{"id":10676,"date":"2021-01-19T15:36:09","date_gmt":"2021-01-19T08:36:09","guid":{"rendered":"https:\/\/www.asiapropertyawards.com\/?p=10676"},"modified":"2021-06-04T15:56:45","modified_gmt":"2021-06-04T08:56:45","slug":"bangkok-office-market-slows-due-to-shrinking-demand","status":"publish","type":"post","link":"https:\/\/www.asiapropertyawards.com\/en\/bangkok-office-market-slows-due-to-shrinking-demand\/","title":{"rendered":"Bangkok office market slows due to shrinking demand"},"content":{"rendered":"

Tenants\u2019 bargaining power to rise as large supply comes in the next five years<\/span>\u00a0<\/span><\/p>\n

\"\"
Rooftop view of Bangkok city skyline. AnuchitKamsongmueang\/Shutterstock<\/figcaption><\/figure>\n

Diminishing demand and future supply a<\/span>re beating up\u00a0<\/span>Bangkok\u2019s office market,\u00a0<\/span>as the sector expects plateau in rents and\u00a0<\/span>tenancy\u00a0<\/span>this year, reported\u00a0<\/span>Bangkok Post<\/span><\/a>.\u00a0<\/span>\u00a0<\/span><\/p>\n

Teerawit<\/span>\u00a0Limthongsakul, managing director at Nexus Real Estate Advisory said, \u201cthe pandemic has been prolonged.\u201d\u00a0<\/span>\u00a0<\/span><\/p>\n

N<\/span>umerous office occupants have decided to\u00a0<\/span>cut\u00a0<\/span>costs by scaling down or<\/span>\u00a0halting their expansion plans.\u00a0<\/span>\u00a0<\/span><\/p>\n

\u201cApart from cost savings, demand tends to drop in the long term as working from home becomes a trend. The country is an ageing society with a shrinking working population,\u201d he\u00a0<\/span>added<\/span>.\u00a0<\/span>\u00a0<\/span><\/p>\n

The office market is also receiving a whopping\u00a0<\/span>estimated\u00a0<\/span>1.8 million square\u00a0<\/span>metres<\/span>\u00a0of supply in the next five years, largely from big\u00a0<\/span>developments like WHA Building in Bang Na, One Bangkok nea<\/span>r<\/span>\u00a0<\/span>Lumpini<\/span>\u00a0Park, and One City\u00a0<\/span>Cente<\/span>r<\/span>\u00a0on Ploenchit Road.\u00a0<\/span>\u00a0<\/span><\/p>\n

Teerawit<\/span> said, \u201cA large amount of supply will raise tenants\u2019 bargaining power. With the slow recovery of the economy this year, rents may be <\/span>flat<\/span>\u00a0and occupancy may be flat or drop.\u201d\u00a0<\/span>\u00a0<\/span><\/p>\n

More: <\/strong>2021 Thailand real estate market prospects<\/strong><\/a><\/p>\n

In Q4 2020, office occupancy rate was high at 91 percent, but the number dropped from 94 percent in 2019. <\/span>Total office space at the end of 2020 was 6.2 million square <\/span>metres<\/span> with approximately 130,000 sqm<\/span>\u00a0added during the year.\u00a0<\/span>\u00a0<\/span><\/p>\n

Wuttiphon<\/span>\u00a0<\/span>Taworntawat<\/span>, managing director of commercial developer UHG, mentioned that multiple tenants reduced office employment by 25 percent.\u00a0<\/span>\u00a0<\/span><\/p>\n

He added that working from home wouldn\u2019t strongly impact future office demand, since many Thai firms saw productivity drop.\u00a0<\/span>\u00a0<\/span><\/p>\n

As stated by Cushman & Wakefield, partner of Nexus and US-based commercial real estate services firm, working from home arrangements aren\u2019t\u00a0<\/span>favoured<\/span>\u00a0in\u00a0<\/span>Asia. In the following 10 years, the growth rate of work from home is expected to\u00a0<\/span>increase\u00a0<\/span>only from 2.6 to 5.2 percent.\u00a0<\/span>\u00a0<\/span><\/p>\n

\u201cGrowth will be gradual as many companies in Thailand need more time to adjust. Working from home is inconvenient for some Thai sectors that would prefer semi-permanent working from home,\u201d said\u00a0<\/span>Teerawit<\/span>.\u00a0<\/span>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Tenants\u2019 bargaining power to rise as large supply comes in the next five years\u00a0<\/p>\n","protected":false},"author":12,"featured_media":20954,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[92,1],"tags":[134,528,1050,1037],"class_list":["post-10676","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","category-property-report","tag-bangkok","tag-market-update","tag-new-normal","tag-work-from-home","news_country-thailand","news_author-property-report"],"acf":[],"yoast_head":"\nBangkok office market slows due to shrinking demand | Asia Property Awards<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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