Knight Frank was established in London in 1896, and now boasts 165 offices in more than 36 countries around the world. Knight Frank follows the policy of its head office in London and, unlike several other international players in the Thai market, Knight Frank is not a franchise, according to Frank Khan, director of Knight Frank Chartered (Thailand) Co Ltd's Residential Department.

In the first of a two-part series of articles, ThaiAsiaToday.com talks with Khan and associate director Kijkan Tibkaeo about the current state of the Thai property sector. Part one focuses mainly on the condominium sector in the capital, while part 2 will go “beyond Bangkok”.

ThaiAsiaToday.com (TAT): Thanks very much for joining us today. My first question really relates to condominiums. Is there currently an oversupply of condominium units in Bangkok?

Frank Khan (FK): Firstly, I think it's important to look at the various sub-sectors of the condominium market.

Firstly, let's look at what we call C+. This refers to units that are priced at between 55,000-65,000+ baht (US$1,643-1,942) per square meter. Typically, this would refer to units based along Ratchadapisek Road or Rama IX Road.

These types of developers tend to have their own people and their own investors and there continues to be robust demand among Thais and foreigners, either as an investment or for speculation purposes. So basically, C+ category property is always in demand and property in this bracket would typically cost 1.8-2.5 million baht ($53,700-74,600). Two well-known developers in this sub-sector are Supalai and LPN Development.

In the BB+ sub sector, again there is reasonably strong demand among both locals and foreigners. Property in this category is priced at 90,000-110,000 baht per sq m, so a 50 sq m condominium would set you back about five million baht.

Properties would likely be located along Sukhumvit up to Ekkamai and, again, this category is reasonably affordable for both locals and foreigners, and demand remains strong so there is no oversupply.

When we look at what we define as the “premium” category (AA+), things are a little different. These properties might be priced from 100,000-200,000 baht per sq m. These are still attractive at some pricing points among wealthier Thais, but beyond a certain point lose the interest of the local property investor. Since the maximum foreign quota is 49%, the challenge in this sub-sector is selling off the remaining 51% among locals.

Most Thais don't really want to spend more than 120,000 baht per sq m, although some wealthier individuals may go above this to purchase for “face”. So this sub-sector is quite tough and sales are relatively slow.

TAT: Have you seen any interesting trends emerging over recent years in the Bangkok condo market?

FK: Well, one thing I would say is that consumers are now much more than willing to pay for greater convenience.

Life is very hard for (working) people right now and so they'll pay a bit extra for added convenience. This might mean living near to a motorcycle taxi rank that can take you quickly and easily to the Emporium for shopping, or being located close to an MRT or BTS (railway) station, although I should stress that these are not the only things that define “convenience”. Some people want to be located near the Central Business District (CBD) to benefit from the diversity of dining and entertainment options that area offers, so this might influence their decision when looking to purchase a property.

TAT: And are even the lower-priced properties starting to benefit from such convenience?

FK: Some are, particularly once the price is above say 72,000 baht per sq m. Basically, the further away from downtown Bangkok you get, the lower prices become, so if you're looking to purchase closer to town than Ekkamai, the price won't be much below 90,000-105,000 baht per sq m. But by the time you get to On Nuch, prices might be as low as 82,000-85,000 baht per sq m.

TAT: And which area would consider to be a 'hot' spot?

FK: That would have to be Asok. If you look around that intersection*, and up towards the Queen Sirikit National Convention Center (QSNCC), you'll see that it's where all the best offices, condominiums, and hotels are going up right now.