Bangkok prime gross office rents dip 1.6% in Q2 | Real Estate Asia
, Thailand

Bangkok prime gross office rents dip 1.6% in Q2

Capital values slightly increased by 0.3% during the quarter.

Data from JLL reveal prime gross office rents in Bangkok’s Central Business Area (CBA) remained stable for two consecutive quarters, at THB 933 per sqm per month with a slight change of -1.6% y-o-y. 

“A few landlords continued to offer discounts, while others kept the rents stable. Recent completions with healthy occupancy increased their rents, with some no longer offering rent-free periods,” JLL said in a report.

Here’s more from JLL:

Capital values slightly improved by +0.3% q-o-q and +3.9% y-o-y to THB 159,366 per sqm. This was mainly owed to rising land prices and high inflation rate. Market yield slightly compressed to 5.35%, and is likely to remain flat with minimal changes in the near term.

Flight-to-quality becomes clear in recent completions

Prime net absorption totalled 1,800 sqm in 2Q22. Large positive movement in the quarter came from pre-commitment in recent completions. In addition, a number of small flight-to-quality tenants upgrading from old non-prime buildings to prime buildings in the Central Business Area (CBA) was recorded. However the overall demand situation remained dim.

Known leasing volumes in the quarter totalled 11,400 sqm, with 3,000 sqm being new lets and the remainder being relocation from older buildings in the CBA.

Vacancy compresses as recent projects fill up

No new supply completed in 2Q22. Total CBA prime office stock stood at 1,472,800 sqm.

Vacancy rate compressed slightly to 18.7% in 2Q22 after pre-commitments moved into recent completions.

Outlook: Rising vacancy from upcoming completions pressuring yield

By end-2022, One City Centre plans to open, after which CBA stock should total 1.53 million sqm. Pre-leases across new and recent completions have become more solid, thus vacancy rate should reach 20.3%.

Gross rents should remain flat, while rent-free periods in older assets are rising. This in turn should pressure net effective rents to compress by -4.6% y-o-y. With declining rents and high capital values, market yield should fall to 5.35% by end-2023.

 

Follow the link s for more news on

Join Real Estate Asia community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!