Office rents could fall in Bangkok market

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Office rents could fall in Bangkok market 
Bangkok Post: 2 Feb 2010
Office rents could fall

Soft market conditions for office space will continue and new supply entering the market will put further pressure on rents as occupancies continue to slide, says property consultancy Knight Frank Chartered (Thailand).

The company expects to see demand for office space recover by the second half - as long as there is no further political disruption or any further weakening in the global economy.

Bangkok's office market is showing higher vacancy rates with an average rise of 3.35% last year, reflecting the difficulties most firms in the services sector have faced during the year.

Despite minor rallies in the third quarter of 2009, demand remained sensitive to local political stability and the health of the world's major economies.

Rents continued to slide in all sectors of the market in the fourth quarter of 2009, resulting in a net drop in average rents of 1.47% over 2009 to 493.71 baht per square metre per month on average. The grade A market bore most of the brunt of the downward pressure, with rents down by 1.94% over the year.

The latter half of 2009 saw rentals drop at an accelerating rate as landlords came to grips with the reality of the softer market conditions. New supply entering the market next year is likely to put further stress on achievable rents.

http://www.bangkokpost.com/business/economics/32158/office-rents-could-fall