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Q1 2010 Total Office Supply in Bangkok Down 0.1% Q-o-Q

By on Jun 21, 2010 in Office, Research

Bangkok Office MarketView Q1 2010

The total office supply in Bangkok was 7,978,543 sqm., down 0.1% Q-o-Q and up 1.5% Y-o-Y (it should be noted that there was a reclassification of buildings and readjustment of total net lettable office areas to reflect current usage). No new supply was completed in this quarter.

As of Q1 2010, overall take-up in the Bangkok office market was 6,832,801 sqm., up 0.7% Q-o-Q and 1.2% Y-o-Y. The total occupancy rate also improved slightly from 85% to 85.6% in this quarter.

The vacancy rate was 14.4%, a fall from 14.9% at the end of 2009.

In Q1 2010, the overall rents dropped for the fifth consecutive quarter, since the beginning of 2009. Grade A offices in the CBD area faced a 0.3% Q-o-Q and 3.8% Y-o-Y drop in rents, down to THB 683/sqm. in this quarter from THB 685/sqm. in Q4 2009.

In terms of net take-up, Grade A Non-CBD posted the highest level of net new take up with 22,027 sqm., mainly due to the movement of the Energy Complex’s tenants. Total net take-up stood at 17,481 sqm., which was up 17.1% Q-o-Q and 103.1% Y-o-Y.

In general, demand for office space remained weak during Q1 2010. Demand, particularly from multinational corporations, is likely to remain weak throughout the year.

Two office buildings are scheduled to complete this year which are Sathorn Square (73,584 sqm.) and Sivatel (5,880 sqm.) in 2010. In 2011, Park Ventures (28,000 sqm.) and KPI Head Office (11,010 sqm.) will be completed. All of these buildings are located in the CBD area.

Supply will continue to be limited in the coming years with only two Grade A CBD office buildings—Sathorn Square and Park Ventures—due to be completed. Due to the lack of any other new supply, these projects are expected to be able to attract tenants when demand recovers. In the current climate however office rentals are expected to stay flat over the next six months or may fall further as landlords compete to retain tenants and fill vacant space.

This is an extract from Bangkok Office MarketView Q1 2010, click to download the full Bangkok office 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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