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Bangkok Office Rents Continue to Rise Q1 2014

By on Jun 18, 2014 in Research

Bangkok Office MarketView, Q4 2013

Bangkok Office MarketView Q1 2014Overall, 7.39 million square metres was occupied, up by 0.8% Q-o-Q and 3.4% Y-o-Y. The occupancy rate improved to 90.8% this quarter, from 90.4% in the previous quarter.

Office rents increased for both grade A and grade B offices in CBD and non-CBD areas. The highest rents were in new grade A buildings in the CBD. In Q1 2014, average rents for grade A office space in the CBD rose by 1.5% Q-o-Q and by 5.7% Y-o-Y to THB 832 per square metre per month. We expect rents will continue to grow but at a slower rate as office buildings that command a premium rent are already full.

At the moment the spread between average CBD Grade A rents, THB 830 per square metre per month and Grade B non CBD rents, THB 540 per square metre per month is only THB 290 per square metre per month.

We saw that some grade B CBD offices located near mass transit stations achieved higher rents than those of grade A CBD offices located farther away from mass transit stations.

OUTLOOK

We still expect that future demand will exceed new supply which will push up rents. As of Q1 2014, average achieved rents in Bangkok increased between 4% – 8% Y-o-Y in every grade and every area.

RECOMMENDATIONS AND ADVICE

Despite the political turmoil there is a greater probability that rents will rise rather than fall.

Tenants looking to renew should commence negotiations earlier rather than later.

This is an extract from Bangkok Office MarketView Q 2014, 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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