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2016 was an outstanding year for the Luxury condominium market with niche supply and matching demand from local and overseas investors. This trend continued at a leisurely pace in the first quarter of 2017, except for the fact that there was no significant new Luxury supply entering the market.

By Marciano Birjmohun 

Developers were competing strategically with their existing products and coping with a dynamic resale market. Following the mourning period after the passing of HM King RAMA IX – we respectfully withheld major marketing campaigns and project launches in Q4 2016 and Q1 2017 – regardless of foreign media speculations, the Kingdom unified in stability. This stability comforted developers and investors, with as result a positive market outlook for 2017.

Interesting fact about Luxury condominiums is that their marketing efforts are unique with far reach overseas. Foreign investors have been flocking the Luxury condominium market since 2014 getting attractive pre-sales prices from the top end developments. Today these units reached a significant capital gain of 30% mainly due the land value increase. Luxury condominiums were not only launched by Public Companies – a selection of the Luxury supply have been launched by fairly new players on the high end market. These new players kept momentum and created a visible presence on the Luxury condominium market. The banks of the Chao Praya river, low to mid Sukhumvit road and Sathorn remain concentrated area’s for Luxury supply – this due to connectivity, preferable neighborhood infrastructure and lifestyle amenities.

2017 recap; Entering the second half of 2017 – several Luxury condominiums reached completion and the official opening of 98 Wireless, Magnolias Racthadamri and the Ritz Carlton Residences Mahanakorn made world news. Three significant structures that influenced the Super Luxury sales market of Thailand forever, setting new benchmarks. The take up rate for 2017 Luxury condominiums remains healthy due to limited supply and level of quality – investors are particularly interested in Bangkok’s “Trophy Properties” the term refers to residences, architecturally or historically preserved properties that have extraordinary yields, with spectacular views, or other extraordinary amenities. Prices are being pushed up in particular for rare unit layouts such as Penthouses and Duplexes. The Penthouses at Wireless 98 and Mandarin Oriental Residences are a good example, reaching price points exceeding 650.000THB/sq.m. For those who think the Luxury market is driven solely by foreign investors, should think again. Affluent Thais remain an essential fuel in this engine.

Bangkok’s Luxury properties in correlation with their quality and amenities are of world class standards. By the last quarter of 2017 more developments will reach completion, a positive sign of prosperity.

Outlook 2018

2018 will be a challenging year for the Luxury Residential market, due to the fact that there is still supply available. Developers have chosen to re strategize and focus on overseas activities – simply because the uptake of overseas buyers have shown positive results in 2017 for all levels of the market. Majority of the overseas buyers will focus on Branded residences based on the following facts;

  • Assurance of quality in construction, design, service and amenities
  • “branding” a lifestyle orientated decision
  • Potential investment return from rental pool or hotel operation
  • Sense of secure investment
  • Innovation in terms of concept
  • The convenience of onsite services

Branded Residences are exclusive condominiums at are managed and serviced by luxury hotel operators. This combination results in a unique lifestyle concept, that offers the comforts of a five-star hotel and a residential status symbol. Residents of these luxury projects benefit from a unique set of facilities such as room service, a 24-hr concierge and indulgent luxury amenities, all this from the comfort and privacy of their home.

Prestigious hotel operators, are adding unparalleled exclusivity and prestige to the Branded Residences they operate. The international reputation of these hotels, also generate interest from international buyers looking for holiday-homes or turnkey investments. This is creating more opportunity and leverage premium sales prices of between 15-20%.

Read more  http://www.luxurysocietyasia.com/archives/category/luxury-living

 

 

About Marciano Birjmohun 

Marciano is Associate Director at Knight Frank Thailand (chartered) Co.,ltd – Residential Prime Sales, project market High-end branded residences on a global scale. A regular guest speaker at industry related events in the region. Marciano moderated the retail panel discussion at the first Property Report Congress Thailand 2016 and is member of the central panel of judges of the Thailand Property Awards.

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