As land prices continue to soar, developers are scrambling to find plots in the area to meet the demand for premium condominiums.
Despite soaring land prices, Thong Lor, one of Bangkok’s most sought-after residential locations, continues to attract new condominium supply with at least two new projects combined worth over 21 billion baht to be launched next year.
Both will be joint ventures between Thai and Japanese developers.
One of them will be a big project worth 15 billion baht from SET-listed developer Origin Property Plc and Japanese firm Nomura Real Estate Development.
Thongchai Busarapan, chief executive of Proud Residence Co, a subsidiary of Origin Property, says the company will develop the project with unit prices and sizes that the Thong Lor market lacks.
“Units will be at an affordable price, under 10 million baht, as the existing condo supply in the Thong Lor area today is priced higher than 15 million baht,” he says. “Land prices get higher and higher and so do condo prices.”
According to Plus Property, a property consultant subsidiary of SET-listed developer Sansiri Plc, land prices in the Thong Lor area reached 1.5 million baht per square wah, a rise of 50% in five years from 1 million baht per sq wah.
This drove average condo prices from 140,000 in 2012 to 253,000 baht per square meter this year, says Anukul Ratpitaksanti, managing director of Plus Property.
Due to a scarcity of land available for development, properties that started selling in 2016 were developed as high-end projects with an average price of 325,000 baht per sq m, compared with just 125,000 baht per sq m for projects launched in 2013.
For new high-rise condos, prices exploded by 159% within five years while resale prices grew by 80% during the same period, he says.
According to Ananda Development Plc, high-rise condo supply located within one kilometer of Thong Lor BTS station totaled 1,774 units since 2012. Of the amount, 75% have been sold.
Last year the average price was 247,000 baht per sq m and new supply prices average 310,000 baht per sq m, a rise of 12% per year from 147,000 baht and 145,000 baht in 2012, respectively.
Ananda forecasts the average and new condo price this year will be 271,000 baht and 340,000 baht, rising to 298,000 baht and 375,000 baht in 2018, respectively.
“In 2001-2002, condominium supply in the Thong Lor area was mainly one-bedroom units sized 70-80 sq m and priced 5 million baht. Today two- or three-bedroom units are developed and priced higher than 20 million baht,” says Mr Thongchai.
Origin’s project in the Thong Lor area will be located on a six-rai plot on Thong Lor Soi 10, which Origin earlier this month bought from Oishi founder Tan Passakornnatee at an undisclosed price.
Mr Thongchai, who made the land deal, says Mr Tan acquired this plot over 10 years ago at around 200,000 baht per sq wah.
In May 2017, a freehold plot sized 199 sq wah on Sukhumvit Soi 38 opposite Soi Thong Lor was offered at 328.35 million baht or 1.65 million baht per sq wah, but it has not been sold, says property consultant Colliers International Thailand.
Late last year SET-listed developer Singha Estate Plc bought a 2.5-rai land plot on Sukhumvit Road near Sukhumvit Soi 36 from Fragrant Property Co, reportedly at 1.75 million baht per sq wah.
According to property consultant Nexus Property Marketing Co, land prices in the Asok to Thong Lor area rose 19% per year during the past seven years while prices of new condo supply soared 9% annually.
Nexus managing director Nalinrat Chareonsuphong says the highest increase in land prices in this area was seen in upper Soi Thong Lor, rising 22% per year during 2011-17.
This was followed by major sois on Thong Lor Road and Sukhumvit Road from Asok to Thong Lor, with an increase of 20% each per year. Land prices will continue rising with an increase of at least 10% per year over the next two years, Mrs Nalinrat estimated.
Other projects scheduled to be launched in Thong Lor next year are Hyde Heritage Thonglor, worth 6 billion baht, a joint venture between SET-listed developer Property Perfect Plc and its subsidiary Grande Asset Hotels & Property Plc, as well as Japanese firm Sumitomo Forestry.
The project will be located on a 2.5-rai plot on Sukhumvit Road between Thong Lor and Ekamai BTS stations, some 350 m from Thong Lor BTS station, comprising a 45-storey building and a total of 300 units priced around 300,00 baht per sq m.
Aliwassa Pathnadabutr, managing director of property consultant CBRE Thailand, says Thong Lor is the most desirable location for both Thais and foreigners, especially Japanese expatriates.
“The location is a central hub that combines a modern lifestyle and exclusive services that best serve the needs of foreigners compared with other areas in Bangkok,” she says.