Bangkok office rents remain cheap, comparatively to the global locations. Bangkok ranked 115 out of 126 cities surveyed by CBRE. Accordingly, CBRE research shows that in the year 2014 the percentage of rent in Bangkok has increased regardless weak economy. The overall vacancy rate was 9.5 per cent and total net new take-up stood at around 180,000 square meters. Bangkok ranked the cheapest office location in the Asia-Pacific Region
The four most expensive locations were London's West End, Hong Kong's Central district and Beijing's Finance Street and CBD with total occupation costs of between Bt5,500 to Bt8,000 per square meter per month compared to Bt900 - Bt1,000 per square meter per month in Bangkok's best office buildings.
The inexpensive location for office space in the world was in Durban, South Africa, with prime office rents of Bt450 per square meter per month.
Dublin, Ireland and Philippine capital of Manila are the places across the worlds with higher increase in rent where rents rose by almost 35 per cent and 20 per cent in one year respectively.
The biggest drops were in Santiago, Chile, where prime office rents fell by 13.5 per cent and in Lyon, France, where they fell by 10 per cent.
Few new office developments are underway in Bangkok, as office developers compete with condominium developers for prime sites given zoning and planning regulations allow either use. With record high condominium prices in prime locations, condominium developers are expected to continue outbidding office developers for sites because their returns will be higher.
According to CBRE Research department, this will mean that there will few new office developments. Office rents will have to rise by 30 to 50 per cent before returns on office development begin to match those currently being achieved by condominium development.
In addition to limited new supply, Bangkok's office stock is ageing. Some of the older buildings with slow lifts, poor air-conditioning and poor floor plates are becoming obsolete, especially those that have not been substantially refurbished or are in locations not linked to the mass-transit system. These buildings are less popular with tenants who prefer modern, better-located buildings. This will increase the demand for quality buildings in most popular locations.
Source: Aliwassa Pathnadbutr