Bangkok Office MarketView Q3 09
Overall take-up in the Bangkok office market was 6,773,065 sqm, up 0.1% Q-o-Q and 0.8% Y-o-Y. The total occupancy rate also improved slightly from 86.0% to 86.1% in this quarter. The vacancy rate was 13.9%, indicating a fall from the 14.0% recorded in Q2 2009.Bangkok office market rents have moved downwards. As of Q3 2009, the overall rents dropped for the third consecutive quarter, since the beginning of the year. Grade A offices in the CBD area faced a 0.9% Q-o-Q and 6.7% Y-o-Y drop in rents, down to THB 694/sqm in this quarter.
During Q3 2009, net new take-up posted positive figures in all segments (Grade A CBD and Non-CBD; and Grade B CBD and Non-CBD), Q2 had seen negative figures in a number of the grades. Total net take-up stood at 9,253 sqm, which was down 31.6% Q-o-Q and 43.7% Y-o-Y.
Although demand remained weak during Q3 2009, there was a 9,253 sqm growth in the total amount of occupied office space. Net take-up since the beginning of the year was 31,382 sqm.
The completion of the Energy Complex in Q4 will have a significant effect on other buildings in the Northern corridor, since PTT and its subsidiary companies will be relocating from other buildings in the Northern corridor to the Energy Complex when it is complete. This will lead to vacancy in these other buildings, with Northern corridor rents likely to be pushed down.
Apart from the Energy Complex, only three buildings will be completed in the next two years. These are Sathorn Square (73,584 sqm) and Sivatel (5,880 sqm) in 2010; and Park Ventures (28,000 sqm) in 2011.
Outlook
Although demand remained weak during Q3 2009, there was a 9,253 sqm growth in the total amount of occupied office space. Net take-up since the beginning of
the year was 31,382 sqm.
The office sector has not seen a significant increase in supply; therefore, rents react rapidly to an increase in demand. With limited new supply in the coming years, any recovery in the economy may lead to an increase in demand for office space in Bangkok.
In the current climate however rents may fall further as landlords compete to retain tenants and occupy vacant space.Visit CBRE Research to download full report
