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Bangkok 3rd cheapest office location despite higher take-up rate, rents
Publication Date : 22-08-2013
Bangkok was still the third-cheapest office location in Asia-Pacific last quarter, despite the increases in take-up rate and rents, according to CB Richard Ellis.
"Bangkok recorded an eighth consecutive quarter of growth for prime Grade A CBD [central business district] rents, an 8.6-per-cent increase year on year to 880 baht (US$28) per square metre per month.
Demand was firm and primarily came from international companies across a wide range of sectors," Nithipat Tongpun, executive director of office services at CBRE Thailand, said yesterday.
"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," he said.
The firm's "Asia-Pacific Office MarketView" study showed that only Manila and Wellington were cheaper than Bangkok.
The report also showed office occupiers across the Asia-Pacific region remained cautious as the regional economic outlook remained downbeat, a trend that continued to inhibit leasing activity across most markets.
The CBRE Asia-Pacific Office Rental Index recorded marginal growth of 0.1 per cent quarter on quarter in the April-to-June period and has been flat for the past seven quarters. The year-on-year change was down 0.2 per cent, marking the third straight quarterly decline.
The most significant rental movement was in Beijing, where Grade A rents fell for the first time in three years.
Comparatively more upbeat markets were led by Tokyo, which recorded Grade A rental growth of 1.5 per cent quarter on quarter, the first time in five years that rents have risen for two straight quarters.
Net absorption last quarter totalled 660,000sqm, slightly below the five-year historical
average for the same period. In more mature markets where rents are falling, some occupiers upgraded the quality of their office space, although it remained challenging for large users to secure big contiguous spaces.
Overall vacancy increased by 25 basis points to 10 per cent. Vacancy declined in 13 markets including Bangkok, was flat in two and rose in 11.
Vacancy for Grade A CBD offices in Bangkok dropped to 11.8 per cent, the lowest level recorded since the second quarter of 2008.
Vacancy in Asia remained steady at 9.8 per cent while Pacific markets saw vacancy rise significantly by 169 basis points to 10.1 per cent as sublease and backfill space came on to the market. The increase in vacant space was most evident in Melbourne, Adelaide, Brisbane and Bangalore.
Around 1.28 million square metres of office space was completed, a figure similar to that recorded in the final quarter of last year. Construction delays in the Shanghai, Kuala Lumpur, Jakarta, New Delhi and Mumbai markets led to a lower level of forecast completion from 6.04 million square metres to 5.2 million this year.