Knight Frank Thailand reveals that the overall performance of the Grade-A office rental market this year has been good, characterized by higher occupancy rates. Rental prices are also likely to rise, and the location of new office buildings is concentrated in the Ratchada – Rama 9 area. Next year, the market is expected to be favourable for landlords or owners of buildings, who will have enhanced bargaining power in terms of negotiating rents with tenants.
Miss Risinee Sarikaputra, Director and Head of Research and Consultancy, Knight Frank (Chartered) Co., Ltd., said thatBangkok’s office property market has great prospects. Office space was increasingly rented throughout 2015; in the first nine months of the year, there was almost 200,000 square metres of new space rented. For the entire 2015, it is expected that there will be no less than 250,000 square metres of new space rented. Currently, there is about 300,000 square metres office space available for rent, at the rental rate of 93 per cent. As for the average rental price of Grade-A offices located in the central business district, it stands at 905 baht per square metre, with a rental rate of 93.5 per cent.
The new emerging area for office buildings is the Ratchada – Rama 9 area; its Grade-A office buildings featured a higher rental price of up to 800 baht per square metre, which is expected to rise to 900 baht per square metre next year. The average rental rate was 750 baht per square metre towards the ends of 2015. Next year, it is anticipated that there will be 195,245 square metres of new office space added to the supply; up to 147,150 square metres of such space will be located outside the central business district, while merely 48,095 square metres of such space will be located within the central business district. The latter will likely command average rents of 1,000 baht per square metre.
The overall office market trend is good. Rental prices are likely to rise, due to the relatively low increase in office space supply of 195,245 square metres. Also, the average increase in new office space is estimated at 200,000 to 300,000 square metres while the remaining available space is 300,000 square metres, At any rate, Miss Risinee expects that 2016 will be a favourable year for landlords or owners of office buildings, as they will enjoy enhanced bargaining power when it comes to rent negotiations with tenants.
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Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank and its New York-based global partner, Newmark Knight Frank, operate from 417 offices, in 58 countries, across six continents. More than 13,000 professionals handle in excess of US$1.4 billion worth of commercial, agricultural and residential real estate annually, advising clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit www.knightfrank.com.
