With its fast-rising popularity, land values along Sathon Road have grown by leaps and bounds, benefitting from a number of new, largescale luxury projects which have sprung up in the area. Projects with a combined value of more than 100 billion baht are slated for launch, driving prices well beyond market valuations and creating a popular haven for well-heeled white-collar customers.
One of Thailand’s more remarkable business districts, Sathon sits amid a fast-paced neighbourhood that has driven up land values. From late 1977 to 1987, the average price for an 8-rai plot on Sathon Road was around 125,000 baht per sq. wah. In 2017, the 8-rai Australian embassy property went for 1.45 million baht per sq. wah, pushing Sathon into the pricey real estate category highly favoured by property developers. Sathon-area projects are not limited to office buildings. Investment possibilities also include luxury condominiums and mixed-use projects.
The more than 100 billion baht in pending property projects that have made Sathorn an urban prestige district include One Bangkok, the largest privately held property development project owned TCC Assets (Thailand) Co Ltd; and Frasers Centerpoint Limited (FCL), which will transform 104-rai plot opposite Lumphini Park into a 20-billion baht mixed-use project and new city landmark; TCC Assets’ The PARQ, a 20 billion baht project located on 35 rai on Rama IV Road; and a 36.7 billion baht mixed-use project on 23 rai at the Silom Road intersection owned by Central Pattana Public Company Limited and Dusit Thani Public Company Limited.
Real estate consulting agency CBRE Thailand asserts that the potential for Bangkok’s inner-city area remains high, and is a popular area for property developments, including hotels, office buildings, shopping malls, hospitals, and schools. Fuelling the trend, land prices tend to steadily rise as the supply of freehold-leased land suitable for the development diminishes, while accommodation rates also rise with time.
According to CBRE Thailand Managing Director Aliwassa Pathnadabutr, "If urban planning regulations are not changed and the size of planned-permission land remains the same, land prices in CBD areas are likely to increase steadily in parallel with the economic cycle.”
Meanwhile, the survey department at Colliers International Thailand reported that property investment in Sathon district experienced an upturn in Q3-4 of 2017, after dropping earlier in the year, with adjusted value now at over 1.5 million baht per sq. wah.
The number of new condominiums launched in Sathon is lower than other CBD areas and Sukhumvit due to the sky-high prices as well as the fact that much of the available land lies further away from mass transit stations. From 2003 to the present, some 8,000 condominium units have gone on the market along Sathon Road.
The lowest price for the sold-out projects ranged between 100,000 to 150,000 baht per sq. metre, while most development projects priced between 150,000 and 200,000 baht per sq. metre required more than 5 years to fully sell out. Meanwhile, condominiums launched in 2017 that were priced over 200,000 baht per sq. metre quickly attracted new buyers, particularly those seeking the luxury projects priced over 250,000 baht. This trend is expected to continue as available land in the CBD becomes more scarce.
This reflects the positive growth in demand in the area which has resulted in over 550 new units collectively worth over 10 billion baht being slated for launch later this year.
The growth of condominium developments in Sathon/CBD district is relevant to the Nexus Property index which indicates that the increase in CBD condominium values has reached the maximum 6%, or 223,000 baht/sq. metre, while overall condominium market price increases have averaged 5%, or 137,100 baht/sq. metre, followed by surrounding inner-city areas priced 110,000 baht/sq. metre, and outer-city areas priced 75,000 baht/sq. metre, through Q2 2018.
With such figures, Sathon’s performance forecast is seen as comparable to major metropolitan markets around the world such as New York and Tokyo, where second-hand condominiums are increasingly popular as new projects easily sell out. Other influencing factors include an expected future rise in demand for second-hand condominiums; the tendency for condominium purchasers to seek a larger space and lower prices than newly launched units, and the effect of new workplace locations expanding into inner-city areas.
