serviced apartment_w

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MarketResearcBANGKOK SERVICED APARTMENT SECTOR OVERVIEW | MARCh | 2008

BA NGKOK S ERV IC ED APARTME NT M ARK ET


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co l l i e r s i n t e r n at i o n a l | t h a i l a n d

BanGKoK serViced aPartMentsector oVerVieW 2008 After2yearsofuncertaintylinkedtopoliticalissues,thepropertymarketingeneral

andtheservicedapartmentmarketinparticularisexpectedtoexperiencerenewed

activity and growthin2008.

Atthesametime,competition will intensiyfurtheras6,580newservicedapartment

unitsin38projectsaresettoenterthemarketby2011.

Totalnew investmentinthese38projectsisestimatedataroundTHB27billion.

Manyinvestorsareattractedtothissectorbystrong income potential combinedwith

lowerinvestmentandoperatingcostsandofferedhigheryieldsthanhotels.

International operators,suchasOakwoodAsiaPacic,FrasersHospitalityandThe

Ascott Group, areexpandingaggress ively throughoutAsiaandal lhavenew

propertiesunderwayinBangkok.

The advantage o a strong brand name,eitherlocalorinternational,willbecome

moreapparentinamorecompetitiveenvironment.

Asnew supply outpaces new demand,operatorshaveturnedincreasinglytoshort-

staytouristsandbusinesstravelers,ratherthanthetraditionalservicedapartment

long-staymarket(1-3months),competingwithhotels.

Someservicedapartmentsarecurrentlytakingin30-35% long-stay and 65-70%

short-staybusiness.

Withnew supply o hotelsalsoincreasingsharply,themarketisexpectedtoentera

verycompetitivephasein2008.

Withincreasedsupplycoupledwithlicensingrequirementsforshort-stayoperators, a strategy or success could be a return to ocus on the traditional longer-staymarket. Offeringguestsstayingamonthorlongerawell-designedproductthatmeets

theirneedswouldbepreferabletoengaginginaprice-cuttingwarwithhotels.

AppreciationoftheBahtisputtingsomeGradeApropertiesoutsidethebudget

allocationofsomelong-stayexpatriates,whichcouldbeneft the Grade B marketin

thenearterm.

MarKet indicators

2007 2008F

suPPly

deMand

occuPancy (%)

aVeraGe achieVedrent (thB / sq.M.)

www.colliers.com/thailand

B a n G Ko K s e r V i c e d a Pa rt M e n t M a r K e t | M a r c h | 2 0 0 8

B 2011, m

v pm vm w

b ppxm thB 27 b

w pp 6,580 38

v pm pj. tvm xv

p.


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The Knowledge Report | March | 2008 | Bangkok Serviced Apartment Market

colliers international 2


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Central Business DistrictArea covers- Silom Road

- Sathorn Road

- Other sois in betweensuch as Soi Saladaeng, Soi

Convent & Soi Pipat



neW suPPly in central Business district area (cBd)

Serviced Apartment Name Location No. of units Expected completion

F sm s 17 24 2008

s V - M s sp 195 2008

s G s r 155 2009

im r s r 77 2010

M s tw s s l na 2011

Source : Col liers International Thailand Research

neW suPPly in central luMPini


B r s rm 78 2008

B rjpg s Mkg 3 70 2008

nb amb rm s rm 2 108 2008

sm Kmpk rm i 150 2009

s'rg rjm r 22 2010

P Pj P r 150 2011

P Pj P r na 2011


suPPly By location

Currently,thereareapproximately10,685unitsin75servicedapartmentprojectslocatedinBangkok.Aftermoreanalysis,theservicedapartmentareacanbedividedintofourareasorpocketsofconcentration:

CentralBusinessDistrictArea(CBD)Thisis theareathatencompassesSilomRoadandSathornRoadaswellasothersoisinbetweensuchasSoiSaladaeng,SoiConvent&SoiPipat.Thereareapproximately1,687unitsinservicedapartmentlocatedinthisarea.Thebelowtableshowsfuturesupplyofserviced

apartmentprojectsinthisarea.

CentralLumpiniArea

TheCentralLumpiniareacoversareasalongRamaI,Rajdamri,Wireless,PloenchitandLangsuanRoads.Thisareaisconvenientforbothbusinesstravelersandtourists,becauseofitsproximitytomanyoftheofcebuildingsandlocalattractions.CapeHouse,CentrePointWirelessandNaturalVille,amongothers,arelocatedinthissectionofthecitywith

approximately1,984units.However,anadditional578unitswillbeaddedinthisareaby2011.

Central Lumpini Area covers

- Rama I Road- Rajdamri Road- Wireless Road- Ploenchit Road- Langsuan Road



Sukhumvit Area covers- Sukhumvit Road between

Soi 1 and Soi 69 to the north

- Sukhumvit Road betweenSoi 2 and Soi 42to the south.

- Other sois in between



neW suPPly in suKhuMVit


skmv Pk Vw b M skmv s 24 300 2008

cmp skmv s 24 340 2008

na skmv s 19 42 2008

am s ii skmv s 31 122 2008

c 8 skmv s 8 130 2008

c 11 skmv s 11 134 2008

c 23 skmv s 23 138 2008

cm r skmv s 16 238 2008

sm am G skmv s 3 122 2008

eg tg skmv s 55 148 2009

t r s sv apm skmv s 13 170 2009

sm skmv tg skmv s 55 268 2009

okw r tg skmv s 55 na 2009

sm G skmv skmv s 23 265 2010

Jm r & Pk h skmv s 69 300 2010

B P b M skmv 92 2010

F s skmv skmv s 6 250 2010

l&h skmv 19 skmv s 19 600 2011


SukhumvitArea

ThisisthesectionofSukhumvitRoadbetweenSoi1andSoi69tothenorthandSoi2andSoi42tothesouthaswellasothersoisinbetween.ThispopularareawithexpatriatesandtouristsincludestheAsokeIntersectiononthewesttotheEmporiumMalltotheeast.TheareabetweenSukhumvitSoi1andSukhumvitSoi69ispopularasaresidentialareaforwestern

expatriates.JapanesenationalstendtopreferfromAsokeintersectionupwards,especiallySoiThonglor.ServicedapartmentsinthevicinityincludeEmporiumSuites,JasmineExecutiveSuites,PresidentPark,SofitelResidenceAsoke,SomersetLakePointandUnicoGrandSukhumvit,tonameafew.Theservicedapartmentsinthisvicinityare5,273units,withahugeamountofnewsupplyinthisvicinitybeingaddedofapproximately3,659units.



Outer Central BusinessDistrict Area covers- Charoenkrung Road- Narathiwat Ratchanakarin

Road

- Rama III Road



neW suPPly in outer central Business district (outer cBd) area


rv G M ckg r 260 2008

r s nw r 300 2009


Outer Central Business District (Outer CBD) Area

ThisistheareathatstretchesalongthebankoftheChaoPhrayaRiveronCharoenkrungRoad.NarathiwatRatchanakarinandRamaIIIRoadsarelocatedinthisarea.ThisisanewareaforexpatriateservicedapartmentssincethisareaislocatedontheborderoftheCBD,witheasyaccesstotheCBDarea.Thus,thereisascarcityofGradeAservicedapartmentprojectsinthe

area.DespitethismanyservicedapartmentsintheareasuchasOakwoodCityResidence,CentrePointSilom(Bangrak),Shangri-LaHotelApartmentshaveexcellentreputationsinthisvicinity.Theservicedapartmentsinthisprecinctboastatotalsupplyof987units.AdditionalGradeAservicedapartmentsof560unitswillbeaddedinthisvicinity.

Other Areas

MostoftheremainingGradeB&CservicedapartmentsarescatteredacrossthecityincludingPhayathai,Petchaburi,Rama9Roads,Mitmaitri,etc.TherecentadditionoftheAmantainRatchadapisekaddedabout116unitstothetotalstockinthisarea.Thetotalstockofthisareais754units.Sincethenewinternationalairporthasbeenmoved,theareaaroundSuvarnabhumiInternationalAirportis intheinvestmentconsiderationareaforinvestors.Therewillbeapproximately468unitsaddedintheareaaroundthenewairport.

neW suPPly in other areas


F Wg r sk 128 2008

MK sv apm P 169 2008

Fg r e Mkk 350 2009

sm rw P 225 2009

cm s rm iV 120 2008

okw G tw Bg 340 2009-2010


The remaining areas

scattering across the city- Phayathai Road

- Petchaburi Road

- Rama 9 Road

- Bangna Road



Defnition o Grade Aserviced apartments- Good location

- Easy accessible

- Pratical layout or living- Reputative property

management -/- operator- Adequate acilities.

ThemarketshareofservicedapartmentstargetingexpatriatescanbecategorizedintotwogradeswhichareGradeAandGradeB.Grade A serviced apartment projects are in goodlocations and easily accessible. The layout mustbe practical or living, with good design andnice interiors. The property must be managedby reputable management -/- operator. Theremust be adequate acilities or the residents.

TotalsupplyofGradeA-servicedapartmentsisapproximately3,978units,representing37%ofthetotalnumberofservicedapartments,whilethesupplyofGradeB-servicedapartmentsisapproximately6,707units,representing63%.

Recently,therewere22projectsofGradeAservicedapartments,whileGradeBserviced

apartmentshad53projectsinBangkokasofendof2007.



suPPly By Grade

Source : Coll iers International Thailand Research

Fg 1 : Bgkk pp v pm b g ()

G B6,70763%

G a3,97837%

30

Fg 2 : nmb v pm pjb g, 2007

10

0

20

40

50

60

G a G B

Source : Colli ers International Thailand Research

G

53

22

n. pj


8/21colliers international 7colliers international 7


Central Lumpini area hasthe highest numbers o GradeA serviced apartments, withapproximately 1,651 units,ollowed by sukhumvit area,

with 1,501 units and theCBD area, with 826 units.

ThesupplyofGradeAservicedapartmentsismainlylocatedinthreeareaswhicharetheCBD,Sukhumvit,andCentralLumpiniarea. CentralLumpinihasthehighestnumberofGradeAservicedapartments,

withapproximately1,651units,followedbySukhumvitareaandCBDarea.Earlier,GradeAservicedapartmentswereconcentratedintheSukhumvitarea,howevermanylandlordsdidntrenovatetheirproperties,thusthequalityoftheirpropertieshavedroppedtoGradeB.Anotherfactoristhatanincreasingnumberofnewservicedapartmentbuildingsweredevelopedingoodlocations,nearBTSandMRTstations,andalsomanagedbyinternationalchains.However,the

majorityofthesupplyofservicedapartmentsisconcentratedintheSukhumvitareaasthisareaispopularforexpatriatesandtourists.TheSukhumvitareaisalsopopularforJapanese,especiallySukhumvitSoi39andSukhumvit

Soi55wheretheJapanesecommunityinBangkokis.TherearemanyJapanesesupermarketssuchasFujiSupermarket,locatedinSukhumvitSoi39andSoi33.InSukhumvitSoi55,thereisJ-Avenuewhichisaneighbourhoodmall-servingJapaneseandexpatriatesresidingaroundthearea.ThegraphbelowillustratesthenumberofGradeAandGradeBservicedapartmentsineacharea.

1500

3000

Fg 3 : nmb G a & B v pm pp b , 2007

500

0

1000

2000

3500

2500

4000

cBd skmv clmp

o cBd o

G BG a

Source : Co lliers International Thailand Research

l

n.

826

1,501

3,772

861

1,651

333

0

987

0

754


9/21colliers international8 colliers international 8

There are approximately75 serviced apartmentprojects as o 2007, with 39serviced apartment projects

located in Sukhumvit.


Thereareapproximately75servicedapartmentprojectsasof2007,with39servicedapartmentprojectslocatedinSukhumvit.ItisnoticeablethattheprojectsofservicedapartmentinCentralLumpinihavemoreunitsthanthe

projectsofservicedapartmentintheCBD

sincethetotalprojectsofservicedapartmentintheCBDarehigherthanthetotalprojectsofservicedapartmentinCentralLumpini.

ThesupplyofGradeA&Bservicedapartmentsaddedin2007wasapproximately1,596unitsin15projects.In2007,theSukhumvitareahad

thehighestadditionalnumberof supply,with892unitsin12projectsaddedinthisarea.

15

30

Fg 4 : nmb pj G a & B v pm pp b , 2007

5

0

10

20

25

cBd skmv clmp

o cBd o

G BG a

Source : C olliers International Thailand Research

l

n. pj

5

9

30

8 8

3

0

6

0

6



The highest additionalsupply in 2007 was in theSukhumvit area, with 892units in 12 projects.


neW serViced aPartMents added in the year 2007

Project Name Location Opened No. of units Room Type

ap s skmv s 8 nv-07 93

s - 36 s.m.

1Br - 48 s.m.

c 16 skmv s 16 J-07 79s - 30 s.m.

1Br - 36 s.m.

cv Pk ii skmv s 55/13 d-07 241 Br - 100 s.m.

2 Br - 110 -120 s.m.

c c exv

rskmv s 19 2007 60

s - 30 s.m.

1Br - 60 s.m.

2Br - 60 s.m.

F s skmv skmv s 11 o-07 163

s - 52 s.m.

1 Br - 60,73,80 s.m.

2 Br - 95, 100 s.m.

3 Br - 130, 134, 140,160 s.m.

F ub s s s r J-07 142

1 Br - 65, 69 - 72 s.m.

2 Br - 104, 119 -124,

136 -142, 157 s.m.

3 Br - 180 s.m.

Ph 3 Br - 271, 313,

335 s.m.

G c P

rjms Mkg 2 o-07 526

s - 44, 54 s.m.

1 Br - 69, 72 s.m.

2 Br - 111 s.m.

3 Br - 148, 179 s.m.

lg s skmv s 29 d-07 108s - 39, 48 s.m.

1 Br - 46, 65 s.m.

M s sv

apmnw s 24 sp-07 36

s - 38, 44 s.m.

1 Br - 60, 61, 66,

72 s.m.

okw r

skmv 24skmv s 24 d-07 112

s - 29, 42 s.m.

1 Br - 53, 55, 58 s.m.

2 Br - 80, 84 s.m.

Pm tg skmv s 55/9 2007 60

1 Br - 55.5 s.m.

2 Br - 69.37 s.m.

2 Br - 83.25 s.m.

Pmm P skmv s 39 Fb-07 16

s - 44 s.m.

2 Br - 88 s.m.

3 Br - 132 s.m.

Ph - 168 s.m.

t tp r skmv s 49 J-07 59s - 40, 45, 50 s.m.

2 Br - 80 s.m.

t av skmv s 55/23 M-07 201 Br - 60 s.m.

2 Br - 110 s.m.

u G skmv skmv s 1 nv-07 98s - 35, 40, 45,

65 s.m.

Total : 15 properties 1,596 units




By 2011, an additional6,580 serviced apartmentunits in 38 projects willbe added in all area.



Sukhumvitareaisconsideredaresidentialareaforexpatriatesresidingin Bangkok,similartoSouthKensingtoninLondon.Thus,newsupplyofservicedapartmentshasfocused

onthisarearecently.By2011,therewillbeadditionalnewsupplyofservicedapartmentsinSukhumvitofapproximately3,659units,representinganincreaseof69%oftotalsupplyofservicedapartmentsin thisarea.ThenewsupplyinCentralLumpiniareawillbe578units,andinCBDareaabout451units.Itis

interestingthattherewillbenewsupplyinotherareasfortheamountof1,332units,ofwhich36%oftotalnewsupplywillbelocatednearbySuvarnabhumiInternationalAirport

whichwillbemanagedbyaninternationalchain.Withinfouryears,anadditional6,580servicedapartmentunitsin38projectswillbeaddedinallareas.

TheincreasingnumberofnewsupplyofservicedapartmentsaswellastheexistingsupplywillincreasecompetitionintheSukhumvitarea.Notonlyisthereahugeamountofnewsupplyofservicedapartments,butalsoalargenumberofnewhotelswillbeaddedinthisareaby2011.Thecompetitionwillnotexistonlybetweenservicedapartmentsthemselves,butbetweenservicedapartmentsandhotelsasmanyservicedapartmentshaveappliedforhotellicencesinordertocatertothetouristsandbusinesstravelerswhotravel

forshortstayperiods.Though,manyservicedapartmentshavenotyetappliedforthehotellicencessincethepropertiesareunabletopassthestandardqualiticationtoreceivethehotellicences,theseservicedapartmentsstillofferdailyratesinordertogetthebetteroccupancyrateaswellashigheryields.TheextremecompetitionwillstartinSukhumvitareaintheverynearfuture.Thereasonwhyservicedapartmentsfocusmoreonshortstaycustomersisasfollows:

neW suPPly

Thenumberofsupplyexceededthenumberofnewexpatriatesor

Thehigheryieldfromgettingadailyrate.

With a huge amount o new

supply o serviced apartmentsand hotels will increasecompetition in this area.

1500

3000

Fg 5 : F pp v pm Bgkkb bw 2008 & 2011

500

0

1000

2000

3500

2500

4000

cBd skmv clmp

o cBd o

Source : C olliers International Thailand Research

l

n.

451578

560

1,332

3,659



The highest increase supplyo serviced apartments willbe in 2008 with 25.44%yeay-on-year in 2007.



Theincreasingnewsupplyofservicedapartmentswasapproximately3-7%between2004&2006.Thesharpincreasestarted

in2007&2008with17.56%&25.44%respectivelyasillustratedinthefollowingtable:

current & neW suPPly oF serViced aPartMent units BetWeen 2004 & 2011

Year Current supply New supply % change y-o-y

2004 7,708 247 3.2%

2005 7,955 537 6.8%

2006 8,492 597 7%

2007 9,089 1,596 17.56%

2008 10,685 2,718 25.44%

2009 13,403 2,106 15.71%

2010 15,509 1,006 6.49%

2011 16,515 750 4.54%


6,000

12,000

Fg 6 : nmb w pp v pm bw 2004 & 2008F

2,000

0

4,000

8,000

14,000

10,000

2004 2005 2006 2007 2008F

nw pp c pp


y

n.

7,708

7,9558,492

9,089

10,685

2,718

1,596

537

597

247


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By 2011, there will beapproximately 6,580 units in38 projects added the supplyo serviced apartment.

suMMary oF neW suPPly oF serViced aPartMents in BanGKoK By 2011

No. Project Name Location No. of units Est. completion

1 am ii skmv s 31 122 2008

2 B rjpg s Mkg 3 70 2008

3 B P b M skmv 92 2010

4 B r s rm 78 2008

5 cm s rm iV 120 2008

6 c 8 skmv s 8 130 2008

7 c 11 skmv s 11 134 2008

8 c 23 skmv s 23 138 2008

9 cm r skmv s 16 238 2008

10 cmp skmv s 24 340 2008

11 eg tg skmv s 55 148 2009

12 F sm s 17 24 2008

13 F Wg r sk 128 2008

14 Fg r e Mkk 350 2009

15 F s skmv skmv s 6 250 2010

16 im r s 77 2010

17 Jm r & Pk h skmv s 69 300 2010

18 l&h skmv 19 skmv s 19 600 2011

19 MK sv apm P 169 2008

20 M s tw s s l na 2011

21 na skmv s 19 42 2008

22 na P r na 2011

23 nb amb rm rm s ii 108 2008

24 okw r G tw Bg 340 2009-2010

25 okw r tg skmv s 55 na 2009

26 P Pj P r 150 2011

27 r s nw r 300 2009

28 rv G M ckg r 260 2008

29 s G s r 155 2009

30 s V - M s sp 195 2008

31 sm Kmpk rm i r 150 2009

32 sm am G skmv s 3 122 2008

33 sm G skmv skmv s 23 265 2010

34 sm rw P 225 2009

35 sm skmv tg skmv s 55 268 2009

36 s'rg rjm 22 2010

37 skmv Pk b M skmv s 24 300 2008

38 t r s sv apm skmv s 13 170 2009

Total : 38 properties 6,580 units

Source : Colliers International Thailand Research



The demand o servicedapartments market canbe devided into twogroups which are

I. New expatriates

II. International tourists -/-

business travelers.



NewexpatriatesmovingtoBangkokTheamountofdemandfromexpatriatesforservicedapartmentsmarketcomesfromtheincreasingnumberofexpatriateseachyearsincetheservicedapartmentsarethetemporaryresidencesforexpatriatesoncetheyhavemovedtoBangkok.Theywillstayforalengthofone-threemonthsuntiltheycanselecttheirpermanentresidencessuchasApartmentsandSinglehouses.Though,therearesomeexpatriateschoosingtostayonayearlycontractatservicedapartments,after

wehaveundergoneourstudy,theaveragelengthofstayofexpatriatesstayinginservicedapartmentisthreemonthsor90days.ThedatafromtheOfficeofForeignWorkersAdministration(WorkPermit),DepartmentofEmploymentofTheMinistryof LabourhasshownthetotalnumberofexpatriatesinBangkokbetween2004and2007.Thenewworkpermitsissuedwasestimatedfromtheproxyofgrowthindemandbetween2004&2007asshowninthebelowchart:

Fromtheassumptionthattheaveragelengthofexpatriatesstayinginservicedapartmentsis3monthsandanother2%ofthetotalnumberofexistingexpatriatesstayinginayearlycontractatservicedapartment,thereforewe

haveestimatedthenumberofroomnightsexpatriatesresidinginservicedapartmentsbetween2004&2007asfollows:

deMand

Currently,thedemandfortheservicedapartmentmarketcanbedividedintotwogroupswhichareshortstaytourists&businesstravelersandnewcomingexpatriatearrivalsinBangkokeachyear.

6,000

Fg 7 : nw wk pm , Bgkk 2004-2007

2,000

0

4,000

8,000

10,000

2004 2005 2006 2007

Source : Ofce o Foreign Workers Administration (Work Permit)Department o Employment, The Ministry o Labour

& Colliers International Thailand Research

y

n. w wk pm

7,592

8,670

6,9287,574

600,000

Fg 8 : a m g g Bgkk v pm bw 2004 & 2007

200,000

0

400,000

800,000

1,000,000

1,200,000

2004 2005 2006 2007

Source : E xecutive Serviced Apartment Alliance (EXSAM)


y

n. m g

683,280780,300

372,942436,233

623,520 681,660

486,808

317,521

1 g 3 m g



Another demand o servicedapartments comes rom shortstay visitors which are touristsand business travelers orleisure and business purposes.



IfwecomparetheroomnightsgrowthofnewsupplyofservicedapartmentwiththeroomnightsgrowthofdemandfromexpatriatesrelocatingtoBangkok.It isshownthatthegrowthrateofnewsupplyincreasedina

higherratethanthegrowthrateofdemandfromnewexpatriates.Thegrowthrateofroomnightsofnewsupplyincreasedby167%year-on-yearin2007whilethegrowthrateofroomnightsdemandincreasedby9.3%year-on-year.However,thenumberofexpatriatesareexclusiveofdiplomaticorUnitedNationexpatriatestaff.Therefore,thisguresarenotentirelyrepresentativeofexpatriatesbasedinBangkok.Webelievethatthereareanumber

ofexpatriatesbasedinThailandwithoutworkingpermits.However,themajorityofthesedonothaveaccommodationbudgetslargeenoughtoaccountforasignificantamountofdemandintheservicedapartment

sector.Thereare,ofcourse,alsoanumberofexpatriatesrelocatingtoBangkokwhodonotstayinservicedapartments.Nevertheless,newworkpermitsissuedcanserveasaproxyforservicedapartmentsupplyonarelativebasis.Thebelowgraphisthecomparisonofthegrowthrateofsupplyandthegrowthrateofdemand.

ThecorebusinessofservicedapartmentistoservethedemandresidinginBangkokinaperiodofmorethanamonth.However,theslightlyincreaseindemandwasunableto

catchupthehighincreaseinsupply,asaresult,theservicedapartmentshavemovedmoreintotheshortstayfromtourists-/-businesstravelers.

NumberoftouristarrivalsatBangkokaccommodation

Anotherdemandofservicedapartmentscomesfromshortstayvisitorswhicharetouristsandbusinesstravelersforleisureandbusiness

purposes.OfficialfiguresfromtheTourismAuthorityof Thailand(TAT)has revealedthatthenumberoftourists-/-business

travelersarrivingBangkokaccommodationbetween2004&2007withtheaveragelengthofstaybetween2004&2007,wecangetthe

anuallynumberofroomnightsasshowninthefollowingchart:

600,000

Fg 9 : em gw m gm & pp, 2004 & 2007

200,000

0

400,000

800,000

2004 2005 2006 2007

Gw m g pp

Gw m g mSource : E xecutive Serviced Apartment Alliance (EXSAM)


y

n. m g

683,280

780,300

623,520

217,905

681,660

582,540

90,155

196,005

yn. v Bgkk

mmavg. g t m g

2004 9,907,832 2.01 19,914,742

2005 10,519,754 1.97 20,723,915

2006 10,673,145 1.83 19,531,855

2007 9,678,773 1.87 18,099,305

Source : Tourism Authorit y o Thailand (TAT), Thai Hotels Associa tion (THA)& Colliers International Thailand Research




Though, the numbero tourists at Bangkokaccommodation increasedannually between 2004 and2006, with the decrease in

average length o stay in2006 caused the decreaseo room nights at Bangkokaccommodation in 2006.

Though,thenumberof touristsatBangkokaccommodationincreasedannuallybetween2004and2006,thedecreaseinaveragelengthofstayin2006causedthedecreaseofroomnightsatBangkokaccommodationin2006.Wehaveassumedthateachtouristoccupiedasingleroom.Withthehighincreaseinsupplyofbothhotelsandservicedapartments,whilethedecreaseinannualroomnightsofdemandfromtourists-/-businesstravelers,theextremecompetitionwill

existinthenearfuture

oVerall aVeraGe occuPancy rate oF serViced aPartMentsBetWeen 2004 & 2007

yearaVG. occuPancy

ratetotal suPPly

unitstaKe uP units /

daytaKe uP units /

year

2004 86.33% 7,955 6,868 2,506,820

2005 89.81% 8,492 7,627 2,783,855

2006 85.06% 9,089 7,731 2,821,815

2007 83.33% 10,685 8,904 3,249,960

Source : Executive Serviced Apartment Alliance (EXSAM) &Colliers International Thailand Research

ProPortion oF deMand oF short terM and lonG terM

Withtheaverageoccupancyrateofservicedapartmentmarketsbetween2004&2007,wecanestimatethetotalroomnightsinayearbetween2004&2007asshownonthefollowingtable:

Withtheaverageoccupancyrateofservicedapartmentbetween2004&2007,itisnoticeablethattheproportionofshorttermwasgreaterthantheproportionoflongtermandthetrendofshorttermincreasedannuallybetween2005&2007.Thefuturetrendofservicedapartmentsistoserveshortstaywhichisthecoremarketofhotel.Belowchartshowntheaverageproportionofcustomersstayinginservicedapartmentsforthelengthof

1.Between1-3monthsperiod. 2.Minimum1yearperiod.

3.Daily/weeklyperiod.

It is noticeable that proportion

o short term was greaterthan the proportion o longterm and the trend o shortterm increased annuallybetween 2005 & 2007.

30%

Fg10 : Pp g v pmbw 2004 & 2007

10%

0%

20%

40%

50%

60%

70%

80%

90%

100%

2004 2005 2006 2007

Source : Executive Ser viced Apartment Alliance (EXSAM) &Colliers International Thailand Research

y

Pg

27% 28%

13%15%

22% 21%

15%13%

60% 59% 62% 64%

lt (1-3 m) lt (1 ) st ()



The occupancy rate o GradeA serviced apartment decreasedannually between 2005 &2007, However, the averageoccupancy rate o Grade

A in the CBD increased in2007 which was dierentrom Grade A in other areasdue to little supply o servicedapartments in this area.



occuPancy rate:

Year

Grade A Grade B

ov cBd skmv

c

lmp ov cBd skmv

c

lmp

o

cBd

2004 82.70% 69.57% 87.63% 80.44% 91.86% 82.80% 94.98% 85.16% 80.98%

2005 90.24% 85.75% 93.07% 89.20% 91.38% 77.42% 93.57% 90.02% 84.65%

2006 85.47% 78.53% 86.94% 86.35% 85.47% 77.83% 82.90% 81.69% 82.88%

2007 84.01% 81.45% 84.73% 84.31% 86.01% 79.18% 87.23% 88.94% 74.84%

Source : Executive Serviced Apartment Alliance (EXSAM) & Colliers International Thailand Research

TheoccupancyrateofGradeA servicedapartmentdecreasedannuallybetween2005&2007.Thereareseveralfactorsthatcausedthiswhichareasfollows:

TherevaluationofThaibahtwhichmadeGradeAservicedapartmentrentgooverthe accommodationbudgetaftervisitorsconvertedtheircurrencyintoThaibaht,so thattheamounttheygotwasless.ThedemandoflongstayshiftedtoGradeBserviced apartment.

ThetrendsoftheGradeAservicedapartmentfocusedonshortstay,thustheoccupancy ratevariedfromthenumberoftouristarrivalsatBangkokaccommodation,ratherthan thenumberofnewexpatriatescomingtoBangkok,sincetherewasanincreaseof numberofexpatriatesin2007butthedemandspouredtoGradeBservicedapartment.

ThepoliticaluncertaintyinThailandin2006&2007hassloweddowntheforeign businessinterestsaswellastheinternationaltouristarrivalsatBangkokaccommodation.

However,theaverageoccupancyrateofGradeAintheCBDincreasedin2007whichwas

differentfromGradeAinotherareasduetolittlesupplyofservicedapartmentsinthisarea.



The Knowledge Report | March | 2008 | Bangkok Serviced Apartment

The slight dierence betweenGrade A & Grade B rentwas ound in 2006 whichwas just 2.7% dierence.

Average achieved rent o Grade A

- Central Lumpini =THB 1,222 / sq.m.

- CBD = THB 1,210 /sq.m.

- Sukhumvit = THB 1,093 /

sq.m.

Fortheoverallmarket,thebigdifferenceoftheaverageachievedrentofGradeA&Bservicedapartmentwas14%in2004.TheslightdifferencebetweenGradeA&GradeBrentwasfoundin2006whichwasjust2.7%difference.In2007,theaveragerentofGradeBdecreasedby4%sincetherewasanadditional

ofsupplyofservicedapartmentaddedwithapproximately1,596units,with943unitsofGradeAand653unitsofGradeB.Duringtheopeningofnewproperties,thenewsupplyofferedspecialpriceswhichaffectedGradeBservicedapartments.

Thehighestachievedrentin2007wasfoundinCentralLumpini,withTHB1,222/ sq.m.followedbytheCBDandSukhumvitarea,withTHB1,210/sq.m.&THB1,093/sq.m.

respectively.TherewasahugesupplyofservicedapartmentsintheSukhumvitareawhichincreasedthecompetition.

achieVed rent

1,157

1,058

Source : E xecutive Serviced Apartment Alliance (EXSAM) &

Colliers International Thailand Research

600

Fg 11 : avg v G a & B v pm

bw 2004 2007

200

0

400

800

1,000

1,200

1,400

y

thB / sq.M.

2004 2005 2006 2007

975

853

1,045

962

1,132

1,102

G a G B

Source : Executive Serviced Apartment Alliance (EXSAM) &


600

Fg 12 : avg v G a v pm

cBd, skmv c lmp bw 2004 & 2007

200

0

400

800

1,000

1,200

1,400

y

thB / sq.M.

2004 2005 2006 2007

cBd skmv c lmp

THE AVERAGE ACHIEVED RENT OF GRADE A SERVICED APARTMENTS




The highest achieved rento serviced apartments in2007 was ound in CentralLumpini, with THB 1,100 /sq.m., ollowed by Sukhumvit

and the CBD, with THB1,057 / sq.m. & THB738 / sq.m. respectively.

ThehighestachievedrentofGradeBservicedapartmentswasfoundinCentralLumpini,withTHB1,100/sq.m.,followedbySukhumvitandtheCBD,withTHB1,057/sq.m.&THB

738/sq.m.respectivelysincetherewereonlyafewGradeBservicedapartmentinCentralLumpini.ThemajorityofGradeBserviced

apartmentunitsinSukhumvithavecompactsizewhichgivesahigherratepersq.-m.-,thereforetheachievedrateofGradeBinSukhumvitwasinthesecondrankbetween

2004&2007

THE AVERAGE ACHIEVED RENT OF GRADE B SERVICED APARTMENTS

Source : E xecutive Serviced Apartment Alliance (EXSAM) &


600

Fg 13 : avg v G B v pm

cBd, skmv, c lmp bw 2004 & 2007

200

0

400

800

1,000

1,200

1,400

y

thB / sq.M.

2004 2005 2006 2007

cBd skmv c lmp




267 oFFices in 57 countrieson 6 continents

usa 95canada 17latin aMerica 17

asia PaciFic 53eMea 85

us$1.6 Billion in annual reVenue673 Million square Feet underManaGeMent10,171 ProFessionals

contact inForMation

thailand:BangkokPatima JeerapaetManaging DirectorColliers International17/F Ploenchit CenterKlongtoeyBangkok 10110Tel: 662 656 7000Fax: 662 656 7111

researcher:Risinee SarikaputraManager | Research

t p m m b wb www..m/. q m b r dpm mb bv. tm b pp b c i vg g m . ci mk g, p w k, xp mp, gg m g, b m , w , b. a p k w m. c i x v mp m, wg m x b mg g m. c i ww f p w p

mp.

www.colliers.com/thailand


Notes

Theservicedapartmentratingusedinourresearchissolelybasedonpropertyratingandachievedratesobtainedfrommarketresearch.TheratingsystemusedinourreportisnotbyColliersInternational.


21/21

www.co l l i e r s . co . t

Tis report and oter researc materials may be ound on our website at www.colliers.co.t Questions related toinormation erein sould be directed to te Researc Department at te number indicated above. Tis documentas been prepared by Colliers International or advertising and general inormation only. Colliers International makesno guarantees, representations or warranties o any kind, expressed or implied, regarding te inormation including,b l d d l b l A d ld d k

serviced apartment_w

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