Bangkok Office Market

Transcription

1 research Q highlights Bangkok s office supply increased to 4,661,188 square metres. During the first half of 2015, the office supply increased by 86,000 square metres. Over four years, the net take-up of office space recorded a new high in the first half of 2015 at approximately 133,359 square metres. We anticipate witnessing the net take-up of office space exceed 200,000 square metres for the whole of The latest occupancy rate was at 92.6%, an all-time high in many years. The overall average rental rate increased from THB 630 in Q to THB 674 per square metre, or approximately 7.0% per annum.

2 Q SUpply The cumulative office supply stood at 4,661,188 square metres, increasing by 80,600 square metres from 2014, due to the completion of AIA Sathorn Tower and Bhiraj Tower at EmQuartier. The total supply increased by 1.5% from the end of AIA Sathorn Tower is located on the main Sathorn Road in the CBD area within walking distance from BTS Surasak station, while Bhiraj Tower at EmQuartier is located on the main Sukhumvit Road with direct access to Prompong BTS station. The office supply in the non-cbd areas comprised approximately 52% of the total supply, while office space in the CBD made up around 48%. In addition, the proportion of non-cbd supply tends to increase gradually as scarcity of land for office development in the CBD has increased. Figure 1 Supply & New Supply Q to Q Note: These figures exclude multi-owner occupied premises and office buildings smaller than 5,000 sq.m. 2

3 Future SUpply Figure 2 Future Supply In the second half of 2015, 103,035 square metres of the future supply are expected to be complete, 74% of which are located in non-cbd areas. In 2016, it is anticipated that 119,210 square metres of new supply will enter the market, 100% of which will be located outside the CBD. Table 1 Future Supply Building Name Lettable Completion Location Zone Space (sq.m.) G-Land Tower 65,630 Q Rama 9 Non-CBD Major Tower 10,405 Q Thonglor 10 Non-CBD Bhiraj Tower at Sathorn 27, Sathorn CBD The Metropolis 13,540 Q Sukhumvit 39 Non-CBD Bhiraj Tower at BITEC 31,880 Q Sukhumvit- Non-CBD Bangna FYI Center 48,095 Q Ratchadapisek - Non-CBD Rama IV M Tower 9,990 Q Sukhumvit 62 Non-CBD Rungrojthanakul 4 15,705 Q Ratchadapisek Non-CBD Shinnawat 4 13,060 Q Paholyothin Non-CBD Singha Complex 36,000 Q Asok-Petchaburi Non-CBD Gaysorn Office Tower 19,500 Q Rajdamri CBD Whizdom , Sukhumvit 101 Non-CBD Super Tower 94, Rama 9 Non-CBD SJ Infinite II Business Complex 30,000 N/A Bangna Km.7 Non-CBD The Bangkok Mall 100,000 N/A Sukhumvit- Bangna Rama IV Project (Formerly 137,500 N/A Rama IV - Suan Lum Night Bazaar) Wireless Non-CBD CBD 3

4 Q Demand Figure 3 Demand & Occupancy Rate Q Q Note: These figures exclude owner occupied premises and office buildings smaller than 5,000 sq.m. The total occupied space stood at 4,318,382 square metres, increasing from the same period in 2014 by 2.3%. In the first half of 2015, Bangkok office market set the highest new occupancy rate record among the previous years. The average occupancy rate was at 92.6%, increasing from that of the last year by 2.0%. The most growth was seen in the Grade A office in the non CBD category, but the highest occupancy rate, of 94.9%, was found in the Grade A office in the CBD category. Overall, occupancy rose in all tiers, especially those of Grade A offices in the non CBD, with outstanding 4.4% annual growth. Table 2 Occupancy Rate Quarter CBD Non-CBD Grade A Grade B Grade A Grade B Overall Q % 91.3% 82.3% 90.0% 90.6% Q % 91.6% 82.5% 90.4% 91.1% Q % 92.5% 84.1% 90.6% 91.5% Q % 92.6% 81.2% 91.0% 91.7% Q % 93.2% 86.7% 92.0% 92.6% Q-o-Q -0.2% 0.5% 5.5% 1.0% 0.9% Y-o-Y 1.9% 1.9% 4.4% 1.9% 2.0% 4

5 Figure 4 Net Take Up of Office Space Q In Q2 2015, the net take-up of office space peaked at 133,359 square metres. Also, the total net take-up was even more than new supply, which was 80,600 square metres. The net take-up of office space has risen every year since We anticipate witnessing the net take-up of office space exceed 200,000 square metres for the whole of If we compare the net take-up space with the future supply on an annual basis, we expect that, going forth, the future supply will be lower while the net take-up continues to grow, thereby implying that there will be an office supply shortage in the near future. 5

6 Q Rental Rates Figure 6 Asking Rent The overall average rental rate was THB 630 in Q It rose to THB 674 per square metre, increasing by approximately 7.0% per annum. The rental rate increased in all segments, with the highest rental rate shown in the Grade A-CBD group, which commanded approximately THB 905 per square metre, an increase of 10.0% annually. That of the Grade A Non-CBD group was THB 699 per square metre, increasing by 8.5% year-on-year. With equal growth at 3.8% year-on-year, the average rental rates of Grade B-CBD and Grade B Non-CBD groups was THB 624 and 469 per square metre respectively. Figure 6 Asking Rent by Major Roads 6

7 Outlook in the Latter Half of 2015 The situation of land scarcity in Bangkok s office market is becoming more obvious with strong demand but less supply, and the achievement of consistently new and high occupancy rate records. The existing vacant space and three-year forecast are only 342,806 square metres and 250,148 square metres respectively. Over 130,000 square metres of new demand was witnessed during the single half of 2015, and thus we anticipate witnessing the net take-up of office space exceed 200,000 square metres for the whole of Looking forward, high occupancy rates and limited demand tends to put pressure on the tenant side in terms of rental rates, owing to higher bargaining power of the property owner. 7

8 Q Definitions CBD Defined as the area covering Silom, Sathorn, Rama IV, Ploenchit, Wireless, and Sukhumvit Road between Soi 1 and Soi 21 to the north and Soi 2 and Soi 16 to the south. Non-CBD Defined as the areas outside the CBD area. Net Take-Up The net change in occupied space between the current period and the previous period. Grade A Classification A floor plate should have net space of more than 1,000 square metres, with a regular shape, and without structural encumbrances. The building should have an impressive design and high-quality decoration. The building should include an air-conditioning system with a central chiller and variable air volume. The building should have efficient and sufficient car parking space. Ceiling heights should be at least 2.7 metres. The building should have well-known, professional property managers. 8

9 research Americas USA Bermu da Brazil Caribbean Chile Australasia Australia New Zealand Europe UK Belgium Czech Republic France Germany Hungary Ireland Italy Monaco Poland Portugal Russia Spain The Netherlands Ukraine Africa Botswana Kenya Malawi Nigeria South Africa Tanzania Uganda Zambia Zimbabwe Asia Cambodia China Hong Kong India Indonesia Macau Malaysia Singapore Thailand Vietnam Thailand Contacts Phanom Kanjanathiemthao Managing Director +66 (0) Ext 124 Chaturawit Wattanapruk Executive Director +66 (0) Ext 120 Surasak Limpa-Arayakul Executive Director, Head of Valuation and Advisory +66 (0) Ext 143 Roong Sitthisankunchorn Executive Director, Head of Property Management +66 (0) Ext 144 Marcus Burtenshaw Executive Director, Head of Commercial Agency +66 (0) Ext 121 Frank Khan Executive Director, Head of Residential +66 (0) Ext 280 Risinee Sarikaputra Director, Research and Consultancy +66 (0) Ext 180 Phuket Contact Nattha Kahapana Executive Director, Knight Frank Phuket +66 (0) Ext 300 Knight Frank Research provides strategic advice, consultancy services and forecasting to a wide range of clients worldwide including developers, investors, funding organisations, corporate institutions and the public sector. All our clients recognise the need for expert independent advice customised to their specific needs. Knight Frank Research Reports are also available at Knight Frank LLP 2015 This report is published for general information only. Although high standards have been used in the preparation of the information, analysis, views and projections presented in this report, no legal responsibility can be accepted by Knight Frank Research or Knight Frank LLP for any loss or damage resultant from 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 allowed with proper reference to Knight Frank Research. Knight Frank LLP is a limited liability partnership registered in England with registered number OC Our registered office is 55 Baker Street, London, W1U 8AN, where you may look at a list of members names.