Bangkok Rentals Increased in 2013, First in 20 Years

Bangkok Rentals Increased in 2013, First in 20 Years

Residential News » Asia Pacific Residential News Edition | By Francys Vallecillo | January 22, 2014 9:30 AM ET

Residential rentals in downtown Bangkok increased for the first time in 20 years in 2013, according to a report from CBRE Thailand. 

With sale prices increasing, the gross average rental yield, before any deductions -- i.e. common area management fees, maintenance, insurance -- was 5.3 percent in 2013.

One-bedroom units recorded the highest gross rental yield at 6.4 percent, followed by two-bedroom at 5.5 percent and three-bedroom units at 4.1 percent.

CBRE analyzed 176 rental transactions in 55 condominiums in Bangkok's three most popular expatriate rental areas -- Sukhumvit, Silom/Sathorn, and Lumpini. The Sukhumvit area (Sukhumvit Soi 1-63) was the most popular location for rentals, achieving the highest yields at 6.1 percent. 

According to the report, the age of condominium buildings does not have a significant impact on rental yields.
"If the building is in a good location and well maintained, good yields are possible despite the building's age," CBRE states. "Some older buildings have similar rental yields to newer buildings while the unit purchase price is as much as 30-40 percent lower than that of newer buildings." 

The downtown area is a favorite for foreigners, with the demographic representing 95 percent of the rental demand for luxury condos. 

The firm forecasts a decrease in rental rates for one-bedroom condos in Bangkok due to the amount of new supply. On the other hand, a limited supply of two- and three-bedroom units should increase rents and yields for the segment, CBRE reports. 

WPC News | Gross Rental Yields of Condominiums in Downtown Bangkok by Unit Type as of 2013

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