Mrs Nalinrat says the appeal of Thong Lor can be seen in average sales prices for high-end condos, which have reached 250,000 baht per square metre.

The condominium market in the mid-Sukhumvit area (from Sukhumvit Soi 21 to Ekamai Road) has shown continuous growth, with a surge in selling prices per square metre over the past five years, according to Nexus Property Marketing Co Ltd.

Average selling prices in this popular residential area of Bangkok have risen by 8.2% per year on average, followed by 7.2% in the Pathumwan-Ratchathewi area and 6% in the Sathon-Bang Rak area. Mid-Sukhumvit features a total of 191 projects with 43,418 units, 88% of which have been sold. Pathumwan-Ratchathewi has 135 projects with 38,912 units and Sathon-Bang Rak 86 projects with 20,385 units.

One of the most attractive locations in the mid-Sukhumvit area is Thong Lor, known for an abundance of famous restaurants, stylish cafes and small community malls. Local charm makes it a prime area for those who want to live in the city centre and for those who see a good opportunity to invest in and rent condos to Thais or foreigners, especially Japanese.

The appeal of Thong Lor can be seen in average selling prices for high-end condominiums, which have reached 250,000 baht per sq m, said Nexus managing director Nalinrat Chareonsuphong.

In reviewing sales records for 50 condominiums with a total of 11,386 units in Thong Lor between 2003 and 2018, Nexus found the average final price per sq m was 12% higher than the average when the projects were first launched. However, the average resale price was up 32% from the average opening price during the last 15 years.

From an investment perspective, sales prices of condominiums in Thong Lor have advanced at a faster pace than rental rates. Consequently, the investment yield in new projects may not be as high as in existing projects.

A survey of the condominium rental market in Thong Lor shows the average annual yield is between 3% and 6% with properties falling into three groups: high yield at around 6%, average at 3.8% and low at 3%. The differences reflect various factors such as location, price, unit size, common spaces, surroundings and extra services in each building. Nexus has identified three main factors for projects to achieve high yields of 5-6% as follows:

Location. This is the first factor everyone considers when they want to buy condominiums for investment. The project should offer ease of access, be near public transport, linked to main roads and surrounded by conveniently reachable stores and restaurants.

Services. Complete services have a strong impact on purchasing decisions. If projects can provide extra services such as shuttle transport or private taxis and coordination of housekeeping, car wash and repair service agents, they are likely to attract more attention from tenants.

Maintenance. This helps sustain a good image for a condominium. If a project has been open for a long time and is still in good condition, tenants will be more confident and will stay longer. Investors will see a higher return than at a newly launched project where they would have to buy at a higher average price.

Although the average yield in Thong Lor is modest at around 3.8%, rental demand in Thong Lor has never fallen and is stronger than in some other areas of the capital with higher yields.

Thong Lor is the expat centre of Bangkok, and foreigners, especially Japanese, like to live there because there are many restaurants, stores and amenities that suit the Japanese lifestyle. Therefore it's not surprising that Thong Lor has become a prime rental market.

"Thong Lor is an attractive location for property investment because there is high demand from foreigners who are looking for a place to rent and it offers more possibilities of obtaining a consistent return," said Mrs Nalinrat.

"In the Thong Lor area, the sooner you invest, the better the yield you will get in the future, as the average selling price keeps going up every year, so the yield could go lower."