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Q2 2011 - Q3 2011
new Supply
DemanD
RentalS
occupancy
Bangkok office MarketthailanD
.rs..
Bangkok Ofce Market
highlightS
Occupancy rates fall in CBD on back of signicant new supply.
Sh Squ d P Vus emplx pd h ds Q3 2011, dd ud
100,000 sq m to the CBD.
Rental rates remain largely unchanged q/q.
Global nancial fears are likely to maintain low oce relocation and upgrades for the next
quarter.
Q3 2011 | office
maRket inDicatoRS
occupancy Rate in 3 main locationS, Q1 2009 Q3 2011
Su: clls il thld rsh
th upy h cBD ll m h pvus qu by
nearly 0.6%, due to two new buildings being completed with a total area
of around 100,000 sq m which has directly aected the occupancy rate.
The Northern Fringe occupancy rate increased by around 0.25% despite
two oce buildings being added to the market in Q3.
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M h 118,200 sq m hs b s shduld b mpld
2011, ppxmly 100,000 sq m cBD d h s h
Northern Fringe area. At the end of 2011 oce stock in Bangkok will be
around 8,016,000 sq m.
The CBD area represents the biggest share of the oce building market
in Bangkok with around 36% of total supply, followed by the Northern
Fringe area and Outer CBD area with 20% and 13% respectively. Overall
oce supply is dispersed widely throughout the city.
Su: clls il thld rsh
Su: clls il thld rsh
commulative Supply
Supply by location, Q3 2011
hiStoRical Supply
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FutuRe Supply by location
occupancy Rate by location, Q3 2011
COLLIERS INTERNATIONAL | P. 3
Su: clls il thld rsh
Su: clls il thld rsh
Nearly 285,084 sq m of oce space is scheduled to be supplied in
Bangkok in the next four years in four zones, with the lions share
expected in 2014. Eight oce buildings are scheduled to be completed
in the Northern Fringe area in the next four years. Overall expected
additional new supply will represent a 2.7% increase in total supply with
more than 13% for the Northern Fringe area. Over the period of four
years this presents a limited amount for the market to absorb.
th ou cy Ws sll mmds h hhs upy
Q3 2011, and the Outer City North has the lowest occupancy rate. The
Southern Fringe occupancy rate recorded the second lowest gure due
to its location away from mass transit lines.
FutuRe Supply
DemanD take up
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The eect of the introduction of Sathorn Square and Park Venture
Ecocomplex in Q3 2011 are likely to have a short term detrimental eect
on occupancy after a recovery in H1 2011. However with modest growth
predicted for the following two years and a limit on new supply, Colliers
il thld pds dul bu susd s upy
rates in 2012. However the recent downturn in global economic
ds s lly u dmp sm d h d
oce relocation and expansion to a certain degree.
Since January 2011 onwards more than 2,000 new companies registered
h Dpm Busss Dvlpm d lhuh vll
month to month basis the trend seems to be in a positive direction which
bodes well for oce demand.
Su: clls il thld rsh
Su: Dpm Busss Dvlpm d clls il thld rsh
actual anD FutuRe eStimate oF occupancy RateS
newly RegiSteReD FiRmS DuRing JanuaRy 2009 auguSt 2011
DemanD DRiveRS
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expoRtS FRom thailanD on a monthly baSiS
Rental Rate by location
Su: B thld d clls il thld rsh
Su: clls il thld rsh
Industrial growth is the main driver that powers the oce market as it
leads to the need for trading, nancial, legal and insurance services,
amongst others, to support it. Exports started to recover from the GFC in
2009 with a steady pattern of growth despite setbacks from political
disturbances.
Usupsly h cBD mmds h hhs l s du hlocation and number of grade A buildings. Rents in the Outer CBD
dropped while increases were recorded in the CBD and Northern Fringe
areas. This could be explained by the fact that a signicant number of
oces in the Northern Fringe are located close to both BTS and MRT as
well as Srirat Expressway, while most oces in the Outer CBD areld sm ds m mss s ls d my lvly
old with smaller oorplates. Oce buildings located near a mass transit
station are preferable for both employees and business visitors alike.
Bangkok office Market rePort | Q3 2011
Rental Rate, Q3 2011
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Grade A buildings command higher rentals than grade B buildings. There
is also some distinction between B & C grade oces although not so
pronounced.
Is not surprising that the rent of grade A building higher than grade B &
c, du ms d a bulds b ld h cBD d
the area along the mass transit system.
Su: clls il thld rsh
Rental Rate by gRaDe Q3 2011
In Q3 2011, rental rates for oce buildings in the CBD area remained
more or less the same when compared to Q2 2011. In light of the current
softened market conditions landlords have found it dicult to raise rents
during renewal negotiations.
Su: clls il thld rsh
hiStoRical Rental Rate in thRee main locationS, Q1 2009 Q3 2011
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Rental Rate oF oFFice builDing in bangkok by DiStance FRom btS / mRt (metReS), Q3 2011
Su: clls il thld rsh
Sll ps dmum pjs ls mss s s
tend to be higher and, the same seems to be the case for oces. Being
ld mss s s s pbl bh mplys d
business visitors alike. Recently a number of oces have direct access
to a BTS station that further adds to the appeal.
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After a signicant increase in new supply in the CBD for Q3 2011 the
next few years are expected to see no new supply coming on-stream in
the CBD. Increasing land prices in the urban areas, especially close to
the mass transit lines has meant that oce development is scheduled to
be located in the fringes, primarily in the Northern Fringe area. Retailand oce developments along Ratchadapisek road, especially in the
vy rm iX, lly ld lv cBD l h
can compete with lower rentals and put pressure on the existing CBD
area. However the CBD may simply expand to encompass the new
growth areas.
The recent deterioration of the global nancial system is likely to aect
oce expansion and relocation even after the political situation in
Thailand has stabilized following the election. However, overall inventory
levels in most signicant economies remain low compared to the advent
of the global downtown in 2008 allowing room for growth. Also the
sovereign debt issue has not signicantly worsened but Greecesmpd dul hs sh bd ms d vss d pu h
larger economies in the unwelcome spotlight along with a fear of lack of
cohesion from the Eurozone countries and within the USA for creating
vh mhsms h pvd supp l b
systems. Also lacking are credible plans to reduce the high levels of
government debt to GDP ratios in the longer term.
At present news relating to the global nancial situation is a trying one
for any investor or business with sentiment and share prices falling with
alarming frequency. At present this has not translated into a reduction of
exports for Thailand and is unlikely to have any fundamental eect on the
Thai economy. However the current situation will prolong pent updemand for oce space that has aicted the oce market in Bangkok
since 2006.
Although it is dicult envisioning Bangkok supplanting Singapore as the
nancial hub of the ASEAN area, the growing interest in Cambodia, Laos,
Myanmar and Vietnam could see Bangkok as a sub-regional centre
supp hss ms d uh vs rl
Operating Headquarters by the Board of Investment could allow the
Bangkok oce market to benet from this emerging trend.
FoRecaSt
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Bangkok office Market rePort | Q3 2011
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appenDix
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oFFice Zoning
COLLIERS INTERNATIONAL | P. 14
th l l z ss B hs ld h xs
of signicant oce supply in a wide range of locations in the city and
how the market has perceived the CBD has evolved over the past 20years. The original CBD was located at the Silom and Surawongse roads,
home to the vibrant gold market and other trading businesses. The
development of modern oce buildings in the nineties, with a larger
oor plate could not be accommodated in this area and the CBD began
to take shape in the eastern section of Sathorn road.
Whl Suhumv d up as s pmly pvd s
m d sdl , l umb d a bulds
sprung up in the nineties and also in the past few years. It is thereforeconsidered as part of the CBD. As a working denition the CBD, for the
purposes of oce classication, is where a signicant number of Grade
A oce buildings are located. As such the old CBD is now considered
the Outer CBD as well as Petchburi road where more grade B oces are
located. Over time this structure could evolve.
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collieRS inteRnational thailanD
management team
OFFICE & INDUSTRIAL SERVICES
num rdsvph | S M
RETAIL SERVICES
Asharawan Wachananont | Senior Manager
ADVISORY SERVICES | HOSPITALITY
J M g | D
PROJECT SALES & MARKETING
Monchai Orawongpaisan | Senior Manager
RESIDENTIAL SALES & LEASING
Napasawan Chotephard | Manager
aDViSorY SerViceS
np thum | ass D
REAL ESTATE MANAGEMENT SERVICES
Bdd chyu | ass D
inVeStMent SerViceS
Nukarn Suwatikul | Associate Director
Ws rjjuul | S M
reSearcH
ty P | ass DSuh khp | S M
VALUATION & ADVISORY SERVICES
Nicholas Brown | Associate Director
Phhsu Phmhu | ass D
Sp kmh | S M
Wanida Suksuwan | Manager
PattaYa office
Mark Bowling | Senior Sales Manager
Sup Sjs | S Busss Dvlpm
Manager / Oce Manager
coLLierS internationaL thaiLand:
Bangkok Ofce17/F Ploenchit Center,2 Suhumv rd, kly,B 10110 thld
tel +662 656 7000
Fax +662 656 7111
email [email protected]
Pattaya Ofce519/4-5, Pattaya Second Road (Opposite Central FestivalPattaya Beach), Nongprue, Banglamung, Chonburi 20150
tel +6638 427 771Fax +6638 427 772
email [email protected]
ReSeaRcheR:
thldty Pass D | rsh
email [email protected]
ReSeaRcheR:
thldSuh khpS M | rsh
email [email protected]
512 oces in 61 countrieson 6 continents
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Bangkok office Market rePort | Q3 2011