The commercial office property market in Bangkok is beginning to see a move forward and growth in demand and rent. The change is following a period where the market has been held back due to the combination of the global crisis and Thailand’s political uncertainty, according to an article in the New York based online newspaper International Business Times.
The latest analysis from property consultant CB Richard Ellis shows that while office demand has been slow, the market in the second quarter of 2011 was more active with clearer signs of expansion from existing tenants and a marginal increase in occupancy rates from the previous quarter to 86.5 per cent.
CB Richard Ellis Group Inc is a globally active commercial real estate services company offering a range of services to occupiers, owners, lenders and investors in office, retail, industrial, multi-family and other types of commercial real estate.
“We see an increase in companies setting factories up in Thailand. Everyone who sets up a factory also sets up an office in Bangkok for the administration,” explains James Pitchon, the executive director of CB Richard Ellis, in a telephone interview with Property Report South East Asia. “The major amount of office demand in Bangkok is driven by multinationals.
CBRE’s office enquiries were up 34.2 per cent quarter on quarter, an upswing indicating the market is heading towards the right direction. Also 59 per cent of enquiries involved an expansion.
About the companies that are already in Thailand, the executive director says: ”At some stage there has to be a lots of productivity before a company hires extra staff. In the second quarter this year we finally see this happening.”
Key growth industries in the past several years have been in the service and consultancy sectors. The trend of expanding businesses and space requirements is expected to continue and with limited new supply coming to the market, rents will increase, says the International Business Times article.
The second demand are domestic based offices, especially in Bangkok, and offices for the banking and security sector, according to Pitchon. Thailand’s economy is growing quite steadily, but a forecast is always very challenging given the state of the global economy.
Source: Property Report
