With a more positive political outlook, the Bangkok office market is beginning to see a move forward and growth in demand and rent, following a period where the market has been held back due to the combination of the global crisis and Thailand’s political uncertainty, according to a leading property consultant CB Richard Ellis CBRE.
Whilst office demand has been slow, the market as of Q2 2011 was more active with clearer signs of expansion from existing tenants and a marginal increase in occupancy rates from the previous quarter to 86.5%. CBRE’s office enquiries were up 34.2% q-o-q, an upswing indicating the market is heading towards the right direction.
An analysis of CBRE’s office enquiries also shows that 59% of enquiries involved an expansion, indicating that the key demand driver is from the expansion of existing businesses and space requirements from existing tenants rather than demand from entry of new multinational companies (MNC’s). Key growth industries in the past several years have been in the service and consultancy sectors.
The trend of expanding businesses and space requirements is expected to continue and with limited new supply coming to the market, rents will increase. In 2011, Park Ventures Ecoplex and Sathorn Square are the only two Grade-A CBD office buildings to be completed, adding approximately 100,584 sq.m. to the office supply. The only other new Grade-A CBD building currently in the construction pipeline is the UBC III building on Sukhumvit 35 which will offer 50,200 sq.m. of lettable space and is due for completion in Q1, 2014.
Is There a Silver lining amid COVID-19?
Thinking of the future impact of this pandemic on office buildings, it may have already dawned on many of us that a majority of potential long-term trends and health measures will become permanent work-life features in the times to come.
The time is ripe to embrace Industry 4.0
Traditional brick-and-mortar retail has suffered tremendously, as countries have been implementing effective stay-at-home and social distancing policies to mitigate virus spread, while those worst hit have enacted strict draconian lockdowns
We have entered a time where, seemingly, interconnectedness is the new enemy, staying in is the new going out, and antisocial is the new social. COVID-19 has brought us on the cusp of growing accustomed to new norms and sounded a wake-up call in terms of how we live.
Covid-19 puts flexible space markets under strain
In the wake of operator defaults, landlords will be forced to re-evaluate the role of flexible space in their portfolios.
The global Covid-19 outbreak has had serious negative effects on commercial real estate, including flexible space. Of late, many operators have experienced the flexible nature of the business working against them, as many occupiers have opted to surrender desks and implement work-from-home plans.
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