Bangkok's City Office Building Market Sluggish In 1st Quarter

The office building market in the city was sluggish in the first quarter of this year since most firms providing office areas for rent slowed their business expansion plan upon concerns over political uncertainties and economic slowdown, according to Jones Lang LaSalle, a world's leading real estate services and money management firm.

Supint Meechucheep, the company’s president, said impacts of the political uncertainties on the property business had gained clear momentum as could be witnessed by a decline in consumer spending, investment, and business expansion by the private sector.

It resulted in a slowdown in the office building market in Bangkok.

However, she believed, should the government manage to stimulate the economy as planned, provide multinational companies proper understanding of an amendment to the Foreign Business Act, and hold the general election as promised, the investor confidence would be restored.

It would help improve sentiment in the office building market in the city accordingly.

Jones Lang LaSalle said in its research report that space areas in the office building market in the central business district (CBD) of Bangkok left vacant for rent in April averaged 11.4 per cent of total areas, down from 12.9 per cent in January.

An average rent for office buildings in the A grade area of CBD increased slightly to 666 baht per square meter in April from 660 baht in January.

Building owners had begun to soften their stand on the rent increase because they did not want existing tenants to move out.

At the same time, space areas of newly-constructed office buildings are expected to increase in the second half of this year.

So, it is projected the rent this year would not rise significantly from that of last year.