Real estate costs are no longer the main priority for companies thinking about office relocation, according to real estate experts. Many businesses have new priorities that are changing their relocation needs and efforts away from solely being about costs.
“Previously, when office rents rose dramatically, many corporations in prime office buildings relocated to a new building for cost saving. Today, office rents have continued to rise and many companies are relocating. But the relocations are driven more by the lack of space in existing prime buildings that does not allow occupiers to expand,” says JLL Head of Office Leasing Yupa Sathienpabayut to the Bangkok Post.
At the moment, there is 8.9 million square meters of office space in Bangkok with approximately 3.2 million square meters of this supply in prime-grade buildings. The average vacancy rate in this sector is a little over 6 percent with an estimated 192,000 square meters of prime office space empty in the city.
“While 192,000 square meters might sound significant, the number comprises small vacant spaces scattered on different floors in various buildings across the city. This explains why it is challenging for large companies to expand their existing offices and why many of them are relocating to other prime buildings that may have larger continuous space available after previous tenants moved out,” says Yupa.
A total of 554,000 square meters of new lettable office space will be completed between 2018 and 2021, according to the JLL Thailand Property Intelligence Centre. However, until this space comes into the market, many businesses will have to find ways to work around this.
“For now, companies that have to hire more people and stay where they are will have no other choice than putting a stronger emphasis on efficiency, using different methods from providing a smaller workspace for staff, reducing enclosed private offices, centralising meeting rooms and areas, utilising of outside storage and introducing a phone-booth room, to having a mobile workplace or hot desks,” concludes Yupa.
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