Bangkok Office Market in Demand
Demand in the Bangkok office market had increased outstandingly in comparison to 2007. This was shown by the increased number of lease transactions listed over the first four months of 2008. Though, the largest part of these transactions were determined in secondary grade buildings or in secondary places, representing renters increasing understanding on the subject of occupancy prices, as stated by Jones Lang LaSalle, a proficient services firm specializing in real estate.
Caroline Murphy, Head of Marketing at Jones Lang LaSalle, said “Following the development of the new government a vigilantly optimistic attitude for Thailand’s economic growth in 2008 has succeeded. Motivating steps from the new government have boosted assurance levels very high. As a result Companies have started business development plans and are thinking of rearrangement. Several companies are also trying to take benefit of near term tenant-favorable market stipulations because of awaiting completion of a major number of new buildings enhancing preferred area accessibility in the market. This is quiet different from the past 2 years where supply limitations offered restricted prospects for medium to larger sized office occupiers to change place.”
As per the recent research by Jones Lang LaSalle, the entire stock of office supply in Bangkok is approximately 7.5 million sqm. The usual vacancy rate decreased from 14.1% in January 2007 to the current rate of around 13.6%. Prime grade office rents were in tune decreasing to THB 652 per sqm per month till April 2008 from THB 656 per sqm in January 2008. Moreover, standard rents for non-prime grade office space decreased slightly to THB 508 per sqm per month in the first quarter of 2008.
Encouraging rent conditions for renters are being obtainable to occupiers with stipulations having been relaxed to some extent in the recent past. With fresh supply moving inside the market in the coming 12 months, attractive prospects to lock in value on both fresh and on hand high quality space are abundant.
However, the effect of the US slowdown on the worldwide economy, increase in the steady fuel price and afterward the increase in the cost of living continues to be the greatest anxiety. Therefore, companies are very alert at the time of expansion. The greatest issue in the expansion remains management of occupational prices.
Caroline Murphy, Head of Marketing at Jones Lang LaSalle, said “Following the development of the new government a vigilantly optimistic attitude for Thailand’s economic growth in 2008 has succeeded. Motivating steps from the new government have boosted assurance levels very high. As a result Companies have started business development plans and are thinking of rearrangement. Several companies are also trying to take benefit of near term tenant-favorable market stipulations because of awaiting completion of a major number of new buildings enhancing preferred area accessibility in the market. This is quiet different from the past 2 years where supply limitations offered restricted prospects for medium to larger sized office occupiers to change place.”
As per the recent research by Jones Lang LaSalle, the entire stock of office supply in Bangkok is approximately 7.5 million sqm. The usual vacancy rate decreased from 14.1% in January 2007 to the current rate of around 13.6%. Prime grade office rents were in tune decreasing to THB 652 per sqm per month till April 2008 from THB 656 per sqm in January 2008. Moreover, standard rents for non-prime grade office space decreased slightly to THB 508 per sqm per month in the first quarter of 2008.
Encouraging rent conditions for renters are being obtainable to occupiers with stipulations having been relaxed to some extent in the recent past. With fresh supply moving inside the market in the coming 12 months, attractive prospects to lock in value on both fresh and on hand high quality space are abundant.
However, the effect of the US slowdown on the worldwide economy, increase in the steady fuel price and afterward the increase in the cost of living continues to be the greatest anxiety. Therefore, companies are very alert at the time of expansion. The greatest issue in the expansion remains management of occupational prices.
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