After high office space occupancy in 2015, rents seen as rising

Research by the property consultancy found that the overall performance of the Grade A office rental market last year was good, characterised by higher occupancy rates. Rental fees are also likely to rise, with new office buildings concentrated in the Ratchada-Rama IX area of Bangkok.

This year, the market is expected to be favourable for landlords or owners of buildings, who will have enhanced bargaining power in terms of negotiating rents with tenants.

Risinee Sarikaputra, director and head of research and consultancy, Knight Frank (Chartered) Co, said Bangkok’s office property market had great prospects.

Office space was increasingly rented throughout 2015; in the first nine months of the year, there was almost 200,000 square metres of new space rented.

For the full, it was expected that there would be no less than 250,000sqm of new space rented.

Currently, there is about 300,000sqm of office space available for rent, at a rental rate of 93 per cent.

As for the average rental fee for Grade A offices in the central business district (CBD), it stands at Bt905 per square metre, with a rental rate of 93.5 per cent.

The new emerging area for office buildings is the Ratchada-Rama IX area.

Its Grade A office buildings featured higher rents of up to Bt800 per square metre, which is expected to rise to Bt900 this year.

The average rent was Bt750 per square metre towards the end of 2015.

This year, it is anticipated that there will be 195,245sqm of new office space added to the supply. Up to 147,150sqm of this will be outside the CBD, while just 48,095sqm will be within the CBD. The latter will likely command average rents of Bt1,000 per square metre.

The overall office market trend is good. Rental fees are likely to rise, because of the relatively low increase in office-space supply of 195,245sqm.

Also, the average increase in new office space is estimated at 200,000-300,000sqm while the remaining available space is 300,000sqm.