Tenant demands need to be satisfied in order to fill Bangkok’s future office building supply.
The tables are turning once again for Bangkok’s office market. Driven by a lack of supply in recent years, this could all be about to change. The capital’s older office buildings are in the spotlight once again. As demands from tenants heighten, in the coming years there will also be a good supply of new stock available giving tenants more choice. According to Jones Lang LaSalle 8.9 million square metres will be added by the close of play 2017. This will increase with more in the pipeline between now and 2022.
This has rung alarm bells for some developers who had their eyes set on future office projects. But the market is still there for the taking assuming that the right sort of property is built. The office market has been very lucrative recently. A distinct lack of supply coupled with strong demand since the economy has taken an upwards turn has meant that vacancy rates have been low. Simultaneously rents have been heading upwards. However demand is expected to keep up with future supply.
But developers will need to hone in on market demands as the capital welcomes a new era of office building such as the FYI Building. Designed partially in a bid to satisfy employees, tenants are no longer just interested in location. Facilities, the space, and amenities are all being prioritised too. This new thirst will leave older building in the wayside. Landlords will need to take heed and adapt to keep competitive in the next phase of the market. Nevertheless their prime location is something that many new building cannot always beat due to a shortage of supply of land pushing newer buildings to the fringes. One point that existing landlords should attempt to capitalise on.
Yupa Sathienpabayut, head of office leasing at Jones Lang LaSalle, commented, “Despite older age, these buildings can stay competitive when landlords adopt appropriate strategies. Renovation, a critical element in improving competitiveness, can be seen by the recent post-renovation success of office buildings such as Sindhorn Towers, GPF Witthayu, Siam Tower and Vanit Building”.