A Cushman & Wakefield Research Publication
According to the National Economic and Social Development Board (NESDB), Thailand's GDP rose by 0.3% in the first quarter of 2012, improving from a sharp decline of 8.9% in the previous quarter. Household consumption expanded by 2.7% improving from a drop of 2.8% in the previous quarter. Recovery was chiefly attributed to non-durable and semi-durable items whereas durable items kept falling. The Thailand Financial Policy Office projected that Thailand's economy would grow by 5.0% to 8.0% in 2012 as a result of household consumption expanding and increase in minimum wage of THB 300/day. CPI was projected by 3.6% in 2012, it would drop as compared to last year due to the decline of global oil price and the slowdown of European economies.
STATS ON THE GO
2Q12 Overall CBD Vacancy Direct Asking Rents Absorption (sq.m.) 11.64% 623.73 27,767 Q-O-Q CHANGE -1.3% 1.37% 7,053 Y-O-Y 12 MONTH CHANGE OUTLOOK 0.3% 2.23% 12,464
SOURCE: National Economic and Social Development Board (NESDB), National Statistical Office
RENT SLIGHTLY RISING
Overall rental rate in the Bangkok CBD office market was THB 623.73 per square meter per month (/sq.m./mo). It was a slight increase from the previous quarter by 1.37% and 2.23% in the same period last year as a result of new completion and new renovation of office buildings in the CBD. New prime office buildings started to set their rental rate at around THB 750/sq.m./mo. Therefore, it is now a landlord's market due to the strong bargaining power.
CBD RENTAL VS. VACANCY RATES
Without new supply in the second quarter of 2012, Bangkok CBD stock stands at 2.25 million sq.m. and 1.48 million sq.m. in Bangkok Non-CBD, which was unchanged from the previous quarter. Bangkok CBD and Non-CBD enjoyed its vacancy rate 11.64% and 4.71% respectively. Bangkok office rental rate continually increased in the second quarter of 2012 due to Thailand's economic expansion. Without negative factors, the Bangkok office market would enjoy its vacancy and rental rates.
Thailand economy was projected to expand positively by 5.0% to 8.0% in 2012 and the Bangkok office market is expected to grow continually. The highlight of the booming office area focused on Asoke & Ratchada since there are several office projects being planned for development. An approximate 170,000 sq.m. of office space is expected to be added into the market in the next two years and this includes the Stock Exchange of Thailand's new office which was planned to be developed as Thailand's first financial hub in this area.
SUBMARKET INVENTORY OVERALL VACANCY RATE UNDER CONSTRUCTION YTD CONSTRUCTION COMPLETIONS 0 0 0 0 0 0 0 0 0 0 0 0 OVERALL DIRECT NET ABSORPTION -3,337 -776 6,908 -1,571 8,038 18,505 27,767 8,285 9,281 -5,066 12,500 40,267 GRADE A AVERAGE NET US$ SF/YR 2Q12 645 613 598 717 539 705 624 477 634 515 522 605 2Q12* $22.67 $21.53 $21.02 $25.19 $18.95 $24.76 $21.92 $16.78 $22.27 $18.09 $18.34 $21.25 EURO SF/YR 2Q12* 18.03 17.12 16.72 20.03 15.07 19.69 17.43 13.34 17.71 14.38 14.58 16.90
*RENTAL RATES REFLECT ASKING $PSF/YEAR ** TOTAL OF CBD AND NON-CBD
SIGNIFICANT 2Q12 RELOCATION TRANSACTIONS BUILDING Park Venture MARKET CBD Wireless TENANT Japan Finance Corporation BUILDING CLASS A SQUARE METER N/A
SIGNIFICANT 2Q12 CONSTRUCTION COMPLETIONS BUILDING MARKET TENANT SQUARE METER COMPLETION DATE -
SIGNIFICANT 2Q12 PROJECTS UNDER CONSTRUCTION BUILDING LT Building The 9th Tower Grand Rama IX (Tower B) The 9th Tower Grand Rama IX (Tower A) Central Rama IX (Office Tower) G Land Tower AIA Capital Center Stock Exchange of Thailand AIA Sathorn Tower MARKET NON-CBD New Petchburi NON-CBD Asoke&Ratchada NON-CBD Asoke&Ratchada NON-CBD Asoke&Ratchada NON-CBD Asoke&Ratchada NON-CBD Asoke&Ratchada NON-CBD Asoke&Ratchada CBD Sathorn TENANT SQUARE METER 3,300 20,000 40,000 9,000 88,000 26,000 n/a 70,000 COMPLETION DATE 3Q2012 3Q2012 4Q2012 4Q2012 3Q2013 4Q2014 4Q2014 4Q2015
* RENEWAL - NOT INCLUDED IN LEASING ACTIVITY STATISTICS
Nexus Property Consultants Co., Ltd. in Association with Cushman & Wakefield 31st Fl., BKI Building/ Y.W.C.A. 25 South Sathorn Road, Thungmahamek, Sathorn, BKK 10120, Thailand Tel: +66 2 286 8899 www.cushmanwakefield.com
This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete. Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. ę2011 Cushman & Wakefield, Inc. All rights reserved.