The Bank of Thailand forecasts that the Thai economy will grow by 2.7% in 2024 and 2.9% in 2025. The tourism and service sectors are expected to perform well, while merchandise exports, particularly electronics and machinery, should see improvements driven by the global tech cycle. Hard disk drives are expected to benefit from rising demand in the data center industry. However, certain manufacturing and export sectors continue to face challenges. The automotive and parts industry has weakened due to sector-specific factors, while exports of chemicals, metals, and electrical appliances are under pressure from heightened competition with China. Uncertainty in both the global and Thai economies has risen significantly, driven by U.S. economic policies—especially tax and tariff measures—that could disrupt international trade and pose downside risks to global growth. 

In December, the Business Sentiment Index (BSI) saw a slight decline but remained on an overall upward trajectory, driven mainly by recovery in the non-manufacturing sectors. Nearly all business sectors contributed to the improved confidence, with the strongest rebound seen in the tourism-related sector, including hotels, restaurants, and passenger transportation. Respondents in this sector reported a significant boost in confidence, driven by an increase in travellers from the US and Europe during the year-end holiday season. However, the three-month expected BSI continued to fall throughout 2024, with a sharper decline in the second half of the year. During this period, the manufacturing index dropped to its lowest level for the longest duration since the onset of COVID-19, highlighting heightened uncertainty in business prospects.

Supply

Bangkok's total supply of office space remained at 6.31 million sq m as there were no additions or withdrawals to supply this quarter. For the entire 2024, total supply increased by 235,000 sq m, a similar level to the total increase in 2023.

Future Supply

The total lettable area in the supply pipeline has decreased to 1.0 million sq m, reflecting adjustments to future project sizes in response to current market conditions. Around 530,000 sq m is under construction. Current projections indicate that 2025 will see the largest influx, with an anticipated addition of 540,000 sq m to the market.

Demand

Leasing activity remained strong despite a decline in total take-up to 115,000 sq m, with net absorption holding steady at 48,000 sq m, near levels recorded in Q3. As a result, total occupied space increased by 1% to 4.86 million sq m. Green buildings continued to attract the majority of leasing demand, recording a net absorption of 50,000 sq m, while Non-Green buildings experienced a slight decline of 2,000 sq m. Demand remained positive in both CBD and non-CBD areas, with net absorption of 27,000 sq m and 22,000 sq m, respectively.

Market Dynamics by Segment

As supply pressures eased and demand grew, the overall market occupancy rate rose by 1% to 77%, marking its first increase since Q3 2023. Occupancy improved across all building grades, with Grade A seeing the largest gain of 2.1% pts, rebounding from the previous quarter to 76% and reflecting the sustained flight to quality. Grade B now has the lowest occupancy at 75%, while Grade C remains the top performer at 80%.

The market asking rent held steady at THB 842 per sq m per month, unchanged QoQ but up 3.3% YoY. Grade A average asking rents rose by 0.4% QoQ to a new market high of THB 1,246 per sq m per month, while Grade B saw a modest 0.2% increase to THB 869. In contrast, Grade C remained stable, edging down slightly to THB 540.

Market Dynamics by Area

The CBD office market experienced a slight rental increase, with the average asking rent rising 0.1% QoQ to THB 963 per sq m per month. The occupancy rate increase to 76%, marking a 0.7% QoQ growth.

• Phloen Chit-Chit Lom-Wireless saw no rental change, remaining at THB 1,090, while occupancy edged up 0.2% QoQ to 76%.
• Nana-Asok-Phrom Phong recorded the highest rental growth in the CBD, with rents rising 0.4% QoQ to THB 942, while occupancy increased 1.0% QoQ to 80%.
• Silom-Sathorn-Rama IV was the only CBD submarket to experience a slight rental decline, slipping 0.2% QoQ to THB 967. However, occupancy improved 1.0% QoQ to 74%.

The Non-CBD market also experienced a modest rental increase, with the average asking rent rising 0.1% QoQ to THB 667 per sq m per month. The occupancy rate improved to 78%, marking a 0.8% QoQ increase.

• Petchaburi-Rama IX-Ratchada led the Non-CBD occupancy rate at 80%, despite a 0.1% QoQ decline. Rents increased 0.7% QoQ to THB 727 per sq m.
• Phahon Yothin-Vibhavadi saw a rental decline of 0.5% QoQ to THB 681 per sq m, but occupancy rose significantly by 2.6% QoQ to 78%.
• Bang Na-Srinagarindra recorded occupancy gains, improving 1.2% QoQ to 70%, while rents inched up 0.2% QoQ to THB 619 per sq m.

Review & Outlook

In the latest quarter, Bangkok’s office market maintained a steady inventory at 6.31 million sq m, as there were no additions or withdrawals in supply. Throughout 2024, the market saw an increase of 235,000 sq m in total supply—mirroring the pace of the previous year—while adjustments in future project sizes have reduced the pipeline to 1.0 million sq m. Leasing activity continued robustly as net absorption remained healthy at 48,000 sq m, resulting in a 1% rise in occupied space to 4.86 million sq m. Notably, green-certified buildings attracted a substantial portion of demand, with net absorption of 50,000 sq m, compared to a marginal decline for non-green properties. Both CBD and non-CBD areas demonstrated positive momentum, recording net absorptions of 27,000 sq m and 22,000 sq m, respectively.

The market is poised for a dynamic phase as supply pressures remain strong and demand evolves. With an anticipated addition of 540,000 sq m in 2025—the largest influx projected in the near term—landlords will need to strategically position their assets to maintain competitiveness. Grade A properties are expected to capitalize on their premium status, driven by continued tenant preference for high-quality, amenity-rich environments that also incorporate advanced digital infrastructure. For owners of older properties, deciding whether to renovate or repurpose their assets, as well as determining the extent of intervention needed, will become increasingly critical. The cost of upgrading will vary based on building characteristics, location, size, required interventions, and available amenities, making an asset-specific evaluation important.

Panya Jenkitvathanalert, partner - head of office strategy and solutions, emphasized “Office buildings across all grades are currently undergoing improvements. While Grade A buildings are already fully equipped with comprehensive facilities, Grade B and Grade C buildings should prioritize retrofitting and refurbishment to enhance their competitiveness, retain existing tenants, and attract new occupants.”

A key trend gaining traction is the return to traditional office setups. Some businesses are reversing previous remote work policies by increasing the number of days employees are required to be in the office or even reverting entirely to on-site work. This shift is gaining momentum, with employees responding positively to the structured environment and the social and collaborative benefits of a physical workspace. Although fewer companies in Thailand mandate office returns compared to broader APAC trends, those that do face lower turnover and higher acceptance, indicating a robust, albeit selective, re-commitment to conventional office models.