Bangkok leads Asia in office rentals
With the government positioning Thailand as the ideal location for corporations to establish their headquarters, Bangkok has emerged as the strongest growth performer in the region in the office rental sector of the real estate market, according to the Knight Frank Asia Pacific Prime Office Rental Index, published by global real estate consultancy Knight Frank.
“Strong growth in Thailand’s service sector is leading to what seems like unceasing demand for office space, pushing rents ever higher,” said Marcus Burtenshaw, executive director of Knight Frank.
Bangkok topped 20 other Asia-Pacific cities on the index, registering 3.1 percent quarter-on-quarter growth for the first three months of this year, and 9.6 percent year-on-year growth. Burtenshaw noted that office rental rates in the Thai capital have been steadily climbing higher for the past two years, and he expects they will continue to rise.
Simply put, demand has been increasing for high-quality office space, and the demand has been outstripping supply. “Looking ahead, supply-side lag and a growing service sector mean that this climate of rising rents is likely to continue for some time to come,’’ he said.
Bangkok has always been an attractive location for businesses because of its central location in the region and its plentiful infrastructure compared to that found in many neighboring countries and their capitals.
In recent years, the city’s growing network of mass transit lines has increased its convenience, and the skyline has been dramatically transforming with new cutting-edge buildings cropping up in many areas, some of which have won awards for design and architecture. The marketplace has been a factor in driving this transformation.
“Faced with the reality of higher rents, tenants are increasingly demanding more from their buildings. The requirements are not limited to good access to mass transit, grand lobbies or high ceilings. Tenants want more natural light, improved security systems and quality food outlets that cater to the budgets of all of their employees,” Burtenshaw said.
Meanwhile, local real estate developer Sansiri said that the overall Thai real estate market still holds strong attraction for foreign investors and has “enormous potential” for the future.
That assessment was contained in its Sansiri’s Global Luxury Property Market Research 2017 published last week. The report drew on data provided by Global Property Guide, Knight Frank, Numbeo and Plus Property.
“Thailand is fast becoming a major property market among international investors. For international real estate buyers and investors, Thailand has all the same favorable fundamentals as other major real estate markets around the world,’’ said Uthai Uthaisangsuk, senior executive vice president at Sansiri.