Bangkok office space is the third cheapest in the Asia Pacific region, despite high take-up rates and rising rental costs.
CBRE’s ‘Asia Pacific Marketview’ revealed that only Manila and Wellington were cheaper.
Take-up is, however, reportedly high, with the majority of interest coming from international companies from a range of sectors.
“Bangkok recorded an eighth consecutive quarter of growth for Grade a CBD rents, an 8.6 per cent increase year on year,” said Nithipat Tongpun, executive director of office services for CBRE Thailand.
“No new Grade A supply was completed. Grade A rents will continue to rise on the back of limited supply and steady demand but the growth rate has now passed the peak.”
Investors remain cautious with regards to the regional economic outlook, which remains downbeat. As a result, leasing activity has appeared slightly inhibited.
CBRE’s Asia Pacific Office Rental Index recorded growth of just 0.1 per cent per quarter in April-June, and has been flat for seven quarters.
Tokyo has recorded Grade A rental growth, with an upbeat 1.5 per cent growth rate quarter on quarter – the first time in five years that rents have risen for two straight quarters.
Vacancy levels in Bangkok dropped to 11.8 per cent – a low not seen since 2008. Net absorption last quarter totalled 2,157,000 square feet.