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Bangkok Office with Highest Rents in new grade A Building, CBD area

By on Mar 30, 2012 in Property News

Bangok Office MarketView Q4 2011

At the end of Q4 2011, Bangkok’s office stock totalled 8,119,413 sq.m., of which 6,972,093 sq.m. was occupied, and the vacancy rate was 14.1%. There are 390,593 sq.m. of office space under construction, with completion scheduled before the end of 2014. Out of the 390,593 sq.m. of future supply, 232,005 sq.m. are grade A buildings.

The occupancy rate improved slightly to 85.9% from 85.6% in the previous quarter.

Demand actually increased in 2011 and we estimate that a net total of 82,798 sq.m. was taken up (the growth in the amount of occupied space) compared to 70,373 sq.m. in 2010. Rents are also rising; Park Ventures is now achieving rents of over THB 800/sq.m./month. We have not seen these rental levels since 1992.

In Q4 2011, the total net take-up for the whole market was 31,970 sq.m., up 18.5% Q-o-Q and 63.8% Y-o-Y.

The highest rents are in new grade A buildings in the CBD. In Q4 2011, average rents for grade A office space in the CBD rose by 1.7% Q-o-Q and by 3.2% Y-o-Y to THB 702/sq.m./month.

The main threat to the growth in office demand is a major external economic event similar to the 2008 global financial crisis. If such an event occurs, then all office expansion will be put on hold.

If there is no big external economic shock or domestic political event, then the outlook for the Bangkok office market is positive, with the possibility of increased take up, rising rents and limited new supply.

However, given the global economic situation, growth in demand will be slow and we do not expect a dramatic increase. Rentals will increase but they will do so steadily rather than suddenly spiking.

This is an extract from Bangkok Offcie MarketView Q4 2011, click to download the full report.

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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