A shortage of land and the new supply of high-end condos on the banks of the Chao Phraya River has driven luxury residential prices to rise by 80% on average from 2014-18, says property consultant JLL Thailand.
JLL managing director Suphin Mechuchep said prices of riverside condos in the luxury and ultra-luxury segment rose to 250,000-300,000 baht per square meter from at least 140,000 baht five years ago.
“To develop a riverside condo project, plots should be large as a setback from the river is required,” she said. “There are rarely large riverfront plots available for new property development on Charoen Krung Road.”
The Bangkok Metropolitan Regulation said for building control, a new building within 45 meters of a river bank must not be higher than 16m.
With land for new condo development scarce and no new condo supply launched last year, the sales rate of riverside condo projects under construction was 80% on average.
Completed projects had sales rates of 95%, she said, and buyers in this segment were those buying for both to live in and as an investment. Some want a riverside unit to build their investment profile.
JLL research found the outstanding number of luxury and ultra-luxury condos in Bangkok totals around 17,200 units, merely 3% of the total condo supply in Bangkok.
Of 17,200 units, 15% or about 2,600 units were on the banks of the Chao Phraya River, said Mrs Suphin.
She said riverfront land shortage has also made the average price of riverside condos in the luxury segment 15% higher than condos in the central business district (CBD).
In the ultra-luxury segment, the average price of riverside condo supply was 5-6% higher than in the CBD.
The riverside condo supply on Charoen Krung and Charoen Nakhon roads comes from six projects, of which half are hotel-branded residences.
Mandarin Oriental at Iconsiam and Banyan Tree are on haroen Nakhon Road and Four Seasons is on Charoen Krung Road, with a current selling price of between 300,000-350,000 baht per sqm.
Menam Residences on Charoen Krung Road is worth 4 billion baht and has 294 units.
The project has 26 units worth a combined 785 million baht or only 5% available for sale. It aims to close sales by the end of the year.
Daecha Tangsin, chief executive of the project’s developer Menam Residences Co, said over 90% of sold units were bought by Thais and the other 10% were bought by Chinese.
“Foreign buyers’ behavior in the high-end segment has changed since four years ago. They are shifting to riverside projects from the Sukhumvit area,” he said.
Mr Daecha, who also owns the over-30-year-old Ramada Plaza Menam Riverside Bangkok Hotel, located next to Menam Residences, has seen a change in the behavior of tourists who preferred Bangkok’s riverside area.
“These tourists changed from cultural tourism 30 years ago to shopping after open-air night market Asiatique The Riverfront pioneered the riverfront market,” he said.
Asiatique neighbors his hotel that attracts a large number of Chinese tourist arrivals.
His hotel, with an average room rate of 3,000 baht per night, are expected to see occupancy this year to rise to over 90% from 87% last year.
In the first quarter this year, occupancy was 95%, up from 90% in the same period last year, he added.
Mr Daecha said the company has a six-rai riverfront plot next to the hotel available for development, in which it plans to invest 4 billion baht to develop a 250-room hotel and a convention hall next year.