BANGKOK OFFICE - Knight Frank · 2018. 12. 24. · • Average rent for Bangkok office market was...
Transcript of BANGKOK OFFICE - Knight Frank · 2018. 12. 24. · • Average rent for Bangkok office market was...
COMMERCIAL RESEARCH
BANGKOK OFFICE MARKET OVERVIEW Q3 2018
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DEMANDIn Q3 2018, demand for office space in Bangkok shrank. The net occupied space decreased by 23,011 square metres to 4,574,565 square metres, representing an overall occupancy rate of 91.80%. The area on Sukhumvit Road between Chidlom and Phrompong showed the highest demand in the third quarter when seen from occupancy rate at 96.18%.
• As of September 2018, the total occupied space in Bangkok reached 4,574,565 square metres.
• In Q3 2018, the overall occupancy rate of Bangkok increased slightly to 91.80%.
• Average rent for Bangkok office market was up 3.79% Y-o-Y to 750 baht per square metres per month.
• Grade A rents slid to 1,040 baht per square metres per month, marking the first decline after ten consecutive quarters of growth.
• By the end of 2024, the Bangkok office market will welcome 10 office buildings with an additional space of 895,794 square metres.
HIGHLIGHTS
SOURCE: KNIGHT FRANK (THAILAND) - OCCUPIER SERVICES & COMMERCIAL AGENCY
SOURCE: KNIGHT FRANK (THAILAND) - OCCUPIER SERVICES & COMMERCIAL AGENCYNOTE: THESE FIGURES EXCLUDE MULTI-OWNER OCCUPIED PREMISES AND OFFICE BUILDINGS SMALLER THAN 5,000 SQUARE METRES.
Recently, Thailand’s government has promoted foreign investment in eastern provinces under Eastern Economic Corridor scheme. Apart from its industrial targets, the government has created Thailand 4.0 policy, aiming to make the country the next digital hub of Southeast Asia. These policies attract large international companies as well as startups to Thailand, underpinning demand for office space in Bangkok.
BANGKOK OFFICE MARKET
FIGURE 1
SUPPLY, DEMAND AND OCCUPANCY RATE, 2013 – Q3 2018
TABLE 1
OCCUPANCY RATE BY GRADE
5,000,000
3,750,000
2,500,000
1,250,000
Q4 2013 Q4 2015 Q1 2018 Q2 2018 Q3 2018
92%
91%
90%
89%Ô-0
90.38%
91.55%91.80%
Q4 2014 Q4 2016 Q4 2017
90.38%
91.35%
92.31%
91.57%
91.15%
92.47%
Supply Demand Occupancy Rate
Grade / Quarter Q3 2017 Q4 2017 Q1 2018 Q2 2018
A 93.5% 94.0% 95.4% 94.9%
B 94.1% 93.9% 95.0% 94.5%
C 89.7% 89.1% 89.2% 88.1%
Overall 91.7% 91.4% 92.3% 91.6%
Q3 2018
95.3%
93.6%
87.1%
91.8%
Demand for grade A office buildings remains strong, as evidenced by the occupancy rate of 95.34%, compared with 94.89% in the prior quarter. Meanwhile, we saw flatter demand for grade B and C office buildings. The occupancy rate of Grade B office buildings decreased to 93.62% from 94.48% in the prior quarter. The occupancy rate of Grade C office buildings dropped to 87.10% from 88.12% in the previous quarter.
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BANGKOK OFFICE MARKET OVERVIEW Q3 2018 COMMERCIALR ESEARCH
TABLE 2
BANGKOK OFFICE FUTURE SUPPLY
SUPPLYIn Q3 2018, total office supply in Bangkok remains the same at
4,962,158 square metres. In the next quarter, two office buildings with total spaces of 52,000 square metres will be added in non-CBD areas.
From the fourth quarter of 2018 to the end of 2019, 6 office buildings will enter the market, with additional total space over 240,000 square metres. In non-CBD area, there will be further 5 bulidings, with total area of 198,609 square metres. Meanwhile, only one building with an area of 45,000 square metres will be added in CBD area.
From 2020 to 2024, the Bangkok office market will welcome 10 office buildings with 652,185 square metres.
Future Supply CBD
2018 0
2019 45,000
2020 22,185
2021 286,000
Non-CBD
52,000
146,609
20,000
0
2022 0
2023 77,000
Sum 430,185
Total
100,000
94,000
465,609
895,794
SOURCE: KNIGHT FRANK (THAILAND) - OCCUPIER SERVICES & COMMERCIAL AGENCY
SOURCE: KNIGHT FRANK (THAILAND) - OCCUPIER SERVICES & COMMERCIAL AGENCY
TABLE 3
BANGKOK FUTURE SUPPLY BY YEAR (SQUARE METRES)
Office expected completion in 2018
Total Office expected completion in 2018 : 52,000 square metres
Office expected completion in 2019
T1 Office Building
Whizdom 101
22,000
30,000
Q4 2018
Q4 2018
Non-CBD
Non-CBD
Total Office expected completion in 2019 : 191,609 square metres
Total Office expected completion in 2020-2024+ : 652,185 square metres
Office expected completion in 2020-2024+
Spring Tower
CP Tower 4
Samyan Mitrtown
The PARQ
27,518
48,091
45,000
71,000
2019
2019
2019
2019+
Non-CBD
Non-CBD
CBD
Non-CBD
Magnolia Projeact
Vanissa Building
Ploenchit Embassy
One Bangkok
The Forestias
Oasis
Super Tower
Chuvit Garden
Sriboonruang
Dusit Thani
20,000
22,185
61,000
225,000
100,000
53,000
94,000
20,000
37,000
20,000
2020
2020
2021
2021+
2022
2022
2023
2023
2023
2024
Non-CBD
CBD
CBD
CBD
Non-CBD
Non-CBD
Non-CBD
CBD
CBD
CBD
Lettable Area(square metres)Building Name Completion Zone
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SOURCE: KNIGHT FRANK (THAILAND) - OCCUPIER SERVICES & COMMERCIAL AGENCY
SOURCE: KNIGHT FRANK (THAILAND) - OCCUPIER SERVICES & COMMERCIAL AGENCY
TABLE 4
ASKING RENT BY GRADE
FIGURE 2
AVERAGE ASKING RENTS BY GRADE (Q3 2005 – Q3 2018)
FIGURE 3
AVERAGE ASKING RENTS BY ROADS (BAHT PER SQM PER MONTH)
RENTAL RATESIn 2017 and 2018, rental rates of Bangkok office buildings was on an uptrend. The asking rental of available office space in the third quarter of 2018 climbed 3.79% Y-o-Y from 722 baht per square metres per month to 750 baht per square metres per month. However, the average rent edged down 0.32% Q-o-Q.
In Q3 2018, grade A rents expanded 4.70% Y-o-Y to 1,040 baht per square metres per month but decreased 0.41% Q-o-Q. Grade B rents grew 2.62% Y-oY to 740 baht per square metres per month but the rents were down 0.15% Q-o-Q
compared to the previous quarter. Grade C rents climbed 3.62% Y-o-Y to 470 baht per square metres per month but declined 0.39% Q-o-Q.
RENT BY AREASAverage rents on Sukhumvit Road between Phrompong and Chidlom marked highest rank, with 982 baht per square metres. Meanwhile, asking rents on Rama 3 Road showed the lowest
figure compared to other areas, with 466 bath per square metres per month. Interestingly, asking rents on Rama 3 Road advanced by 19.22% Y-o-Y, the highest growth compared to other precincts.
Sukhumvit Rd
Q-o-Qchange
y-o-ychange
Sathorn Rd Wireless Rd Rama 9 Rd Paholvothin Rd Vibhavadee Rd
Asoke Rd Silom Rd Rama 4 RdB angna Rd Rama 3 Rd
4.22%
6.69%
0%
10.17%
1.62%
3.42%
0.26%
4.50%
1.33%
6.72%
0.51%
0.11%
-1.49%
-0.33%
-2.12%
1.14%
1.00%
5.57%
6.54%
19.22%
-0.73%
-0.33%
704 637 740 526 466982 755 940 597 629 542
SOURCE: KNIGHT FRANK (THAILAND) - OCCUPIER SERVICES & COMMERCIAL AGENCY
Q3 2005
Q3 2006
Q3 2007
Q3 2008
Q3 2009
Q3 2010
Q3 2011
Q3 2012
Q3 2013
Q3 2014
Q3 2015
Q3 2016
Q3 2017
Q3 2018
1,200
1,000
800
600
400
200
0306 339 334 337 341 374 374 377 386 409 425 448 454 470
473 531 540 561 558 571 558 569 589 616 651 694 720 740620
736 738 764 743 738 735 743 806 848936 956 994
1,040
Grade / Quarter Q3 2017 Q4 2017 Q1 2018 Q2 2018
A 994 1,000 1,027 1,045
B 720 727 735 740
C 454 454 468 472
Overall 722 727 743 752
Q3 2018
1,040
739
470
750
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GLOBAL BRIEFING
Thailand Contacts
Phanom KanjanathiemthaoManaging Director+66 (0)2643 8223 Ext [email protected]
Surasak Limpa-ArayakulExecutive Director, Head of Valuation and Advisory+66 (0)2643 8223 Ext [email protected]
Roong SitthisankunchornExecutive Director, Head of Property Management+66 (0)2643 8223 Ext [email protected]
Marcus BurtenshawExecutive Director, Head of Occupier Services andCommercial Agency (OSCA)+66 (0)2643 8223 Ext [email protected]
Frank KhanExecutive Director, Head of Residential +66 (0)2643 8223 Ext [email protected]
Phuket Contact
Nattha KahapanaExecutive Director, Head of Knight Frank Phuket+66 (0)7631 8151 Ext [email protected]
Important Notice© Knight Frank LLP 2018 - This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information, analysis, views and projections presented in this report, no responsibility or liability whatsoever can be accepted by Knight Frank LLP for any loss or damage resultant from any use of, reliance on or reference to the contents of this document. As a general report, this material does not necessarily represent the view of Knight Frank LLP in relation to particular properties or projects. Reproduction of this report in whole or in part is not allowed without prior written approval of Knight Frank LLP to the form and content within which it appears. Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934. Our registered office is 55 Baker Street, London, W1U 8AN, where you may look at a list of members’ names.
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OUTLOOKRental rates of Bangkok office buildings hiked 68.69% since 2004, indicating great demand for office space in Bangkok. From the fourth quarter of 2018 onwards, there are 16 office buildings in the pipeline, which will likely put downward pressure on rental rate growth.
GLOSSARYGrade A Buildings – By virtue of their desirability, these prime properties command the highest rents in their market. You will find them located in the Central Business District located a near mass transit station, and have a floor plate of at least 1,000 square metres.
Grade B Buildings – Is the largest sector of the office market, these are the buildings that are traditionally in the greatest demand, they might not be the most expensive properties in the market but represent good value for money.
Grade C Buildings – Typically older properties, these buildings provide office space for rent at the most competitive rents in the market.
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