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The future of Bangkok’s Chinatown

Bill Barnett

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The future of Bangkok’s Chinatown | The Thaiger

by Bill Barnett of c9hotelworks.com (First appeared on linkedin.com)

The emergence of boutique hotels, hostels, hip bars and cafes has revolutionised the way Chinatown, Bangkok is seen. This, together with the entry of international branded operators setting the stage for exciting changes.

Overview of Chinatown

For over 200 years, Yaowarat Road in Bangkok or Chinatown has been a center of Chinese immigrants in Thailand. Although some newer development has taken away some of Chinatown’s authenticity, it is still to this day one of Bangkok’s most visited areas which hasgenerated a splendid mixture of the old and new, be it street-food vendors, temples, or art galleries. On top of that, what really draws both local and foreign demand to the area is the ultimate experience itself.

Jammed streets with full tuk-tuks, small vans, and street merchants are what the other areas cannot offer. With some buildings and land is left unused, there have been many redevelopment projects for hotels and residences, and now domestic and international hotel chains are entering the market. What follows, is meant to shed light on the transformation of Chinatown.

Tourism

With the combined number of passenger arrivals at Suvarnabhumi and Don Mueang International Airports close to 50 million in 2017, the gateway experienced a 5-year compound annual growth rate (CAGR) of 11%. Based on our research and market interviews with hotels in the area, the number of tourists visiting Chinatown has sharply increased over the past few years. Thus, hoteliers in the area foresee that Chinatown will be reinvented over the next five years

Chinatown is now one of the hippest areas in Bangkok, while a few short years ago Millennials would view Chinatown as an ‘ancestor’s area’ where elders meet up and have their Asian breakfast. Similarly, the traditional food scene still exists, except that the average age of visitors has dropped substantially and visitors now are becoming bar or café hoppers. What changed is how the vibe shifted over a short period of time.

The future of Bangkok's Chinatown | News by The Thaiger

Mass Transit

After five years of construction, the upcoming MRT station of Wat Mangkon is now close to completion. Scheduled to open to the public in mid-2019, this station will be the nearest mass transit connection to Chinatown and sits right across from the upcoming 224-key Holiday Inn Express Bangkok Chinatown.

The station’s name originated from the largest Chinese Buddhist temple in Bangkok, Wat Mangkon Kamalawat. Regardless of how trendy Chinatown is, the area is not expected to be another Thonglor as there is no plan for a BTS station. It will be advantageous to have better access to public transportation, but the MRT does not carry the same clout as the BTS since many tourists are not familiar with the MRT.

Hotel Performance

Due to the location of Chinatown, budget hotels face challenges in competing with similar hotels in other parts of Bangkok such as Sukhumvit. Boutique hotels in the area are on an upward trajectory, yet accessibility to public transportation in the area remains a key factor.

The average daily rate (ADR) of boutique hotels in Chinatown ranges from 2,000 up to 6,000 baht, with occupancy averaging over 75%. Due to the constraints on development scale, hotel inventories for the existing hotels range from a handful up to 70 or 80 rooms. Given a captive guest base, revenue from food and beverage cannot be overlooked. Hotel operators are generally more focused on generatingother income for their properties compared to other areas in Bangkok. According to our research, some hotels’ F&B contribution can reach 70%, while the market-wide average is 31%.

Demand Characteristics

Online travel agents (OTAs) play an important role in this market among all distribution channels as boutique hotels mainly target younger guests who search for more authentic locations. Some boutique hotels try to stimulate direct bookings by offering complimentary breakfast and discounts on F&B and spa packages. One of the best performers in the market is able to achieve 70% for direct bookings.

In general, OTAs account for 75% bookings on a broad basis. For the nationality mix, the Asian market accounts for 38%, followed by European and American markets with 34% and 29%, respectively. The purpose of stay is mostly leisure at 93%, and only 4% of guests come for business.

Land vs. Rental Prices

With a peak land price of 375,000 baht per square metre, Chinatown is one of the most expensive areas in Thailand. Such high land prices result from the limited land supply and the vintage-style buildings. It is important to highlight the inverse correlation between land prices and rental/lease rate in Chinatown. Rental prices vary but generally tend to be in the range of 300 baht per square metre per month, while they can be well over 1,000 baht per square metre in Bangkok’s CBD areas. With a business model heavily reliant on leasing property, small boutique hotel and hostel supply isexpected to surge in Chinatown.

The future of Bangkok's Chinatown | News by The Thaiger

International vs. Domestic Chain Offerings

There has not been an international hotel brand in Chinatown until recently, with the InterContinental Hotels Group (IHG) poised to enter. The agreement between IHG and Uniland Company Limited to open a Holiday Inn Express is expected to be completed bythe end of this year. On the other hand, the notable Thailand-based Burasari Group, who own and manage Shanghai Mansion Bangkok, has signed an agreement to manage a new 128-key property in Chinatown early this year, marking itself as a leading operator in the area.

Burasari Group, with seven hotels in the portfolio domestically and internationally, is expanding its hotel network within the country. The group has been managing Shanghai Mansion for almost 10 years and believes the upcoming changes in the area will elevate guest experience and draw more demand to Chinatown.

Pipeline Projects

Holiday Inn Express Bangkok Chinatown is part of the THB3-billion ’I’m Chinatown’ mixed-use project. Positioned as ‘Modern Chinese’ in terms of design, the project includes 5,000 square meters of retail space, a 224-key hotel and 46-unit residence for sale. With its strategic location situating across the upcoming mass transit station, the hotel will mainly target foreign tourists and business travelers. The property is expected a year-round occupancy over 80% with average room rate over 2,000 baht.

Another project in the Chinatown pipeline, which will be managed by Burasari Group, is the redevelopment of a 50 year old vacant hotel. With 128 keys, W22 will be situated on Wongwian 22 with an opening in the mid of this year. Positioned as a boutique budget hotel, it is targeting Asian travelers and tour groups. The hotel will offer multiple room types including dormitories, double, twin and family rooms with an average room rate of 1,000 baht projected.

The two projects will create a new dynamic. Firstly the HIEX will provide standardised accommodations with expected amenities such as a swimming pool, which only a handful of hotels in the area have. Secondly, the W22 hotel will not only offer an affordable stay but also a varietyof room types and a large common space for guests to relax.

The future of Bangkok's Chinatown | News by The Thaiger

PHOTO: shanghaimansions.com

Forward Outlook

Because of the continuously increasing number of cafes, bars, and restaurants, further hotel development is expected to highlight the importance of design. Although cultural experience hasbeen the whole point of coming to Chinatown, the ‘chic’ experience will be a secondary factor to generate demand. From the recent developments and upcoming hotels, all properties have their uniqueness in design no matter in common areas or F&B outlets.

Even the 10 year old Shanghai Mansion Bangkok has been able to maintain high performance due to its unique interior design. Looking across Bangkok’s luxury Riverside projects, such as Four Seasons and Capella which will come into the market soon, it is clear that luxury hotels have come out of the Bangkok Central Business District. With mass transit and proximity to the river, there is a high possibility to see more upscale development coming up in Chinatown.

In the bigger picture, the new MRT station will be a key turning point for the area and its future potential remains unique in its offering.


Find more property for sale and rent across Thailand at Thaiger Property, powered by FazWaz. You can even list your property for free.

Bill Barnett has over 30 years of experience in the Asian hospitality and property markets. He is considered to be a leading authority on real estate trends across Asia, and has sat at almost every seat around the hospitality and real estate table. Bill promotes industry insight through regular conference speaking engagements and is continually gathering market intelligence. Over the past few years he has released four books on Asian property topics.

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Bangkok

Calls to restrict foreign property purchases in Bangkok

The Thaiger

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Calls to restrict foreign property purchases in Bangkok | The Thaiger

Dr. Sopon Pornchockchai, the President of the Thailand Agency for Real Estate Affairs, is calling for controls to restrict foreign property buyers.

Thailandproperty.news is reporting than he is justifying his comments saying the growth in income of Thais is slower than the property price rises being pushed up by high foreign demand.

“Some measures should be adopted, such as higher stamp duty for foreigners,” he said.

The article says that this is the first time an industry figure has spoken out about the need to restrict or reduce the amount of foreign investment in the Bangkok property market. Dr. Sopom says he believes that foreign buyers account for around 20 percent of all Bangkok property purchases.

He noted that Chinese purchases account for about 80 percent of foreign buyers.

Read the original story HERE.

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Property

Goodbye – Evicting a tenant in Thailand

Robert Virasin

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Goodbye – Evicting a tenant in Thailand | The Thaiger

It’s a goal for many people to become a landlord. They purchase property for the purpose of renting it out for passive income. The property owner interviews prospective tenants and ensures that they sign a lease agreement and put down a deposit. However, all of this doesn’t prevent bad tenants from revealing themselves after they have moved into the property – all the smiles can disappear once they get the keys.

There are several possibilities. The tenant may stop paying the rent, the tenant may not maintain the property or theymay violate the terms of the lease, such as allowing multiple families to move in or allowing pets to live in the home.

So what does the landlord do and what are your rights?

The first thing the landlord needs to do is to review the lease agreement. The lease agreement generally contains the terms by which the tenant agreed to abide. A properly prepared lease should contain the grounds for termination of the lease and the notice requirements for eviction, if the tenant does not respond to the notice.

It is also important to review the length of the lease agreement. If the end of the lease term is near, it might be easier to just send a notice to the tenant that the lease is not going to be renewed and the tenant will be required to leave the premises at the end of the contract.

There are many foreign nationals who lease property on a 30 year lease. One of the important elements of a 30 year lease is that it must be filed with the local land office. Under Section 528 of the Thai Civil and Commercial Code, if the lease agreement is not in writing, signed and registered with a ‘competent official’, then it is not valid for more than three years or the life of the parties.

After the end of the lease period, the lease agreement is generally extended for an indefinite period. This allows any of the parties to provide notice of termination of the lease with a minimum of one rent term or maximum of two months notice. If the tenant refuses to leave the property, the landlord can file a lawsuit against him.

If the landlord is able to establish in court that the tenant violated the terms of the lease agreement and that the landlord abided by the legal requirements for eviction, the court will rule in favor of the landlord, unless there are extenuating circumstances. If the tenant refuses to abide by the order of the court, the landlord can request an enforcement of the judgment.

The landlord can then request that police remove the tenant from the premises. They can also terminate electrical and water services to the property. It is important to note that the landlord cannot enter the property, remove the tenant’s belongings or change the locks on the door, unless it is allowed within the lease agreement, or with a court order.

During the entire legal process, the landlord can file a claim for the rental costs and opportunity costs as a result of the tenant refusing to leave the premises.

Leasing property is a popular way to obtain passive income or to pay for mortgaged property. However, as with any type of income-generating business, there are risks, especially in a foreign country. For landlords, there is the possibility of renting to tenants who do not maintain the property, violate the rules of the lease agreement or stop paying the rent.

The legal process for evicting tenants is painstaking and can take many months. It is important to scrutinise potential tenants and check their rental history and current financial status prior to entering into a long-term lease agreement.

Additional reporting by Yutthachai Sangsirisap.

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Koh Samui

Stunning new Lux Neo project at Chaweng, Koh Samui

The Thaiger

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Stunning new Lux Neo project at Chaweng, Koh Samui | The Thaiger

Sun, sea, new, views, pool villa, Samui. All the words you want to hear.

Lux Neo is now available, combining stunning sea views and outstanding modern design. Lux Neo is the newest award winning project by the “Neo” team with critiqued unique villa design and award winning styling. Click HERE to read more about the Neo design team and some of their other award-winning projects.

Stunning new Lux Neo project at Chaweng, Koh Samui | News by The Thaiger

This magnificent site offers a unique combination for in Thailand – inspired design, value, astonishing views and quality. Designer two or three bedroom villas are now available with sea views to Chaweng Noi and just minutes to the main attractions, beaches, shops, airport and the main Chaweng shopping and beach areas.

The “Lux” location is 18 Rai of premium Chaweng Noi sea view land with “Neo” being a private 12 plot residential development featuring the uniquely inspired villa style. The highly desirable location of Chaweng Noi is just 1 kilometre away from some of Koh Samui’s best beaches and restaurants.

Stunning new Lux Neo project at Chaweng, Koh Samui | News by The Thaiger

These luxuriously designed spaces include vaulted double height ceilings, mezzanine floors, large open airy spaces, modern terrazzo bathrooms and mezzanine bedrooms – all with breathtaking views of Koh Samui offering unparalleled design with nothing else like it in South East Asia.

Prices start from 8.8 million baht for the 2 bedroom villas ranging up to 12.5 million baht for the 3 bedroom villas.

Read more about the details of this stunning Samui development or make enquiries HERE. You will be able to find out a lot more information as well as compare the new Lux Neo to other projects in the area.

Find out more about Samui HERE.

Stunning new Lux Neo project at Chaweng, Koh Samui | News by The Thaiger

Go to property.thethaiger.com when you want to search for Thailand’s largest selection of properties.

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