bangkok office - knight frank · 2018. 12. 24. · • average rent for bangkok office market was...

COMMERCIAL RESEARCH

BANGKOK OFFICE MARKET OVERVIEW Q3 2018

2

DEMANDIn Q3 2018, demand for office space in Bangkok shrank. The net occupied space decreased by 23,011 square metres to 4,574,565 square metres, representing an overall occupancy rate of 91.80%. The area on Sukhumvit Road between Chidlom and Phrompong showed the highest demand in the third quarter when seen from occupancy rate at 96.18%.

• As of September 2018, the total occupied space in Bangkok reached 4,574,565 square metres.

• In Q3 2018, the overall occupancy rate of Bangkok increased slightly to 91.80%.

• Average rent for Bangkok office market was up 3.79% Y-o-Y to 750 baht per square metres per month.

• Grade A rents slid to 1,040 baht per square metres per month, marking the first decline after ten consecutive quarters of growth.

• By the end of 2024, the Bangkok office market will welcome 10 office buildings with an additional space of 895,794 square metres.

HIGHLIGHTS

SOURCE: KNIGHT FRANK (THAILAND) - OCCUPIER SERVICES & COMMERCIAL AGENCY

SOURCE: KNIGHT FRANK (THAILAND) - OCCUPIER SERVICES & COMMERCIAL AGENCYNOTE: THESE FIGURES EXCLUDE MULTI-OWNER OCCUPIED PREMISES AND OFFICE BUILDINGS SMALLER THAN 5,000 SQUARE METRES.

Recently, Thailand’s government has promoted foreign investment in eastern provinces under Eastern Economic Corridor scheme. Apart from its industrial targets, the government has created Thailand 4.0 policy, aiming to make the country the next digital hub of Southeast Asia. These policies attract large international companies as well as startups to Thailand, underpinning demand for office space in Bangkok.

BANGKOK OFFICE MARKET

FIGURE 1

SUPPLY, DEMAND AND OCCUPANCY RATE, 2013 – Q3 2018

TABLE 1

OCCUPANCY RATE BY GRADE

5,000,000

3,750,000

2,500,000

1,250,000

Q4 2013 Q4 2015 Q1 2018 Q2 2018 Q3 2018

92%

91%

90%

89%Ô-0

90.38%

91.55%91.80%

Q4 2014 Q4 2016 Q4 2017

90.38%

91.35%

92.31%

91.57%

91.15%

92.47%

Supply Demand Occupancy Rate

Grade / Quarter Q3 2017 Q4 2017 Q1 2018 Q2 2018

A 93.5% 94.0% 95.4% 94.9%

B 94.1% 93.9% 95.0% 94.5%

C 89.7% 89.1% 89.2% 88.1%

Overall 91.7% 91.4% 92.3% 91.6%

Q3 2018

95.3%

93.6%

87.1%

91.8%

Demand for grade A office buildings remains strong, as evidenced by the occupancy rate of 95.34%, compared with 94.89% in the prior quarter. Meanwhile, we saw flatter demand for grade B and C office buildings. The occupancy rate of Grade B office buildings decreased to 93.62% from 94.48% in the prior quarter. The occupancy rate of Grade C office buildings dropped to 87.10% from 88.12% in the previous quarter.

3

BANGKOK OFFICE MARKET OVERVIEW Q3 2018 COMMERCIALR ESEARCH

TABLE 2

BANGKOK OFFICE FUTURE SUPPLY

SUPPLYIn Q3 2018, total office supply in Bangkok remains the same at

4,962,158 square metres. In the next quarter, two office buildings with total spaces of 52,000 square metres will be added in non-CBD areas.

From the fourth quarter of 2018 to the end of 2019, 6 office buildings will enter the market, with additional total space over 240,000 square metres. In non-CBD area, there will be further 5 bulidings, with total area of 198,609 square metres. Meanwhile, only one building with an area of 45,000 square metres will be added in CBD area.

From 2020 to 2024, the Bangkok office market will welcome 10 office buildings with 652,185 square metres.

Future Supply CBD

2018 0

2019 45,000

2020 22,185

2021 286,000

Non-CBD

52,000

146,609

20,000

0

2022 0

2023 77,000

Sum 430,185

Total

100,000

94,000

465,609

895,794



TABLE 3

BANGKOK FUTURE SUPPLY BY YEAR (SQUARE METRES)

Office expected completion in 2018

Total Office expected completion in 2018 : 52,000 square metres

Office expected completion in 2019

T1 Office Building

Whizdom 101

22,000

30,000

Q4 2018

Q4 2018

Non-CBD

Non-CBD

Total Office expected completion in 2019 : 191,609 square metres

Total Office expected completion in 2020-2024+ : 652,185 square metres

Office expected completion in 2020-2024+

Spring Tower

CP Tower 4

Samyan Mitrtown

The PARQ

27,518

48,091

45,000

71,000

2019

2019

2019

2019+

Non-CBD

Non-CBD

CBD

Non-CBD

Magnolia Projeact

Vanissa Building

Ploenchit Embassy

One Bangkok

The Forestias

Oasis

Super Tower

Chuvit Garden

Sriboonruang

Dusit Thani

20,000

22,185

61,000

225,000

100,000

53,000

94,000

20,000

37,000

20,000

2020

2020

2021

2021+

2022

2022

2023

2023

2023

2024

Non-CBD

CBD

CBD

CBD

Non-CBD

Non-CBD

Non-CBD

CBD

CBD

CBD

Lettable Area(square metres)Building Name Completion Zone

4



TABLE 4

ASKING RENT BY GRADE

FIGURE 2

AVERAGE ASKING RENTS BY GRADE (Q3 2005 – Q3 2018)

FIGURE 3

AVERAGE ASKING RENTS BY ROADS (BAHT PER SQM PER MONTH)

RENTAL RATESIn 2017 and 2018, rental rates of Bangkok office buildings was on an uptrend. The asking rental of available office space in the third quarter of 2018 climbed 3.79% Y-o-Y from 722 baht per square metres per month to 750 baht per square metres per month. However, the average rent edged down 0.32% Q-o-Q.

In Q3 2018, grade A rents expanded 4.70% Y-o-Y to 1,040 baht per square metres per month but decreased 0.41% Q-o-Q. Grade B rents grew 2.62% Y-oY to 740 baht per square metres per month but the rents were down 0.15% Q-o-Q

compared to the previous quarter. Grade C rents climbed 3.62% Y-o-Y to 470 baht per square metres per month but declined 0.39% Q-o-Q.

RENT BY AREASAverage rents on Sukhumvit Road between Phrompong and Chidlom marked highest rank, with 982 baht per square metres. Meanwhile, asking rents on Rama 3 Road showed the lowest

figure compared to other areas, with 466 bath per square metres per month. Interestingly, asking rents on Rama 3 Road advanced by 19.22% Y-o-Y, the highest growth compared to other precincts.

Sukhumvit Rd

Q-o-Qchange

y-o-ychange

Sathorn Rd Wireless Rd Rama 9 Rd Paholvothin Rd Vibhavadee Rd

Asoke Rd Silom Rd Rama 4 RdB angna Rd Rama 3 Rd

4.22%

6.69%

0%

10.17%

1.62%

3.42%

0.26%

4.50%

1.33%

6.72%

0.51%

0.11%

-1.49%

-0.33%

-2.12%

1.14%

1.00%

5.57%

6.54%

19.22%

-0.73%

-0.33%

704 637 740 526 466982 755 940 597 629 542


Q3 2005

Q3 2006

Q3 2007

Q3 2008

Q3 2009

Q3 2010

Q3 2011

Q3 2012

Q3 2013

Q3 2014

Q3 2015

Q3 2016

Q3 2017

Q3 2018

1,200

1,000

800

600

400

200

0306 339 334 337 341 374 374 377 386 409 425 448 454 470

473 531 540 561 558 571 558 569 589 616 651 694 720 740620

736 738 764 743 738 735 743 806 848936 956 994

1,040

Grade / Quarter Q3 2017 Q4 2017 Q1 2018 Q2 2018

A 994 1,000 1,027 1,045

B 720 727 735 740

C 454 454 468 472

Overall 722 727 743 752

Q3 2018

1,040

739

470

750

5Knight Frank Research, Reports are available at KnightFrank.co.th/Research

For the latest news, views and analysison the world of prime property, visit

KnightFrankblog.com/global-briefing

GLOBAL BRIEFING

Thailand Contacts

Phanom KanjanathiemthaoManaging Director+66 (0)2643 8223 Ext [email protected]

Surasak Limpa-ArayakulExecutive Director, Head of Valuation and Advisory+66 (0)2643 8223 Ext [email protected]

Roong SitthisankunchornExecutive Director, Head of Property Management+66 (0)2643 8223 Ext [email protected]

Marcus BurtenshawExecutive Director, Head of Occupier Services andCommercial Agency (OSCA)+66 (0)2643 8223 Ext [email protected]

Frank KhanExecutive Director, Head of Residential +66 (0)2643 8223 Ext [email protected]

Phuket Contact

Nattha KahapanaExecutive Director, Head of Knight Frank Phuket+66 (0)7631 8151 Ext [email protected]

Important Notice© Knight Frank LLP 2018 - This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information, analysis, views and projections presented in this report, no responsibility or liability whatsoever can be accepted by Knight Frank LLP for any loss or damage resultant from any use of, reliance on or reference to the contents of this document. As a general report, this material does not necessarily represent the view of Knight Frank LLP in relation to particular properties or projects. Reproduction of this report in whole or in part is not allowed without prior written approval of Knight Frank LLP to the form and content within which it appears. Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934. Our registered office is 55 Baker Street, London, W1U 8AN, where you may look at a list of members’ names.

RECENT MARKET-LEADING RESEARCH PUBLICATIONS

Knight Frank Commercial Research provides strategic advice, consultancy services and forecasting to a wide range of clients worldwide including developers, investors, funding organisations, corporate institutions and the public sector. All our clients recognise the need for expert independent advice customised to their specific needs.

OUTLOOKRental rates of Bangkok office buildings hiked 68.69% since 2004, indicating great demand for office space in Bangkok. From the fourth quarter of 2018 onwards, there are 16 office buildings in the pipeline, which will likely put downward pressure on rental rate growth.

GLOSSARYGrade A Buildings – By virtue of their desirability, these prime properties command the highest rents in their market. You will find them located in the Central Business District located a near mass transit station, and have a floor plate of at least 1,000 square metres.

Grade B Buildings – Is the largest sector of the office market, these are the buildings that are traditionally in the greatest demand, they might not be the most expensive properties in the market but represent good value for money.

Grade C Buildings – Typically older properties, these buildings provide office space for rent at the most competitive rents in the market.

Q1 2018Bangkok Office Market

RESIDENTIAL RESEARCH

BangkokcondominiUm market Q2 2015


BANGKOK SUPER PRIME AND PRIME CONDOMINIUM MARKET OVERVIEW H1 2016

COMMERCIAL RESEARCH

BANGKOK OFFICEMARKET OVERVIEW Q1 2018

Q2 2018Bangkok Office Market





COMMERCIAL RESEARCH


Q1 2018BangkokCondominium Market





COMMERCIAL RESEARCH


2017Phuket Condominium Market





COMMERCIAL RESEARCH

PHUKET CONDOMINIUMMARKET OVERVIEW 2017

bangkok office - knight frank · 2018. 12. 24. · • average rent for bangkok office market was...

Documents