Recovery observed in Bangkok's office sector, influenced by evolving tenant preferences
Bangkok's Office Market Shows Signs of Recovery
In a positive development for Bangkok's commercial real estate sector, the city's central business district (CBD) is experiencing a quiet resurgence in the office market. The improvement is primarily due to the adaptability of large corporations and their evolving tenant demands.
Despite the increased costs associated with central locations, business confidence remains unwavering. The Silom-Sathorn-Rama IV area, known for its diverse transport links and strong corporate reputation, demonstrates this trend, with rental rates climbing 0.4% to 971 baht per square metre per month and occupancy surging 1.9%.
While the Ploenchit-Chidlom-Witthayu and Nana-Asok-Phrom Phong districts have seen only modest rental increases, their occupancy rates have dipped slightly. This indicates that tenants are becoming more discerning, seeking a balance between location, price, and functionality.
Areas outside the CBD are also vying for attention, offering a mix of rental rates and value for money. The Phetchaburi-Rama IX-Rama IX-Ratchadaphisek corridor has been a consistent performer, while Bangna-Srinakarin has emerged as a potential hotspot, especially for businesses requiring large spaces yet mindful of costs.
Looking ahead, 2025 promises a surge in new office supply, with approximately 835,000 square meters currently under construction and an anticipated 524,000 square meters set to enter the market. Notable projects, such as The Central Phaholyothin by Central Pattana, are expected to shake up the market landscape.
The evolving office market calls for a shift in focus beyond price and vacancy rates. In a tenant-driven market, quality and service will become decisive factors in the office leasing game. This shift underscores the growing importance of customer care and risk management for office buildings.
However, challenges remain, including concerns over building safety following recent earthquakes. As the office market recovers, it must strike a balance between catering to tenant demands and addressing emerging concerns to secure a sustainable and resilient market.
Tags: Bangkok, office, property, recovery, economy, tenants, CBD
- Despite the rising costs in central locations, there's an unwavering business confidence in Bangkok's office market, particularly in the Silom-Sathorn-Rama IV area, where rental rates have increased and occupancy surged.
- As the office market recovers, the focus must shift beyond price and vacancy rates to cater to the evolving demands of tenants, with quality and service becoming deciding factors in the office leasing game.
- Infrastructure, such as diverse transport links, continues to be a key driver for the Silom-Sathorn-Rama IV area's popularity, as tenants seek a balance between location, price, and functionality.
- In the face of a surge in new office supply predicted for 2025, building safety concerns following recent earthquakes and addressing tenant demands will be essential for securing a sustainable and resilient market.
- The improved office market in Bangkok is not limited to the central business district (CBD); areas like Phetchaburi-Rama IX-Rama IX-Ratchadaphisek corridor and Bangna-Srinakarin are also seeing growth, offering a mix of rental rates and value for money to various industries.
