Sky high potential spotted in Bearing

The condominium market in the Bearing area has potential for expansion and growth as it serves not only professionals working in the city but also those working in Samut Prakan, says property consultancy Knight Frank.

Managing director Phanom Kanjanathiemthao said the area benefits from the skytrain connecting to important business and commercial centres on Sukhumvit, Ploenchit and Silom roads as well as Siam Square.

This helps professionals reach their workplaces, while key shopping areas in Thong Lor and Siam are accessible in 15-25 minutes from Bearing station without having to change trains. The extension that will connect Samut Prakan to Bang Pu will provide people who work in the industrial areas in the latter there another transit option.

An important consideration for project development is the area’s low land costs. Prices are still relatively affordable, which keeps condo prices reasonable. Condo prices in the area are 1.5 to 3.5 million baht per unit.

At that price point, monthly instalments are around 10,000 baht, which meets the financial needs of office workers in the city centre.

The area is also already developed, with complete public utilities and services. There are also several commercial development projects in the vicinity such as Bitec exhibition hall, Bhiraj Tower office building and Bangkok Mall. The latter will be a mixed-use complex developed by The Mall, located at the intersection of BangnaTrat and Sukhumvit roads on over 100 rai, which encompasses a shopping mall, a hotel and serviced apartments. Construction is scheduled to begin in 2018.

Mr Phanom said the area also offers a relatively good return on investment, with low initial investment. Each unit cost is relatively affordable and rental yields fall between 5.5% and 6.5%, depending on the project. For low-rise condo projects, a onebedroom that is 28-30 square metres in size costs 2-2.3 million baht and the rental yield will be around 10,000-12,000 baht per month. For high-rise condo projects, units of the same size are priced between 2.5-2.8 million baht and rental yield will be approximately 13,000-15,000 baht per month.

Renters are both Thai and foreign, with significant numbers of Chinese and Koreans who work in factories in Samut Prakan.

Additionally, Bearing has several international schools such as St Andrews International School and Bangkok Patana International School.

According to research by Knight Frank Thailand on condominiums in the Bangna-Bearing-Samrong area, there was accumulated supply of 12,417 units from 2012 to the first half of 2017. There are 3,343 units available for sale, which reflects a sales rate of 73%. There has been steady growth since 2015, which marks the year with the most new supply at about 4,300 units.

“We believe the absorption rate in this area will continue. At the same time, for condos located around the Bearing skytrain area, at the end of the second quarter of 2017, there was a high sales rate of up to 83%. The accumulated supply was 6,430 units. At present, there are just 1,160 units available for sale — this reflects the highest sales rate in five years,” he said.

Knight Frank Thailand’s research also found that condominiums in the BangnaBearing-Samrong Stations, for the most part, are the low-risk type at 63% of the market (7,861 units). Meanwhile, highrise units comprise 4,556 units or 37% of the market.

“However, if we only look at the Bearing skytrain area, we find that high-rise condos only comprise 8% or 545 units; these are from the Knight Bridge and The Gallery Bearing projects. High-rise condos in this area also enjoy a 99% sales rate, with just a few units remaining as sales have been going on for 3-4 years already,” said Mr Phanom. “Research also revealed that condominiums in this area, on the whole, are located in Soi LaSalle or Sukhumvit Soi 105, followed by Bearing Soi 107, where it is not possible for high-rise buildings to be erected. The supply of high-rise condos in this area is limited, despite the high demand from renters and buyers who wish to occupy the units themselves. Highrise condos have better views; they are also easier to rent out as they have more amenities and common facilities.”

The average sales price of low-rise condominiums in the Bangna-Bearing-Samrong area is 70,000 baht per square metre.

For high-rise units in the area, the price is roughly 28% higher at 90,000 baht per square metre.

The price of high-rise condominiums on Sukhumvit Road commands up to 110,000 baht per square metre, which is 28% higher than high-rise condominiums in the Bangna-Bearing-Samrong area.