In its latest research real estate firm Knight Frank has revealed a 2.1 percent rise in overall office rental rates during the last year.
As of Q2 2014 there were approximately 4,555,271 sqm of office space in Bangkok. A total of 87,898 sqm of new supply saw occupancy rates in Q2 2014 increase to 91 percent from 90.6 percent in Q1.
The firm noted that overall office rents increased by 2.1 percent year-on-year, reaching THB 630 per sqm in Q2 2014.
There will be approximately 307,723 sqm added to the supply from Q3 2014 to 2017, of which the new office supply in the central business district (CBD) will reach just 72,048 sqm. New supply in non-CBD areas will be 235,675 sqm.
The overall average rental rate was THB630 per sqm, representing an increase of 2.1 percent year-on-year, from THB 617 per sqm this time last year.
Average rental rates increased in all segments, with the highest rise being in the Grade ‘A’ CBD segment which commanded approximately THB 823 per sqm.
The highest asking rate was at Park Venture, which commanded THB 1,100 per sqm during Q2 2014, and this was followed by Exchange Tower at THB1,000 per sqm.
Marcus Burtenshaw, Executive Director, Head of Commercial Agency, Knight Frank, pointed out the upward adjustment of office rents in Bangkok which has been lower than the change in the inflation rate.
He attributed this to various factors, such as the global economic climate and political instability in Thailand which have dampened demand, but as stability returns we expect office rents to increase as demand could exceed the limited new supply.
Going forward the prospects of the office market are bright, according to Knight Frank.
Its research shows there is approximately 400,000 sqm of office space available to rent with approximately 300,000 sqm expected to be added over the next three years, most of which located outside of the established central business district.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
