2023-06-14-莱坊-Bangkok_Office_Market_Q1_2023_9页_1mb

Bangkok Office Market Analysis - Q1 2023

Economic Overview

• GDP Growth: 3.8% Y-o-Y (up from 2.6% in 2022).
• Foreign Arrivals: Forecast at 27.5 million, an ~150% increase YoY.
• Headline Inflation: 2.8% in Q1, within the 1-3% target range.
• Business Sentiment Index (BSI): Rises to 52.9 from 48.4 YoY, indicating improving sentiment.

Office Market Dynamics

• Supply:
  • Total supply increased by 86,000 sqm (+1.7% Q-o-Q).
  • New buildings launched: One City Centre, The Rice.
  • Pipeline supply (2023-2025): 1.62 million sqm, with CBD accounting for 67%.
• Demand:
  • Net absorption of 39,500 sqm in Q1, 150,700 sqm over the past year.
  • Higher demand for green-certified buildings (21% of market).
  • CBD and non-CBD office segments showed similar leasing activity in Q1.

Occupancy and Rent Changes

• Overall Occupancy: 79% (down from Q4).
  • Grade A: 85% occupancy (+2.7% Q-o-Q).
  • Grade B/C: Lower growth in net absorption, higher supply pressure.
• Rent Trends:
  • Average asking rent: THB 808 per sqm/month (+1.2% Yo-Y).
  • Grade A saw the largest increase (+1.0% Q-o-Q to THB 1,178).
  • CBD offices (average rent THB 922) remain the most expensive area.
  • Non-CBD areas stabilized but occupancy rates fell.

Forecast

• Supply Concerns: New supply (1.62 million sqm) dominates demand over 2023-2025.
• Green Certifications: Essential for competitiveness (older non-green buildings lost 373,000 sqm vs 17,000 with certification).
• Sub-market Differences: Petchburi-Rama IX-Ratchada saw highest net absorption, while Silom saw higher rental growth but declining occupancy.

Key Takeaways

• Demand recovery aligns with economic growth, driven by sectors like tourism and technology.
• New supply outpaces demand, leading to downward pressure on occupancy and accelerated rent increases.
• Green-certified offices are increasingly preferred, reflecting ESG focus.

Created by Marcus Burtenshaw & Panya Jenkitvathanalert, Knight Frank Thailand