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Bangkok Office Rental Market Grew Continuously in Q2 2013

By on Sep 09, 2013 in Research

Bangkok Office Rentals MarketView, Q2 2013

Bangkok office for rentThe total amount of completed office space is 8,100,000 square metres.

The overall vacancy rate is now 11.1% and Grade A CBD vacancy is 11.8%.

Total net take-up in 2012 was 160,000 square metres. Total net take-up in Q2 was 51,000 sq.m. The total net take-up of the first of 2013 was 86,000 sq.m.

There were no new completed office buildings during Q2 2013. Around 450,000 square metres of space is expected to be completed in all areas over the next three years. Around 25% of this space will be owner occupied and there will be only two new CBD grade A buildings.

Overall, 7,200,000 sq.m. of space was occupied in the Bangkok office market, up by 0.6% Q-o-Q and 2.2% Y-o-Y. The occupancy rate improved slightly to 88.9% this quarter,  from  88.3%  in  the previous quarter.

Office rents increased for both grade A and grade B offices in CBD and non-CBD areas. The highest rents are in new grade A buildings in the CBD. In Q2 2013, average rents for grade A office space in the CBD rose by 1.4% Q-o-Q and by 8.7% Y-o-Y to THB 798 per square metre per month. We expect rents will continue to grow but at a slower rate.

At the moment the spread between average CBD Grade A rents, THB 798 per square metre per month and Grade B non CBD rents, THB 523 per square metre per month is only THB 275 per square metre per month.

If  CBD  Grade  A  rents  rise  at  a faster rate than non CBD Grade A rents and the land component rises as  percentage  of  total  CBD development  costs  then  this  could provide  opportunities  for  Grade  A non  CBD  development  where  due to lower land costs developers can make  a  return  on  non  CBD developments  even  though  the rental is lower.

This is an extract from Bangkok Office MarketView Q2 2013, click to download the full report at Bangkok Office Marketview.

Toby has been living in Bangkok for a number of years and has a strong research background. With his years in Thailand Toby brings a wide range of property knowledge to his research writing

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