Jury still out on condotels

A new trend emerging in the Bangkok property market is the condo-hotel, and while such developments are seen as sound investments, the jury is out on whether people want to live in a place that has a ful-time hotel atmosphere.


Among the entrants in the segment is T.C.C. Capital Land, which last week announced plans for a resort-style condotel, North Park Place, located at the Rajapruek Golf Course on Vibhavadi Rangsit Road. HKR Asia-Pacific International, a subsidiary of HKR International in Hong Kong which owns the five-star Sukhothai Hotel, earlier announced plans for a high-end condominium attached to the hotel. Rajadamri Residence, a subsidiary of Minor International Plc, has also announced the construction of St Regis Hotel and Residence on Rajadamri Road near the Minor-owned Four Seasons Hotel.

Ian Soo, the managing director Hamptons Property, believes condotels would likely be more successful in resorts than in the capital because the units would be mostly rented out to holidaymakers who stay there only briefly.

A certain type of individual might choose a condotel as a permanent residence but that person would have to accept some trade-offs, he said. "A lot of people, if they're living there long-term, want a more homely atmosphere; you see other families in the lobby rather than businesspeople."

In a hotel lobby one has strangers checking in and out all the time whereas in a more natural setting one's neighbour might say hello and there would probably be children playing within the compound, Mr Soo said, adding that a hotel atmosphere is not always relaxing.

Looking at the general direction of the Bangkok condominium market, Mr Soo and branch manager Kleber Medeiros say that prices are unlikely to move dramatically over the next few months, unless some developers experience trouble, which may cause a panic.

"From the seller's side, I think prices have reached a good point if they are looking to realise value from their units from selling, I think this is certainly not a bad time to sell, prices have increased a great deal," said Mr Soo.

"From the buyer's side, there are some good-value units in the market as well. There is more supply than demand, so it's a buyer's market and they can pick up some great units at good prices. We would tell them, don't hesitate if you can get a good deal."

It is important to remember, he said, that supply-demand dynamics have changed. A lot of people who have bought condos are now trying to rent out or sell them but the number of buyers has not increased at the same level. "So there is this increasing gap _ the number of people who want to buy and sell _ and this is what is putting pressure on prices."

In the current buyers' and tenants' market, Mr Soo says people must carefully monitor what the market is doing in terms of pricing. "If you price yourself out of the market _ you know landlords have these figures in their heads, looking at 12 months previously or two years previously _ there's no point doing that. You have to look at prices now, if you want a tenant, price sensibly."

Where opportunities for speculators and retail investors are concerned, Mr Soo said this depends on the specific unit but generally the opportunities are rarer now. "It's important to differentiate between investment and speculation. Investment is generally a longer-term view, there are certainly opportunities for investment in terms of good rental yield and so on. Outright speculation, I think, is much more difficult now simply because prices have come under pressure so it's not easy to buy something and just flip it a few months later."

Mr Medeiros says speculation was still possible if one buys a unit in a good building and in a good location but this market is not as good as it used to be.

Over the last two months Hamptons has sold good units at Sky Villa, AP Citismart and The Met in Sathon. For rentals, all the new grade A buildings including The Legend, Domus, The Lakes, AP Citismart and Sky Villa are popular.

Mr Medeiros pointed out that the Skytrain and subway continue to be key factors in the condo market. Bangkok's first Bus Rapid Transit, due to open next July and run from the Chong Nonsi BTS station along Narathiwat Ratchanakrin and Rama III roads and then across the river to Ratchaphruek, will not be as much of a factor in his view. The main reason, he says, is that foreigners continue to prefer living in the centre of the city with Sukhumvit being the most popular area along with the Sathon, Silom, Ratchadamri and Lang Suan areas.


Mr Soo noted that the new bus system will help if it operates as planned but it is unlikely to have an effect on local property values. "I don't think it will make a great deal of difference."

Both Hamptons executives doubt whether the riverside will really pick up as a major expat area, especially in Thon Buri, even once Skytrain access is available. The fact remains, says Mr Soo, that anyone with a car would continue to face heavy traffic problems.

"The traffic situation is much more exaggerated here than in London, where everybody would love to live by the river because you have 20 roads coming in and out, so it's no problem. But here it's actually a bottleneck disaster," he said.

Bangkokpost: by NINA SUEBSUKCHAROEN