Transport infrastructure is the main reason that Grade ‘A’ office space outside Bangkok’s central business district is attracting higher asking prices than Grade ‘B’ space within the CBD.
According to new research from Knight Frank (Chartered) Thailand, office space in the capital is currently enjoying high levels of occupancy.
Risinee Sarikaputra, Director, Research and Consultancy at Knight Frank, noted that from the results of her firm’s research results, during the first half of 2015 the net take-up of office space was approximately 133,359 sqm, now cumulatively some 4.3 million sqm, and occupancy rates rose to 92.6 percent.
She added there is currently just 342,806 sqm of vacant office space. During 2015 just one new office building has been launched where some 70 percent has already been reserved.
On the whole, she added that the newly occupied space was in newly completed buildings or buildings with a lot of vacant lettable space. This space was rented by companies with existing operations who wished to expand, and found that their previous office space did not allow for such expansion. Thus has to move. But even though companies moved out from their old spaces in the CBD, overall occupancy rates for office space did not drop due to the fact that companies remaining in such spaces also expanded their operations.
Risinee added that, in terms of the average asking prices for office space, it is currently THB 674 per sqm which reflected an increase of 7 percent compared with the first half of 2014.
Rental rates in the Grade ‘A’ CBD commanded approximately THB 905 per sqm, while that of the Grade ‘B’ CBD group was THB 624 per sqm.
In the non-CBD group, the asking rates were THB 699 per sqm and THB 469 per sqme in the Grade ‘A’ and Grade ‘B’ sectors respectively. It can be noted that the asking price for Grade A office space outside of the CBD was higher than that of Grade B space within the CBD.
She also noted that the difference in asking prices between Grade ‘A’ non-CBD spaces and Grade ‘B’ CBD spaces is increasing thanks to the development of new non-CBD offices with high standards. In contrast, Grade ‘B’ CBD offices saw no improvements. Grade ‘A’ non-CBD spaces enjoyed more convenience in terms of connectivity and access to the transportation infrastructure, she added.
Looking at the future supply of office space, Knight Frank noted it looks like this will increase more in non-CBD areas. Buildings under construction in the CBD include just 120,143 sqm of space, while there is 250,210 sqm of non-CBD office space under construction.
