Revitalisation Leads to Commercial Activity, Demanding More Thai Property Rentals
The private sector’s plan to revitalise Bangkok’s Chinatown coupled with the completion of the MRT Blue line extension in 2019 signal the emergence of commercial real estate in the area, CBRE Thailand says.
Over a century ago, Bangkok’s Chinatown was once the centre of it all. The streets of Yaowarat and Charoen Krung were known to be Thailand’s central business districts. As currently one of the most visited tourist spots, the streets of Chinatown are crawling with tuk-tuks, street vendors, lots of food, and historical buildings.
Now, the central business district has moved eastwards and northwards towards Silom, Sathorn, Wireless Road, Ploenchit, and Sukhumvit Road. But the continual development of Chinatown while retaining its historic charm will attract more tourists for the years to come.
With the private sector leading Chinatown’s revitalisation, we should expect more commercial activities. In Singapore, its Urban Redevelopment Authority strictly implements the restoration and preservation of historical sites. But unlike Singapore, the Bangkok property market experiences little government intervention with regards to the construction of properties in specific areas.
As a result, traditional commercial streets in Chinatown are likely to be transformed into small hotels, bars, and restaurants that mainly attract tourists, CBRE further explained.
New Bars, Restaurants, and Hotels are Here to Stay due to Expected Influx of Tourists
Mirroring what CBRE said, there are indeed several cafes, bars, and boutique hotels that have been entering the area. In turn, Chinatown’s daily visitors have been changing in demographics. From the usual elderly visitors and curious tourists, the number of younger age brackets have been increasing, said C9 Hotelworks Managing Director Bill Barnett. Bars such as Teens of Thailand, El Chiringuito, and Tep Bar are emerging as trendy and hip bars that add a bit colour to Bangkok’s Chinatown.
Another major factor for bringing more tourists to Chinatown is Thailand’s Blue line extension bound to be operational in September 2019. The MRT Blue line extension includes Wat Mangkon MRT Station, the nearest station to Chinatown. Hence, we could expect a doubled number of tourists and property investments around the area.
Rental Businesses to Boom?
According to Barnett, the cost of land in Chinatown led to the emergence of multiple rental properties. Because of the limited land and prized historic buildings, the land prices in Chinatown average to about THB 375,000/square metre. This makes Chinatown one of the most expensive areas in Thailand. Thus, leasing a property will be much more favourable than buying one.
One of the expected property launches by the end of the year include the Holiday Inn Express Bangkok Chinatown by InterContinental Hotel Groups, said Barnett. The THB 3 billion mixed-use project will occupy 5,000 square metres of retail space, a 224-unit hotel, and 46 residential units for sale. The projected occupancy rate of this new property is at 80% with an average room rate of THB 2,000. Likewise, Burasari Group has also made arrangements to manage a new 128-unit hotel in Chinatown.
Some are even transforming old buildings to their advantage. For instance, the Burasari Group has another project in store called the W22. This budget boutique hotel will have an average room rate of THB 1,000.
Despite all this, e-commerce presents itself as a challenge towards the retail property market, said CBRE Thailand. This is due to people’s lack of interest in modern and large buildings only. The challege is to give “unique expereinces” to each customer. With that said, a way to attract people into Chinatown is through making buildings “instagramable.” The renovation of Chinatown’s historic buildings can pave the way for this.
In this rediscovery and revitalisation, many hope that the authenticity of Chinatown won’t be gone. But for sure, Chinatown will be expecting a diverse and competitive property market. Especially so because the big names are entering the market.
Moving the focus of the Thailand property market from the usual commercial areas such as Sukhumvit, this may be a way of decongesting and decentralising crowded areas.
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