a condominium in the CBD area averaged Bt68,896 per square metre on June 2004. That has now gone up to Bt98,817 per square metre as of February 2012, up an average four percentage points annually.

Meanwhile, the price on Sukhumvit has risen about 11 percentage points a year, from the average of Bt28,662 per square metre on June 2004 to Bt63,000 per square metre in February 2012. The residential price rose after work on the Skytrain extension to Sukhumvit 107 was completed. The location saw the sale of 2,387 condominium units in 2011.

Condominiums on Ratchadaphisek, Ladproud, Din Daeng, and Phya Thai also recorded average price increase of 10 percentage points a year, from about Bt37,466 per square metre on June 2004 to Bt75,600 per square metre on February 2012. Last year, residential projects with 3,156 units were launched at these locations.

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