Despite renewed concerns surrounding the state of the global economy and the Euro Zone debt crisis, residential yields in the Thai capital Bangkok have remained firm.
Data published today from CB Richard Ellis’ (CBRE) research team along with data from the company’s residential leasing transactions has revealed gross yields before expenses averaged 5.9 percent in Q2 2011 for downtown condominiums in Bangkok.
Over the last six quarters, downtown Bangkok condominiums have consistently provided an average yield within a narrow band of five percent to six percent. Smaller one-bedroom units have tended to achieve higher yields in excess of six percent, while larger four-bedroom units lower at three percent.
CBRE said 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, adding to the competition in this segment which could lower yields.
The company added that buy-to-let investors should consider both new build and older condominiums. With lower purchase prices, units in older condominium buildings mean investors can still achieve comparable yields to new buildings, even though the achieved rent per square metre is lower. More importantly, investors need to understand the tenant requirements before purchasing, in order to maximise the return on their investment.
“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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