Serviced apartments are likely to have an oversupply this year due to a sharp rise recently in supply against low demands caused from the economic recession and the impact from last year's airport closures, according to the property firm Knight Frank Chartered (Thailand).

The company's research indicated that this year about 12% more new supply or 1,500 apartment units would be added to the market, which last December had 12,949 units.

However, demand dropped in the second half of last year to 75% of total available units or 9,659 units. The occupancy rate dropped from 82% in the first half of the year when there were 12,565 units available.

The slowing demand had pushed down the average rental rate per square metre of five-star rooms in the central business district and Sukhumvit to around 1,360 to 1,370 baht a month as of the end of December, between 3.3% and 3.9% lower than in the first half.

In the four-star market, the rates in the CBD and Sukhumvit areas stood at 987 and 991 baht per sq m per month, down by 4.6% and 4.9% respectively from the first half.

The company anticipates that occupancy rates and rents would decline further this year following market demand but the situation may improve when politics stabilise and government policies improve economic conditions and investor confidence.

source : www.bangkokpost.com