The year 2010 represented one of the least active years for the office market as a whole in Bangkok as businesses were preoccupied with political disturbances and a possible double dip recession for many of its export destinations. The latest Bangkok Office Market Report Q4 2010 by Colliers International Thailand was released with one positive being that limited new supply over the coming few years should help bring occupancy levels back up. Antony Picon, Senior Manager of Research, pointed to issues facing the office market. “Future limited new supply can provide the market with an opportunity to reduce vacancy rates over the next few years”, he said. Mr Picon feels that Bangkok should try to capitalize on future opportunities for service sector growth especially in the form of ASEAN 2015 liberalization. “Thailand should compete harder by improving education as well as more incentives from the Board of Investment . Other countries are moving fast in the Business Process Outsourcing market such as Philippines and Vietnam; Thailand shouldn’t be left behind”, he remarked.
Patima Jeerapaet, Managing Director of Colliers emphasized the positives including new incentives for Regional Operating Headquarters and growing interest from China in Thailand as a regional hub. “Thailand is located in the heart of South East Asia and could gain significantly from the dramatic changes that are shaping the region and this will be very beneficial for the office market,” he pointed out. Mr Patima was also optimistic regarding Sathorn Square, the largest office building in the CBD since Empire Tower. “It is time that we saw new modern office towers being built in our city which reflects the energy and optimism we feel about the future”, he added.
Occupancy rates remained stable over the course of the year as a whole but with variance according to area. The Northern Fringe dipped from just over 86% to just below 84%, while the Outer CBD improved by about the same amount and now reaches 86%. The CBD registered about a 1% improvement over the course of 2010. Rental rates remained fairly static in 2010 as landlords maintain rates and provide incentives to attract tenant s to stay put. Only just under 6,000 sq m was added to supply in 2010 in the form of Office@Sivatel . “In many ways the big story of the office market in 2010 was that there was no story,” asserted Mr Picon. “ My forecast for 2011 is the same again although the opening of Sathorn Square in Q1 2011 will alter the dynamics in the Sathorn Road area but overall the tense global financial situation and lingering domestic tensions will keep many businesses in a holding pattern” he said. However Mr Picon ended on a more optimistic note. “If the country can move forward in the latter half of the year with developing its service sector in a more stable environment, then we might see a big improvement ”.