By Andrew Batt:
Despite a nine percent rise during 2012, office rental rates in Bangkok’s central business district remained the cheapest throughout the Asia Pacific region,
New research from CBRE revealed that Bangkok office rents rose to their highest ever levels in 2012, beating the previous 1992 peak. Average ‘Grade A’ rents in the CBD reached THB 770 per sqm per month. Park Ventures Ecoplex on Wireless Road became Bangkok’s most expensive office building, achieving rents of THB925 baht per sqm per month in 2012.
The total amount of office space in Bangkok reached 8.1 million sqm, while the overall occupancy rate was 88 percent – higher than the 86 percent seen at the end of 2011. Total net take up (the growth in the amount of occupied office space) was 160,000 sqmin 2012 compared to 83,000 sqm in 2011, demonstrating the increase in demand.
Some 45,000 sqm of new space was completed in 2012 and there is only 430,000 sqm currently under construction and due for completion before the end of 2015.
“There is limited choice of space in ‘Grade A’ CBD buildings,” said James Pitchon, Executive Director and head of CBRE Research & Consulting.
“Sathorn Square and Park Ventures Ecoplex, the two most recently completed ‘Grade A’ developments, are now 70 percent and 87 percent committed. Tenants wanting more than 3,000 sqm on consecutive floors have few choices.”
Despite the 9 percent increase in ‘Grade A’ rents, Bangkok remains the cheapest office location in the Asia Pacific region. Hong Kong was the most expensive location with prime office rentals of THB6,600 per sqm per month – more than eight times more expensive than Bangkok even though prime Hong Kong Rents fell by 18 percent during 2012. Of the 31cities in the Asia Pacific Region covered by CBRE Research, 20 cities saw rents rise while 11 saw declines.
CBRE predicts that demand for Bangkok office space will grow compared 2012, and because of limited new supply it expects rents will continue to rise – especially for ‘Grade A’ CBD buildings.
Asia Pacific cities ranked by average occupation cost (in baht, per sqm per month)
1 Hong Kong (Central), Hong Kong (6,650)
2 Tokyo (Marunouchi Otemachi), (5,326)
3 Beijing (CBD), China (4,994)
4 Mumbai (Bandra Kurla Complex), India (3,299)
5 Sydney, Australia (3,214)
6 Shanghai (Pudong), China (3,142)
7 Singapore, Singapore (2,826)
8 Seoul (CBD), South Korea (2,465)
9 Yangon, Myanmar (2,100)
10 Taipei, Taiwan( 1,851)
11 Ho Chi Minh City, Vietnam (1,685)
12 Jakarta, Indonesia (1,441)
13 Hanoi, Vietnam (1,423)
14 Auckland, New Zealand (1,339)
15 Kuala Lumpur, Malaysia (1,271)
16 Manila, Philippines (876)
17 Bangkok, Thailand (815)
Source : CBRE Research
Andrew Batt, International Group Editor of PropertyGuru, wrote this story. To contact him about this or other stories email andrew@allproperty.com.sg
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