Entrepreneurs and start-ups need to think wisely before deciding on their office space.
With the growing number of start-ups and other small businesses in Thailand, there is a shift from the traditional office environment. Many millennials are wanting to take the plunge on their own rather than working for someone else. However, residential property in Thailand cannot be used for commercial activity. Plus those working from home do not have space for an office area or even to house a growing team of staff.
So what are the best options for those wanting to start up their own company? Well CBRE Research have explored the different options available to this growing segment of the working population in Thailand and have split them into the following categories.
1. Shophouses.
The birth of many of Thailand’s successful businesses started in a shophouse in the capital’s former business district of Yaowarat. The advantage of opting for this form of office space is that landlord’s tend to be open to shorter leases of less than a year plus the rent is more affordable too. The downside are the lack of facilities and the space which can be tricky to maximise if spread out over more than one floor. Tenants are also often responsible for utilities and providing furniture. Therefore the quirkiness of this type of office space can easily be dampened by those who are not willing to tackle these obstacles.
2. Serviced offices.
The beauty of serviced offices is just that, that they are serviced. Rents are inclusive, the rental length can be as short as a month, and tenants can benefit from a shared reception and IT services. But this all comes at a cost and subsequently rents are higher but a deposit is rarely needed.
3. Office buildings.
There is a lack of supply of Bangkok office space at present. Some buildings are being replaced or refurbished to keep with growing demand of finishes and facilities. As such landlords can stick to their guns requesting tenancies of a minimum of three years. A commitment that many start-ups naturally shy away from. Additionally CBRE note that the smallest office space in Bangkok’s CBD is between 80 to 100 square metres. Throw on top of this the need to furnish the space, and the traditional office set-up isn’t always that well suited to entrepreneurs and start-ups.
4. Co-working space.
The number of co-working spaces in Thailand has expanded of late. Fuelled by demand and their qualities that include flexible lease lengths, no initial cost, networking potential, and varying office space size that even includes just a desk for solo workers. CBRE has identified over 100 locations in Bangkok with co-working space.
So what can CBRE conclude from their research? Well firstly entrepreneurs or start-ups need to take the following into consideration when choosing the right office space for the:
- Budget. This includes initial costs such as a deposit or setting up the office as well as monthly costs that include rent and utilities.
- Flexibility. The last thing a new start-up wants to get tied down with is a long rental agreement commitment that could dampen their future success. Likewise costly monthly outgoings. Many entrepreneurs and start-ups start in co-working spaces and move to bigger premises when they have succeeded and are in a better financial position.
- Ability to up and downsize. Start-ups can expand and shrink quickly. Therefore it is suggested that they check the small print for a get out clause should they need to exercise it or choose a building with one owner who is more likely to let them move to premises of a different size.
- Location. CBRE have argued that due to Thailand’s low unemployment rates, the market is competitive and it is important to do your utmost to retain staff. Many younger generations choose location over the job so picking the right place is half way to securing talent.