During the past 12 months, Bangkok market has been experiencing the launching of several new Grade A office buildings. Within the Central Area of Bangkok, at least 5 new grade A office buildings were completed and launched from Q3 2018. The recent new completed office space additionally creates almost 200,000 Sqm into the Bangkok office space supply, representing approximately 10% increase of the supply. The new supply making the office market more lively and more competitive.
Mr. Teerawit Limthongsakul, Managing Director of Nexus Real Estate Advisory (NEXUS) said, “In Q3 2018, there were approximately 2.34 million square meters of Grade A office spaces in the inner and central Bangkok area. Since then, more 5 grade A office buildings were completed which accounted almost 200,000 square meters, up almost 10% Y-O-Y. We are foreseeing at least 10-13 new grade A office buildings, with approximately 350,000 Sqm, to be introduced into the Bangkok market during the next 24 months.”
The recently completed 5 grade A office buildings (during October 2018 – September 2019) include Singha Complex, 101@True Digital Park, T-ONE, MS Siam and Samyan Mitrtown. Most of the recently completed office buildings are located in a very prime location, with convenient access to the BTS/MRT stations.
The recent 12-month new supply has made the overall occupancy rate slightly dropped from 96% Q3 2018 to 95% Q3 2019. The average rental rate of Grade A office has been consistently increasing from THB 960/Sqm/Mo to THB 1,025/Sqm/Mo, or approximately 7% increase Y-O-Y. This is quite a strong statement showing that the office market in Bangkok is still in a good situation.
In addition to the new office space during the past 12 months, there will be approximately 10 – 13 grade A office buildings to be completed and launched during the next 24 months. All new buildings will include THE PARQ, Silom Center, Siam Scape and O-NES Tower. These buildings will add up another 400,000 Sqm into the market for the next 2 years. “It is anticipated that the grade A office buildings will be significantly increased with approximately 1 million sq in the next 5 years,” Mr. Teerawit said.
“The newly good quality supply is making the office market more lively and more competitive, after the grade A office supply in Bangkok was limited and stagnant for more than 2 decades. All multi-national corporation (MNC) tenants will have more choices to choose instead of keep suffering with some unpleasant location, old/obsolete office facilities, or poor management landlords. This would be a good wake-up call for all the existing office buildings, with old quality and poor management, to do something new, such as big renovation, with their office buildings to make them competitive with all the new coming grade A office buildings” Teerawit said.
However, to create such a good quality product, it is a challenge to develop the right product today but serve the market in a year later or even 2-3 years for a big project. The developer needs to find a sweet spot of the product such Samyan Mitrtown which was the latest office space launched into the Bangkok market. It is introduced as a smart & ecofriendly mixed-uses building, comprised of an office tower, condominium, hotel and retail complex. The Mitrtown Office Tower comprises with 31 floors office space, with a total rentable area of approximately 48,000 Sqm. It is located at the corner of Rama 4 – Phayathai Intersection, and is directly accessible via the MRT at the Samyan
Station. “With the excellent location, grade A quality product, and its fully equipped facilities in the compound, the Mitrtown Office Tower is anticipated to be fully occupied within a short period of time” Mr. Teerawit added.