Small compounds in need

Land owners holding plots in Bangkok should consider developing small-scale rental housing compounds to serve demand from expatriates, says real estate consultancy Jones Lang LaSalle.

The company said there was insufficient supply of rental houses in the city that were purpose-built for foreigners, particularly those looking for a residence in an exclusive housing compound. Providing for this lucrative niche offers an appealing investment option for land holders in the capital.

Daonum Lilavivat, JLL’s head of residential agency, said the company continually receives inquiries from expatriates with family living in Bangkok who are seeking accommodation in small housing compounds with six to seven units, each with 400 to 500 square metres of usable space, good security, estate management and maintenance services.

JLL has been appointed to let houses in several rental compounds where units fetch monthly rentals between 180,000 and 300,000 baht.

“These compounds are leasing out very well,” Ms Daonum said. “In fact, demand for this type of houses outstrips the available supply in the leasing market.”

Although the difference between the monthly rental rates per sq m of rental houses and luxury apartments or condominiums may be minimal, purpose-built rental houses typically generate stable income streams as the minimum lease term is usually two years, compared with one-year terms for condominiums or apartments.

Stand-alone detached houses are less popular due to security concerns. Houses in large estates can fail to attract expatriates due to the lack of exclusivity and the fact they typically lack a single estate manager, she said.

“Given the lack of supply, developing a small housing compound in central Bangkok to accommodate expats may be an interesting investment option, particularly for those who already own land, which they do not want to sell or lease on a long-term basis,” said Ms Daonum.

Plots of at least 300 sq wah can be used to develop such high-end compounds, she said.

SOURCE: Bangkok Post