In every established property market, the super prime properties are a segment on their own. Super prime properties do not follow the mass market, neither do the super rich buyers whose criterion and judgement are far removed from the general market trends. London, for example, clearly reflects this. While the majority of the UK market has not recovered back to its peak, the super prime market has continued with its own momentum and doesn’t track the general overall market.
Transactions and prices are driven by strong demand from international investors from Russia, China, India and the Middle East for a limited and specific super prime stock. London has traditionally been the most sought after global property market and one which has proved to be a good long-term investment. London offers super prime projects such as One Hyde Park which in itself attracts affluent international investors.
While elements of the Bangkok property market are experiencing a glut of supply and their prices are flat, Bangkok lacks variety in the super prime market. My definition of super prime properties is those priced over THB 200,000 per sq.m. with an outstanding location, quality and facilities. In late 2007, The Sukhothai Residences was the first super prime property to sell off plan and attracted both elite Thai and foreign buyers. After the global crisis, the market for luxury properties declined globally, but demand is now rebounding. In Bangkok, we have recently seen a few more super prime projects being launched off-plan including The Ritz Carlton Residences and the St. Regis Residences which is completed.
Many people tend to raise the question why these properties command a price premium over and above the market average of THB 125,000 to 150,000 per sq.m. for other high-end condominium projects, and how strong the demand is for super prime properties in Bangkok. My answer is yes, demand is strong, but only if the projects tick all the right boxes which is expected from a super prime project by international standards.
Location is undoubtedly the most important factor. From an international perspective, Bangkok is a popular tourist destination and a regional hub in Southeast Asia. Location wise, the prestige addresses in the CBD which are well connected with an upmarket surrounding are the most desirable. The areas which can compare to Manhattan in New York and Knightsbridge in London will be the areas commanding the premium. One key criteria for location includes uninterrupted spectacular views such as Lumpini Park or the skyline which can add value and premiums. However, it is important to ensure that if all units do not face the main views or are on low floors, they are offered alternative views such as pool or landscaped gardens.
Iconic designs and celebrity architects often go hand in hand with super prime properties. While it is difficult to attribute the percentage of premium generated by a celebrity architect, they often add intrinsic value to the project in addition to design values. The quality of design and functionality is ensured and in many instances the projects become a landmark itself. For example, Mahanakorn where the Ritz Carlton Residences is located boasts a cutting-edge building design by OIe Scheeren. Interior design, whilst subjective in its appeal, must also be the right style and reflects the project’s character and express the feel of luxury through the design, use of quality materials and workmanship.
Along with the design, quality specifications are mandatory for super prime projects and an aspect which developers cannot compromise on. Buyers of super prime properties will expect a level of quality and the latest technology to be incorporated. The use of premium brands for sanitary ware, kitchen cabinets and fittings, appliances and branded furniture, for example, will convey a sense of quality.
Branding is another aspect which is closely associated with super prime projects, from the use of five-star hotel operators, the architect which sometimes is a brand itself, or a developer such as Aman which is an internationally known developer and hotel chain. In Bangkok, most super prime projects to date are associated with five star hotel chains, The Sukhothai, Ritz Carlton and St.Regis. The use of a brand guarantees a level of service and property management which ensures the property upkeep and value appreciation.
The project scale also directly impacts exclusivity. Most successful super prime projects globally feature under a 100 units. Low density and exclusivity are mandatory for the super rich market. However, the number of units will also depend on factors such as pricing, market conditions, planning regulations and financial feasibility.
Lastly, the services and amenities offered by the development must also exceed the basic amenities offered in other projects. Facilities such as a sizable pool and gym, steam and sauna rooms are expected, but to achieve the premium, super prime projects must offer the additional extras such as a spa, private lounge and concierge services.
All the above factors are achievable, but Thailand needs to work on construction standards and workmanship as many luxury projects today still suffer from defects and delivering flawless quality is essential for super prime properties. Buyers for super prime properties are driven by preference in choice rather than price and if all the key criteria have been met, I believe there is room for more super prime properties in Bangkok. The challenge in selling super prime off plan is in conveying the level of luxury and quality as attributes such project facilities, services and the overall atmosphere are not tangible until project completion.