Connect with us
Longan Hopeland

Real Estate

How Bangkok Office Market Will Change by 2022

Although there is a lot of space under construction, most of it will be completed after 2021, meaning options will remain limited between 2019 and 2020

Daniel Lorenzzo

Published

on

Bangkok office supply totaled 8.95 million square metres at the end of Q1 2019, increasing by 1.9% Y-o-Y, according to CBRE Research.

Three office buildings were completed with a combined net area of 78,000 sq. m.; True Digital Park, MS Siam Tower, and Ladprao Hills.

The overall vacancy rate increased from 6.6% in the previous quarter to 7.5% in Q1 2019. The total net take-up (growth in total occupied space) was at 41,000 sq. m., decreasing by 36.1% Y-o-Y.

Future office supply continued to rise in Q1 2019 with construction starting on six more projects. Around one million sq. m. of new office space was under construction, increasing from 0.87 million sq. m. the previous quarter. This new space will be completed between Q2 2019 and 2022.

About 60% of total space under construction in Bangkok will be Grade A office space for rent in the CBD including Mitrtown Office Tower, The PARQ (Phase 1), Vanissa Building, the Unicorn, O-NES Tower, EmSphere, One City Centre, and the first phase of One Bangkok.

With around 1.2 million sq. m. of office space still at the planning stage where sites have been acquired, CBRE expects to see more construction starts. This will increase the projection of future supply beyond 2021.

Although there is a lot of space under construction, most of it will be completed after 2021, meaning options will remain limited between 2019 and 2020. Mitrtown Office Tower and the PARQ (Phase 1) will be the only two Grade A office buildings in the core CBD due for completion in 2019 and 2020, respectively.

“Tenants who need space during this period will need to plan ahead because of limited choices” says Ms. Roongrat Veeraparkkaroon, Head of Advisory & Transaction Services – Office at CBRE Thailand.

By 2022 the total supply is expected to reach 10 million sq. m.

The overall office market is likely to change with new supply exceeding CBRE’s forecasted demand due to the amount of new buildings being completed during this period.

Meanwhile, vacancy is expected to rise in old buildings which may force the landlords to offer attractive rents and improve the quality of their space in order to retain or attract new tenants.

The population density of office buildings will be higher because of agile working hence buildings will need to have the lift capacity to deal with the volume of traffic. Agile working is where employees do not have allocated desks.

More people per floor will require more sophisticated air-conditioning systems to keep constant temperature in all working areas and there will need to be better thermal insulation. The greater population will also mean that tenants will consider if there are enough washrooms. Tenants are also demanding better supporting amenities in buildings. This will be a major challenge for older buildings thereby making it harder to retain the best quality tenants.

Looking forward, CBRE believes more tenants will move to agile workplaces which means they will require less space but pay more rent per square metre as they will need good quality buildings.

The key question is how many companies are willing to pay significantly higher rents to get top quality premises which will depend on the rental gap between new Grade A and older Grade A and B buildings. If the premium for the best quality buildings is significantly higher than older buildings, it may be difficult for tenants to get approval for an increased rental budget.

Source link

Comments

Real Estate

How COVID-19 regulations are changing landlord-tenant dynamics

The negotiations are dependent on the circumstances of each landlord and tenant, with landlords attempting to strike a balance between maintaining earnings and supporting tenants through the crisis period to sustain occupancy levels and income over the longer term.

Daniel Lorenzzo

Published

on

Hastily enacted regulations addressing a fast-unfolding pandemic have introduced a layer of complexity around leases between tenants and landlords.

(more…)
Continue Reading

Real Estate

Thailand’s real estate industry’s transparency challenge

In the newly released biannual survey, Thailand is ranked 33th, a slight improvement from the 2018 edition of the Index where the country was ranked 34th, but a measurable step in the right direction compared to the 2016 ranking (38th).

Olivier Languepin

Published

on

Real estate transparency is an essential ingredient of a well-functioning economy and society and therefore touches on multiple aspects of life.

(more…)
Continue Reading

Real Estate

Why 5G is racing ahead in Asia

Hong Kong, Seoul, Sydney, Taipei, Manila, Tokyo and Shenzhen have already introduced 5G networks. In May, Bangkok became the first city in Southeast Asia to roll out a 5G network, while Singapore in August started a six-month trial.

Daniel Lorenzzo

Published

on

iStock-1135535759.jpg
Governments and businesses are keen to take advantage of 5G technology like High-speed connectivity, reduced latency and greater reliability

Asia Pacific is leading the charge for the next generation of mobile connectivity. Major cities across the region are rolling out 5G networks this year, which are poised to reshape connectivity and big data with blazing-fast download speeds.

(more…)
Continue Reading

Most Viewed

Subscribe via Email

Enter your email address to subscribe and receive notifications of new posts by email.

Join 13,092 other subscribers

Latest

Trending