Limited new office supply in Bangkok is expected to drive up rental prices by between 5 per cent and 9 per cent this year, according to a survey by CBRE (Thailand).CBRE’s research also anticipates that the tight office-supply situation will continue in 2018 and 2019, while the supply situation from 2020 onwards will depend on how many developers start construction on new office projects this year.CBRE Research, reports that although office supply in Bangkok has expanded by 140,000 square metres, vacancy has continued to fall to 8 per cent and rents are therefore expected to rise by 5-9 per cent this year, depending on location and grade.

New office supply under construction is limited, with only 225,000 square metres due to be completed this year, and 167,000 square metres due for completion in 2018.This has led to tenants having to sign leases in new buildings even before construction has been completed, according to CBRE Research.Bangkok had a large surplus of office space supply for many years, meaning that tenants had a wide variety of space in completed buildings, and did not need to commit to buildings while they were still under construction, the company said.

However, the office-vacancy rate dropped, for the first time since the early 1990s, to below 10 per cent in 2013, and has continued to fall since, limiting tenants’ choices in existing buildings, and particularly in the best-quality central-business-district (CBD) developments with direct access to mass transit.Moreover, the choice of available space for large users in completed buildings is even more limited, and there are currently no completed CBD grade-A office buildings with more than 5,000 square metres on consecutive floors, CBRE said.

Meanwhile, property agency Knight Frank has announced the results of its “Asia-Pacific Office Occupier Survey 2016/17”,carried |out among more than 200 companies located in Asia-Pacific spanning across eight industries: consulting;consumer products; finance/accounting/ legal;manufacturing/ agriculture;pharmaceutical/ biotechnology/ healthcare; petroleum/ energy; public sector/ non-government organisations; and technology and communication.

rcus Burtenshaw, head of Commercial, Knight Frank Thailand, said 2016 had been a difficult year for many businesses around the region, and this was reflected by the findings in its survey.“Faced with economic uncertainty and increased competition this year, more respondents to our survey chose rent as their most important building-selection criteria than ever before, putting cost control ahead of image and accessibility.

Source:The Nation