Office rental prices in Bangkok are still trending upward according Knight Frank. The firm’s Asia-Pacific Prime Rental Office Index reported that rental prices are forecasted to grow in the next 12 months but the price increase will slow down from what it has been over the past year.
Knight Frank’s research showed that there has been a seven percent increase in Bangkok’s prime office rental rates year-on-year but that number has shrunk rapidly during the last three months and now sits at 0.2 percent. The index focused on the city’s Central Business District. It was noted that a significant number construction projects featuring office space will be completed in the near future but the new buildings are mostly located outside the CBD and will have little to no impact on prices in prime locations.
In other prime office rental news around the region, Phnom Penh continues to see growth in rental prices with a healthy pick-up in net absorption helping to keep the market moving forward, the report stated. Prices in Phnom Penh have increased 5.1 percent year-on-year.
The outlook was less rosy for ASEAN heavyweights Jakarta, Kuala Lumpur and Singapore. All three have struggled due in part to a challenging external trade environment and strong future supply which has negatively affect the prime office rental market in each city. Malaysia also struggled because its currency, the Malaysian Ringgit, has become one of the worst performing currencies in Asia. In Singapore, more and more companies are tightening their budgets and are looking for cheaper rents in office spaces outside the CBD.
The reported added that Tokyo led the way in this category and saw the highest prime office rental growth in the region for the second consecutive quarter. Going forward, Knight Frank said it expects rents in 13 Asian-Pacific markets to either increase or remain steady over the next 12 months.
