While this trend is set to continue over the coming two years, Savills expects conditions to move in tenants’ favour post 2021, with a wave of new quality office projects seeking to attract key corporate occupiers. 

Fourth Quarter Commentary from Savills Thailand

Grade A CBD rents averaged THB1,007 per sq m per month (inclusive of service charge) over Q4, representing quarterly and annual rises of 0.7% and 2.2%, respectively.  While this sets a new high for average Grade A CBD rents, the annual growth rate has declined by 0.4 ppt from 2.6% over 2017, with Savills noting that landlords were generally less bullish on renewal uplifts and new quoted terms.

The fourth quarter witnessed the completion of Singha Complex, a mixed-use scheme developed jointly by Bangkok-based Singha Estate and Hongkong Land. The building, located on the corner of Asoke-Petchburi Road, comprises a total of 60,000 sq m of leasable space, with approximately 80% of the scheme reportedly pre-leased prior to completion.

The addition of Singha Complex brings total Grade A CBD stock to around 1.3 million      
sq m, a year on year increase of 7%, says Savills. 

Co-working providers continued to circulate requirements for prime Bangkok office space, with WeWork officially opening its first Bangkok location in November, occupying two floors at Asia Centre in Sathorn.  Central Pattana PLC (CPN) announced plans to bring Malaysian co-working provider, Common Ground, to Bangkok, with CPN citing anticipated demand for flexible space from to small and medium-sized enterprises.

Outlook from Savills Thailand

2019 is set to see the completion of Samyan Mitrtown, a mixed-use scheme comprising 48,000 sq m of office space and Aspiration One, comprising 30,000 sq m. Both projects are slated for completion by the fourth quarter and located with the prime CBD area. 

Phase one of the The Parq, a mixed-use scheme jointly developed by Frasers Property and TCC Group, is scheduled to add a further 63,000 sq m of office space within the first quarter of 2020. The project’s second phase is slated to add a further 70,000 sq m over 2023.

According to Savills, total supply is set to increase by 168,000 sq m by the end of 2020, representing an increase of 12.9 % in Grade A CBD stock.

Savills notes that there are a number of large-scale future office schemes, both planned and under construction, due to complete post 2021. Of particular note is One Bangkok, a flagship mixed-use scheme due to comprise around 470,000 sq m of leasable office space, across five buildings, slated for phased completion from 2022 to 2025. 

Chris Hobden, Thailand head of research at Savills told WILLIAMS MEDIA ‘’Prime CBD office stock benefited from professional services growth, in addition to new market entrants, with co-working providers announcing aggressive Bangkok expansion plans over the fourth quarter.’’

“Savills expects Grade A CBD rents to rise by 2 to 3% per annum over the next two years, with demand for prime space continuing to outpace project completions.’’

 ‘’Post 2021, a wave of new high-grade office stock will likely drive a flight to quality, especially among multinational corporate occupiers, which we expect to most acutely impact occupancy rates, and achievable rents, across older Bangkok buildings.’’

For more information or to discuss the Bangkok property market phone or email Chris Hobden Thailand head of research at Savills via the contact details below.

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