Learning about the real
estate business in Bangkok
from a foreign entrepreneur (05-06-08)
By Jon Fernquest
More foreigners doing business in Thailand means
more business ideas and technologies for Thais to learn from, choose
from, and adopt both for domestic production and for export markets.
This is at least one way of looking at foreign business in Thailand, a win-win situation, rather than a win-lose situation.
This week Bangkok Post reporter Nina Suebsukcharoen interviewed Wez Barber, the managing director of Bangkok Finder a new high-end real estate agency in Bangkok. Wez Barber started up a successful home repair and renovation business in Bangkok that he later sold to his business partner.
During the interview he
talks about his business experiences doing business in Bangkok and the
ways he hopes to differentiate his new real estate
agency from others.
Mr Barber tells an interesting little story of how his renovation firm made use of the common shophouses that line Bangkok streets. One of his firm's strategies was to buy four or five shophouses, tear down the walls, and build a small shopping arcade or hotel.
Yaowarat [Chinatown] shophouses are just too expensive for this strategy nowadays, but it's still possible to buy shophouses towards the end of Sukhumvit Road in Bangkok (e.g. Soi 120) for about two million baht. Mr. Barber suggests that the shophouse could be renovated and turned into a studio loft apartment and rented out for 10,000 to 12,000 per month.
Mr. Barber has already planned out a business strategy for his new real estate agency. The agency is planning to focus on rentals for foreign expatriate executives working in Thailand and not on the real estate sales that most real estate agencies focus on. The firm is also focusing on the wive's of ex-pat executives, not the executives themselves. The wife usually takes care of finding a place to live for their busy husband. The location is often chosen near the school that their children will be attending. The many international schools in the Bang Na-Srinakarin area (Bangkok Pattana on Soi LaSalle, St Andrews on Soi Baring, others on Srinakarin Road) has increased demand for housing in this area with house prices generally over 40,000 baht per month.
Mr Barber also plans on providing much more personalised and speedier service to clients than the larger more established real estate companies provide. Part of this strategy is to provide service in different languages. Westerners and Indians may have good English language skills, but winning Chinese and Japanese clients requires the ability to speak their native languages. In the case of the Japanese, better deals on rental prices can be offered, since Japanese typical end up paying a 20% premium over market prices to their real estate agencies.
Mr. Barber also sketched out some of the basics of the Bangkok expat rental market during the interview. The high end of the expat real estate market is 100,000 baht per month and above. The mid-range is between 50,000 and 100,000 baht. The low end is from 20,000 to 50,000 baht. Right before the new school year starts in August there is a heavy turnover of expats moving in and out of their rental units. Since expat housing allowances are given in US dollars and the dollar has been losing value recently, these allowances do not buy as much as they used to. The Sukhumvit area is usually the first choice with the Silom-Sathorn Road area second choice.
Condos at the low-end of the market have been getting steadily more and more expensive. It is hard to find even the smallest studios in the central Sukhumvit area for under 30,000 per month since condo prices have increased recently from 50,000 baht a square metre to as much as 70,000 to 80,000 baht. Only when you move down Sukhumvit Road a bit to Phra Khanong is it possible to find studios as low as 10,000 baht per month. At the extreme low-end of the market, below 15,000 baht, it is better for renters to deal directly with owners who usually don't want to deal with real estate agents.
The real estate market that Mr. Barber is entering may soon be saturated, so aspiring Thai real estate agents might do well to look to one of Thailands many growing provinces, such as Chiang Mai or Chiang Rai, for their future careers and businesses. (Source: Bangkok Post, business, 05-06-08, page B10, temp-link)
(Photo at top of page is of shophouses in Bangkok)
Vocabulary:
a win-win
situation -
a situation where everyone can win, where there is no loser (See habit
number four of the Seven
Habits of Effective People)
สถานการณ์ที่ทุกฝ่ายได้ประโยชน์
a Managing Director (MD) - the chief executive of a
limited company, both a member of the Board of Directors as well as the
senior manager in the company (See Wikipedia) ผู้อำนวยการบริหาร
high end - most expensive ราคาสูงมาก
mid-range - priced in the middle
ราคากลาง
low end - least expensive น้อยกว่ามาก
a real estate agency - a company that helps people
buy, sell, and rent property (See Wikipedia) นายหน้าที่ดิน
start up - begin a new business
เริ่มธุรกิจ
renovation - repairing and improving an
old building, putting it back in good condition การฟื้นฟูบูรณะ
a business partner - a person you are doing
business with หุ้นส่วนธุรกิจ
differentiate, product
differentiation
- make a product different from other products to attract customers
สร้างความแตกต่าง
shophouses - the building you see most
often on the streets of Bangkok, with a shop on the first floor, and a
living area on the floors above (See photo at top of page) ร้านค้า
strategies - long-term plans for success
in competition กลยุทธ
tear down - destroy and remove
completely รื้อถอน
a shopping arcade - a covered area where there
are shops and stalls selling goods, a small shopping mall ห้างสรรพสินค้า
a studio, a studio
apartment -
a small apartment with living room, bedroom and small kitchen all in a
single room, bathroom separate (See Wikipedia) ห้องพัก
ที่มีขนาดเล็กห้องเดียวไม่มีการกั้นห้อง
a studio loft apartment - (See Wikipedia
on loft apartments)
focus on Y - deal with this one topic Y
and not other topics ให้ความสนใจ
foreign expatriates,
ex-pats -
foreigners who live overseas, outside of their own country for long
periods of time ชาวต่างชาติที่ตั้งรกรากในประเทศอื่น
executives - a high level manager in a
company (making plans and ensuring they executed successfully) ผู้บริหาร
attend school - when children go to school
everyday to learn เข้าโรงเรียน
personalised - design especially for the
needs of a customer ทำตามที่ลูกค้าต้องการ
clients - (formal) customer ลูกค้า
established - has existed for a long time
ก่อตั้่ง
Westerners - Farang, people from western
countries such in Europe, the US, Australia, New Zealand, etc
ชาวต่างชาติ
a native language - your first language, the
language that you spoke when you were growing up ภาษาแม่
heavy turnover - how quickly people come and
go (enter and leave a place) มีคนลาออกอย่างมาก
a saturated market - a full market, new
customers difficult to find, because there are many products
already
aspire to do Y - have a strong desire to do
Y มีแรงบันดาลใจ
aspiring real estate
agents -
peope who want to be real estate agents
a career - doing a kind of job or a
profession (doctor, lawyer, architect) over the whole period of your
life ที่ทำเป็นอาชีพ