With the new BTS extension from Saphan Taksin to Wongwian Yai already running, and the Bang Na extension nearing completion, investment potential along the new routes is coming to the fore, albeit complicated by the current market climate.

James R.  Pitchon, executive director, CB Richard Ellis (Thailand) Co., Ltd., told Property Report Thailand, "The mass transit system has completely transformed Bangkok, serving to refocus development to the city centre. The extension of the BTS lines is a welcome continuation of that trend.”

For the buy-to-let investment potential of new developments along the extensions some careful thought may be required. In the current market, where expats can now secure centrally located condos at reasonable prices, it is unlikely that units further along the line will appeal.

Even so, access to a station is a very valuable selling point. The Exchange Tower link at Asok is a good example of a long walkway having been built simply to provide easier access to a station.

Robert A Collins, managing director, Savills (Thailand) Limited, said."Land values immediately close to stations along the extended lines will rise the most rapidly. It doesn´t matter how far way the station is.”

The challenge may lie in taking advantage of any such price rises. Years before the first piles of the BTS extension broke ground, land speculators were already at work looking to second guess where completed lines would be. However with market conditions softening, speculation appears to have been relatively muted and so opportunities could still be present.

"Developers are land banking currently and so using a three to ten year outlook this is a good investment strategy.” Collins added.

The bias towards preparing for future developments suggests that project commencements may not be seen until some time in the future due to current market conditions. End users are also much more cautious than speculators.

"End users are used to delays in projects and so will only make a decision to buy when they are sure the project will be completed. Often this means committing only after they see the trains actually running.” Pitchon said.
With the high-end market under some pressure, the bias for any new developments will likely be towards the budget end of the market.

"Eighty per cent of the expatriate rental market remains in the Sukhumvit area and so developments along the extensions will be aimed towards small residential units for the local market." Pitchon added.

Even with rentals capped at lower levels, a reasonable yield could still be achievable. That’s because long-term rentals are more likely to be the order of the day with local workers looking to secure a cost effective solution to enjoy easy access to their place of work.

Christopher Heath, director, Soho Properties Co., Ltd. said, "New condo projects in addition to those already completed will likely come on line along the inner parts of the BTS extensions with the end line stations possibly suiting housing developments.”

The Metro Park Condominium is a good example of a project that has taken advantage of the new Saphan Taksin BTS extension. Located on the other side of the river, residents can now enjoy rapid transit times to Chong Nonsi Station and have direct access to the central business district along Sathorn Road.

Of the developments currently under construction, the Villa Sathorn makes good use of its prime location right next to the new Krung Thonburi BTS station. The 40 storey project will offer 660 units in ten various layouts from 38m2 to 155m2 and is scheduled for completion in early 2010.

The Saphan Taksin extension has had one extra effect. There is renewed interest in river view apartments that had previously been less sought after than the downtown area.

"Traditionally people have been put off with the time taken to cross the river but with the new BTS extension now complete, there are many new enquiries for river view properties.” Heath added.

Projects such as the 35 storey Supalai River Place Condo and the 37 storey Baan Sathorn Chaophraya Condo have both benefitted.

Away from the Saphan Taksin extension, there are those eyeing the Bang Na BTS extension and the areas around its new stations, which are taking shape rapidly.

"For the Bang Na extension it is important to remember that high end buyers are likely to be drawn to a number of International Schools in the area, and so this could provide quite an important hot spot along that stretch of the new BTS line." Heath said.

The Bang Na stations also provide good connection to the airport and to some fine golf courses and so this could certainly be a corridor of opportunity.

A number of projects have preempted the line’s completion. Much of the activity has been around the newly constructed Udom Suk BTS station. The 27 storey twin tower development of the Metro Avenue Sukhumvit Condo and the more conservatively sized My Condo Sukhumvit 103 are two examples of residential developments that have taken advantage of the new line in the area.

Overall, there appears to be no danger of oversupply entering the market due to the new extensions being completed.

"The market in general remains very quiet and an upward trend may not yet have established itself. Transaction volume has improved but levels are still lower than in previous years." Collins said.

Even so, prospective buyers are unlikely to benefit from bargain prices or steep discounts.

"Anyone holding out for steep price drops as has been seen in countries such as the U.K. and U.S. will be sorely disappointed - any such price drops are unlikely." Pitchon said.

Market conditions may well have turned out to be a positive force in this respect, providing stability and order to a property market that is in the process of encompassing these new areas.

Pitchon said, "The new BTS extensions are very positive indeed for Bangkok. They will open up areas of Bangkok and help the environment. The main thing that the government can do to ensure good economic growth is to build more train lines."