BANGKOK OFFICE RENTS REACH RECORD HIGHS
Bangkok, 30 May 2018 – Grade A Central Business District (CBD) office rents rose by 3.1% Y-o-Y to new record highs in the first quarter of 2018 and this trend is expected to continue, according to CBRE Research, a leading international property advisor.
Average rents for grade A CBD buildings were just under 1,000 baht per square metre per month and a new record of 1,500 baht per square metre per month was achieved in Gaysorn Tower, according to CBRE’s latest Bangkok office report.
The total take-up was 65,000 square metres in Q1 2018, increased by 15.1% YoY led by the completion and owner occupation of the new Bank of Ayudhya Building (Krungsri Ploenchit Tower) on Ploenchit Road and Thai Rath’s new building on Viphavadi Road.
The overall vacancy rate fell to 7.3% and is expected to remain at a low level for the next three to four years.
Around 750,000 square metres of office space is under construction including the first phases of One Bangkok and The Parq, both on Rama 4 Road, with completion dates between now and the end of 2022.
CBRE Research forecasts that the growth in demand will match new supply for the next three years.
The direction of the market from 2022 onwards is much harder to predict. There is potentially around two million square metres of new office space being planned on sites that have been acquired by developers but where construction has not yet started.
The question is how much space will be completed in each year after 2022 and we will only know the answer to this when construction starts on these planned projects.
Four co-working space operators will open in a number of grade A CBD buildings in Bangkok this year.
“Globally, there is a trend for some companies choosing to acquire office space as a service from co-working space operators rather than commit to lease and incur a capital expense in fitting out. Co-working space is not just aimed at start-ups and co-working space operators will be competing with landlords offering offices on traditional lease terms,” said Ms. Roongrat Veeraparkkaroon, Director of Advisory and Transaction Services – Office, CBRE Thailand.
Despite this disruptive change in the office leasing market, CBRE Research forecasts the net take-up in 2018 will be similar to that of 2017.
Some of the key new office developments that will be completed in 2018 are the 60,000-square metre Singha Complex at the Asoke/Phetchaburi Intersection, the 40,000-square metre MS Siam at the Rama 3/Industrial Ring Road Intersection, the 22,000-square metre T1 Building at Thonglor BTS Station, the 6,000-square metre Ladprao Hill at Ladprao MRT Station and the 5,000-square metre Summer Hub at Prakanong BTS Station.
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