Bangkok office owners face flood of new competition – CBRE

As the office sector experiences its lowest net take-up rate, Bangkok landlords should upgrade their existing properties and provide better and more flexible leases to lure renters, before a massive amount of new places start to open, stated consultancy firm CBRE Thailand.

The pandemic has had the most significant impact on Bangkok office spaces since the 1997 financial crisis.

“There were more reductions of occupied office spaces than new spaces leased,” CBRE Managing Director Roongrat Veeraparkkaroon told the Bangkok Post. “Last year we saw more than 80,000 square metres of negative net take-up. Even in the subprime crisis of 2008, net take-up reduced but it was still positive.”

The world economy and Covid-19 controls are expected to improve; major clients have already adapted to the circumstances by exploring cost cutting strategies and moving to flexible, hybrid office spaces.

Renewal options, rent-free periods, fit-out packs, and other building perks will be part of the new adaptable strategy.

“We see signs of positive net take-up this year, but new leases and lease renewals should have flexibility as most landlords are willing to prepare for future risks, including possible new waves.”

Many of the new offices will be available in the next few years. Currently, the developers of four small-scale projects totalling roughly 10,000 square meters in Bangkok are debating whether to proceed with production. The outbreak may have delayed larger projects, but work has resumed.

Moving forward, there are three trends to keep an eye on. The first trend is a hybrid model. This is when staff are working between at home and at the office. The second trend is a greater emphasis on environmental, social and governance norms in the office sector.

SOURCE: Bangkok Post