A number of new office developments are scheduled to open in Bangkok during 2016 and pre-commitment levels for space in these continues to be strong according to JLL. The demand for this space is being driven by large domestic and multinational companies looking to expand their office footprint and has been prevalent since 2013.
According to JLL, they have been faced with limited options in existing office spaces as vacancy rates in completed prime office buildings are near all-time lows. This has seen them book space in new buildings in record numbers.
G Tower on Rama IX Road will be finished in the third quarter of this year but more than 65 percent of the office space in development has already been pre-leased and Grand Canal Land, the project’s developer, is expecting pre-leasing to be near 100 percent when it does open. Krungthai-AXA Life Insurance PCL is G Tower’s first major anchor tenant and the deal represents the largest office leasing transaction recorded in Bangkok for 2015, JLL added.
“As most of the existing prime office buildings have limited space remaining, numerous large-scale lease negotiations are taking place at office development projects that are now under construction or have not yet become fully operational,” Yupa Sathienpabayut, director of office leasing at JLL, stated. “Most of these projects still have more space to accommodate large occupiers while lease terms are relatively more flexible, compared to completed prime buildings that are almost fully occupied.”
FYI Center, Rungrojthanakul Building and M Tower are a few of the other office developments scheduled to open in Bangkok this year. Each one has also recorded high pre-leasing totals. Some companies securing leases in new office development projects are looking to consolidate business operations. JLL pointed out that a number of businesses with units scattered in different locations are now wanting to consolidate their operations under one roof.
“Most of the companies that are considering consolidation of business operations are large multi-national corporates and require office space in well-located prime buildings,” Yupa explained. “This is good news for office development projects whose construction will be completed soon and which still have space to accommodate large tenants.”
