CBRE: Bangkok condo yields remain dependable

Despite renewed concerns about the state of the global economy and the euro-zone debt crisis, Bangkok residential yields remain firm with gross yield average at 5.9%, says property consulting firm CB Richard Ellis.

Over the last six quarters, downtown Bangkok condominiums have consistently provided an average yield within a narrow band of 5% to 6%. Smaller one-bedroom units have tended to achieve higher yields in excess of 6%, while larger four-bedroom units are lower at 3%.

However, this trend may change as the majority of new downtown condominium supply to be completed over the next two years will be one-bedroom units, meaning higher competition could lower yields.

With lower purchase prices, units in older condominium buildings mean investors can still achieve comparable yields to new buildings, even with a lower rent.

Investors need to understand tenant requirements before purchasing, in order to maximise the return on their investment.

Sukhumvit and Central Lumpini remain the most popular locations amongst expatriates. Tenants tend to prefer a modern and efficient design and landlords must ensure the interior decoration is neutral enough to appeal to a wide range of tastes.

“Rentals, prices and yields vary considerably in Bangkok even between buildings in similar locations. Performance is determined by the quality and attractiveness of individual buildings, the layout and the decoration individual units,” said James Pitchon, executive director at CBRE Thailand



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