By Andrew Batt
Bangkok’s office market continued to improve during the first quarter of 2012, according to a new research report published by CBRE Thailand.
Net new take- up was around 35,000 sqm while a total of 32,000 sqm of new Grade B office space was completed. The overall vacancy rate fell to 13.73 percent from 14.13 percent in Q4 2011. Grade A CBD vacancy rates fell to 18.33 percent from 20.51 percent from the previous quarter.
Prices rose too, with Grade A CBD rents increasing to an average of THB713 (S$28.95) per sqm per month, up from THB702 (S$28.50) per sqm per month in the previous quarter.
Nithipat Tongpun, Executive Director–Office, Retail and Industrial Services, CBRE Thailand, said in the report: “Companies are continuing to upgrade the quality of their buildings moving both from Grade B and from older Grade A buildings to newer Grade A offices. The argument for this is that more people can be accommodated in a smaller space because of the efficient floor plate, which means that tenants can get a better building for a similar total rent – even though the rent per square metre will be slightly higher. This should increase the take up of Grade A CBD space which will then push rentals up.”
CBRE Thailand noted that the main threat to the growth in office demand is a major external economic event similar to the 2008 global financial crisis. If such an event occurs, then all office expansion will be put on hold. If there is no big external economic shock or domestic political event, then the outlook for the Bangkok office market is positive, with the possibility of increased take-up, rising rents and limited new supply.
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