Mass transit expansion and renewed developer activity in Bangkok’s core CBD are reshaping the city’s property landscape.
Since its initial launch almost 20 years ago, Bangkok’s mass transit system has been one of the most significant catalysts for development activity. Now, almost 200km of new lines is under construction, with 110km currently complete.
Chris Hobden, associate director at Savills Thailand, says: “The new transit lines opening between now and 2024 will have two major effects on the city’s real estate market. Firstly, new residential developments will spring up alongside planned public transport routes.
“Secondly, the completion of Mass Rapid Transit (MRT) Blue Line, slated to commence operations by 2020, will place the core Silom/Sathorn CBD in a more central location within the mass transit map.” Around half of Bangkok’s modern office stock is currently located outside the CBD, however supply beyond 2022 is predominantly located within large-scale, mixed-use CBD schemes. 2018 has seen notable developer interest in the CBD area, demonstrated by schemes such as One Bangkok, The Parq and the Dusit Thani redevelopment.
The new MRT lines have also had a clear impact on strata-title office stock, which was largely constructed prior to the completion of mass transit, with better maintained buildings in reasonable proximity to a station enjoying renewed resale activity over the past 24 months. Conversely, old strata office buildings located off mass transit routes can be purchased at below replacement cost.
Residential developers are launching new projects off plan and Hobden says around two thirds of condominium units launched for sale off-plan over Q3 were located along existing mass transit lines. While residential investors are often prepared to buy at initial launch, end-users will typically wait to see significant construction progress on transport links before purchasing.
“Buyers will therefore likely increasingly weigh-up the price of a condominium against the travel time/cost of commuting to and from the CBD,” says Hobden.