A condominium construction site next to a BTS route in Bangkok's Sathon area. PATTARACHAI PREECHAPANICH

Condos in the Silom-Sathon area are the new targets for investors, with annual return on investment for rentals of 5%, according to property consultant Plus Property.

Plus Property's real estate survey found that prices in the Silom-Sathon area are rising due to land value and condominium projects.

The most recent price for land in the area was found to be 1.45 million baht per square wah, with condominiums commanding prices of 200,000-300,000 baht per square metre.

The area's location as a business district, surrounded by offices of leading companies, famous schools, hospitals and government offices, has attracted both Thai and foreign buyers, homeowners and investors alike, with the rental market generating 5% annual return on investment, and the average resale prices rising 7% a year for the past five years.

Anukul Ratpitaksanti, Plus Property's managing director, said the survey identified the Silom-Sathon area as having high potential. Despite possessing limited land for development, the area is experiencing growth in condominiums, with a supply of 6,786 units available in the first half of 2017.

At present, the average price of Silom-Sathon condominiums is quite high because of limited land and continuous price increases, contributing to rising capital cost of investment for project development, according to the survey.

During the past three years, only five new projects were launched in the area, but these projects boasted average sales of up to 85% in the first six months of launch.

Property buyers comprise both Thai and foreign nationals, and include working professionals, parents of students studying nearby, local residents and investors.

Apart from the area being one of Bangkok's leading business centres with all the entailing amenities, it also has convenient transport links and easy access to top restaurants and shopping centres.

A condominium unit priced at 6.5 million baht can be rented out for 30,000 baht a month, providing an average 5% annual return on investment. The current average rental rates for Silom-Sathon condominiums located near mass transit lines is 700-1,000 baht per sq m.

For property purchased for resale, the survey found that during the past five years a one-bedroom unit commands a resale price of about 210,000 baht per sq m, while a two-bedroom unit has a resale price of about 200,000 baht per sq m.

Resale prices of projects have risen 7% per year since their launch, due in part to continuing increases in land prices, according to the survey.

The current land price in the area is 1.45 million baht per sq w, with the appraised price of land located on Sathon Road, especially near roads or mass transit lines, forecast to grow an average of 78% from 2008-19. Meanwhile, land prices on Silom Road are forecast to rise 53% during the same period.

"Although the Silom-Sathon area features convenient transport, including the BTS and the MRT, the number of mass transit users is growing every year, with information from BTS Group Holdings indicating BTS passengers growing an average of 3-10% per year," said Mr Anukul.

People working in this area want to live nearby to avoid growing congestion and cut travel costs. The area also has easy access to lifestyle venues, department stores and top restaurants, he said.