Increases in Grade A Office Rents in Central Bangkok

Developers have been having a field-day in building new condominiums, and have not had any problems (as yet) in selling them. But what about grade A office buildings? Has someone forgot?

With very limited supply of grade A office buildings, office rentals have broken through the 600 Baht/sq.m. mark. Office rents in Bangkok's Central Business District (CBD) have risen by 25% year-on-year, and further increases are expected. Office rental amounts may reach 700 Baht/sq.m. by the end of 2006.

This exceeds average prices for condominium units, with the possible exception of super luxury condominiums or serviced apartments in the Chidlom and Ruam Rudi area.

In 2005, the only noticeable addition to the Grade A office supply was the opening of Central World Tower between Chidlom and Siam. Other buildings opening in the new year will be Q House on Sathorn Road at the Rama 4 intersection, and Exchange Tower at Asoke.

The Bangkok office market is a simple matter of supply and demand. Office demand will exceed new supply, resulting in lower vacancy rates and therefore upward pressure on rents. Developers are still not breaking any ground on new buildings and so the market situation for office space will continue to remain tight for the next two years.

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