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market indicatorS
Q2 2012 - Q3 2012 new Supply demeand reantalS occupancy
hiStorical Supply
total Supply added in each five-year period
More than 26,640 sq m has been or is scheduled to be completed in 2012; approximately 24,200 sq m in the Outer CBD area and the rest in the Northern Fringe area. At the end of 2012 office stock in Bangkok will be around 8,042,700 sq m.
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The CBD area represents the biggest share of the office building market in Bangkok with around 36% of the total supply, followed by the Northern
Fringe area and the Outer CBD area with 20% and 13%, respectively. The overall office supply is dispersed widely throughout the city.
future Supply
future Supply by location, Q3 2012
More than 286,000 sq m of office space is scheduled to be supplied in Bangkok in 2014 in three zones. The Northern Fringe area represents the largest share with more than 71% of the total future supply in 2014, approximately 3.6% of the total current supply in Bangkok. Limited available land in the CBD and Outer CBD areas and the increasing land prices over the past few years were major obstacles for all types of
real estate development, including office buildings. Most new office buildings were located in the Northern Fringe area, and had similar facilities to those in the CBD.
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The Outer City West area had the highest occupancy rate for Q3 2012, although the Outer City West, Outer CBD and Northern Fringe areas all had similar occupancy rates. although the average occupancy rate in the
CBD was the second highest, the number of companies extending leases increased from 2011, due to limited current and future supply.
The occupancy rate in the CBD area increased slightly from the previous quarter, due both to new companies leasing office space and some of those already in the CBD expanding their existing offices. The average occupancy rate increased everywhere due to positive signs in Thailands
economy and politics, with foreign and local investors setting up or expanding their companies in Bangkok. The city is the best location for companies looking for new opportunities in Myanmar, Laos and Cambodia.
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The average occupancy rate in all parts of Bangkok continued to increase from 2011. Although some office buildings were added to the market in 2011 and 2012, most of the office space was occupied or reserved before the completion of the building, so the market was not affected. In addition, all of the office buildings completed in 2012 were small. With modest growth predicted for the following two years and a limit on new supply, Colliers International Thailand predicts a gradual but
sustained rise in occupancy rates in 2012 - 2013. global economic conditions are still being affected by the EU debt crisis, but the AEC in 2015 is attractive to foreign investors, and they are in search of office space in Bangkok for their businesses in the region.
demand driverS
newly regiStered firmS from January 2010 to auguSt 2012
From January 2012 onwards, more than 1,900 new companies were registered every month at the Department of Business Development and
although there was an approximately 40% drop in april 2012, this was due to there being only 17 work month rather than economic factors.
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The average rental rate of office buildings depends on location, with the highest rate in the CBD, followed by the areas along the mass transit lines, including the Northern Fringe and Outer CBD areas. The average rental rate in the CBD area continued to increase from the previous year
and will do so in the future, due to limited supply. The Northern Fringe area is on the way to becoming a new business area in Bangkok in the future; the rental rate is still lower than the CBD area, but it offers similar facilities.
The average rental rate of grade a buildings was higher than grade B buildings by around 40%, and was approximately 75% higher than for grade C buildings. It is not surprising that the rent of grade a buildings
is higher than grades B and C, as most grade a buildings are located in the CBD area and the area along the mass transit system; in addition most of them also provide good facilities.
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In the third quarter of2012, rental rates for office buildings in the CBD, Outer CBD and Northern Fringe areas increased slightly compared to the previous quarter.
rental rate of office buildingS in bangkok by diStance from btS / mrt (metreS), Q3 2012
Selling prices for condominium projects closer to mass transit stations tend to be higher than for those further away, and that also seems to be the case for offices. Being located near a mass transit station is preferable
for both employees and business visitors alike. A number of offices have direct access to a BTS station which further adds to their appeal.
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appendiX
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Bangkok office Market rePort | Q3 2012 collierS international thailand management team
OFFICE SERVICES Nattawan Radomyos | Senior Manager INDUSTRIAL SERVICES Narumon Rodsiravoraphat | associate Director ADVISORY SERVICES | HOSPITALITY Jean Marc garret | Director PROJeCT SaLeS & MaRkeTINg Monchai Orawongpaisan | associate Director ReSIDeNTIaL SaLeS & LeaSINg Napaswan Chotephard | Manager RESEARCH Tony Picon | associate Director Surachet kongcheep | Senior Manager RETAIL SERVICES asharawan Wachananont | associate Director ADVISORY SERVICES Napatr Tienchutima | associate Director REAL ESTATE MANAGEMENT SERVICES Prasert Saiphrawan | Senior Manager INVESTMENT SERVICES Nukarn Suwatikul | associate Director Wasan Rattanakijjanukul | Senior Manager VALUATION & ADVISORY SERVICES Phachsanun Phormthananunta | Director Wanida Suksuwan | associate Director
reSearcher:
PATTAYA OFFICE Mark Bowling | Senior Sales Manager Supannee Starojitski | Senior Business Development Manager / Office Manager HUA HIN OFFICE Sunchai kooakachai | Senior Manager
This report and other research materials may be found on our website at www.colliers.co.th. Questions related to information herein should be directed to the Research Department at the number indicated above. This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. Colliers International is a worldwide affiliation of independently owned and operated companies.
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