Bangkok’s office sector continues to perform well as rental rates, supply, demand and occupancy all increased in the fourth quarter of 2015. The CBRE Thailand Bangkok Office Marketview report also predicted that rental rates in the office sector are likely to increase during this year.
The report noted that total office supply increased by 0.6 percent in the fourth quarter of last year with with two new offices being completed during this time. These were SET @93 Ratchada which is the new head office of the Stock Exchange of Thailand and Major Tower in the Thong Lor neighborhood. And while supply increased in the city, office vacancy managed to decrease ever so slightly by .2 percentage points. The overall office vacancy rate in Bangkok now stands at 8.6 percent.
A number of major office developments are currently being built in Bangkok’s CBD with the FYI Centre, The Metropolis and Gaysorn Office Tower (pictured) all scheduled to be completed by 2017. However, almost 50 percent of the office space scheduled to be completed has already been pre-leased. According to the report, 2015 was the first year tenants pre-leased space in buildings before completion since 1992. With high occupancy rates and a limited amount of supply scheduled to come onto market, companies are having to act quickly to lock up office space in prime locations.
Rents rose in the fourth quarter in all of Bangkok’s major office segments. CBRE pointed out that Grade A CBD office rents rose by 1.9 percent in the last quarter and 5.5 percent y-o-y while grade B CBD rents increased 0.9 percent for the quarter and 5.1 percent y-o-y. However, it was Grade B rents outside the CBD that saw the biggest increase when compared to the same period last year. These jumped up 1.5 percent during the fourth quarter and have risen 8.7 percent y-o-y.
