Bangkok still cheapest office location in region despite rising rents

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Bangkok still cheapest office location in region despite rising rents
Aliwassa Pathnadbutr
THE NATION

BANGKOK: -- IN 2014, Bangkok office rents rose by 4 to 7 per cent based on grade and area despite the weak economy. The overall vacancy rate was 9.5 per cent and CBRE Research estimates total net new take-up stood at around 180,000 square metres.

However, looking from a global perspective, Bangkok office rents remain cheap, ranking 115 out of 126 cities surveyed by CBRE.

The four most expensive locations were London's West End, Hong Kong's Central district and Beijing's Finance Street and CBD with total occupation costs of between Bt5,500 to Bt8,000 per square metre per month compared to Bt900 - Bt1,000 per square metre per month in Bangkok's best office buildings.

The cheapest location for office space in the world was in Durban, South Africa, with prime office rents of Bt450 per square metre per month.

The biggest increase in rents across the world was in Dublin, Ireland, where rents rose by almost 35 per cent in one year and in the Philippine capital of Manila where rents had risen by 20 per cent last year.

The biggest drops were in Santiago, Chile, where prime office rents fell by 13.5 per cent and in Lyon, France, where they fell by 10 per cent.

Bangkok was the cheapest office location in the Asia-Pacific Region.

There is limited new supply and only two grade-A buildings - Bhiraj Tower at EmQuartier and AIA Sathorn Tower - that will be completed in Bangkok's central business district this year.

Overall, less than 200,000 square metres of new office space per year is expected to be completed this year and next in Bangkok and even with relatively conservative forecasts, new demand is expected to exceed new supply and rents are expected to continue rising.

Few new office developments are underway in Bangkok, as office developers compete with condominium developers for prime sites given zoning and planning regulations allow either use. With record high condominium prices in prime locations, condominium developers are expected to continue outbidding office developers for sites because their returns will be higher.

CBRE expects this will mean that there will few new office developments. Office rents will have to rise by 30 to 50 per cent before returns on office development begin to match those currently being achieved by condominium development.

In addition to limited new supply, Bangkok's office stock is ageing. Some of the older buildings with slow lifts, poor air-conditioning and poor floor plates are becoming obsolete, especially those that have not been substantially refurbished or are in locations not linked to the mass-transit system. These buildings are less popular with tenants who prefer modern, better-located buildings. This will increase the demand for quality buildings in most popular locations.

Source: http://www.nationmultimedia.com/business/Bangkok-still-cheapest-office-location-in-region-d-30252583.html


-- The Nation 2015-01-24

[marcusd]

Even so, the price of these rents is still high.

An average Office for administration is about 100 - 150 square metres. Based on say 100 sq mtrs, this equates at 1000 naht per mtr to $200,00 AUD per annum. That is Far in excess of Melbourne or Sydney rents and this is ASIA for gods sake! Cheapest in Asia? get real

[monkey dog]

exchange rates are currently fluctuating wildly and rapidly so without a fixed date given this data is meaningless.

Edited January 24, 2015 by monkey dog

[alfalfa19]

Nonsense, as usual.

[Time Traveller]

So Bangkok is experiencing peak skyscraper? Hardly a surprise given the restrictions to business, political issues and the fact that Bangkok came last in the latest economic ranking of 300 global cities.

Edited January 24, 2015 by Time Traveller

[Robert24]

Even so, the price of these rents is still high.

An average Office for administration is about 100 - 150 square metres. Based on say 100 sq mtrs, this equates at 1000 naht per mtr to $200,00 AUD per annum. That is Far in excess of Melbourne or Sydney rents and this is ASIA for gods sake! Cheapest in Asia? get real

Not sure how you come up with this calculation but Sydney for sure is more expensive than Bangkok. Most expensive location in Asia Pacific is Mumbai, followed by Tokyo, Hong Kong, Seoul, Sydney, Singapore, Shanghai and somewhere towards the end of that list is Bangkok.

[trogers]

Rental cost is a tinny tiny part of a business.

The big factor to consider is the cost from govt red tape and low productivity of local staff.

Edited January 24, 2015 by trogers

[DDuval]

Even so, the price of these rents is still high.

An average Office for administration is about 100 - 150 square metres. Based on say 100 sq mtrs, this equates at 1000 naht per mtr to $200,00 AUD per annum. That is Far in excess of Melbourne or Sydney rents and this is ASIA for gods sake! Cheapest in Asia? get real

Not sure how you come up with this calculation but Sydney for sure is more expensive than Bangkok. Most expensive location in Asia Pacific is Mumbai, followed by Tokyo, Hong Kong, Seoul, Sydney, Singapore, Shanghai and somewhere towards the end of that list is Bangkok.

Mumbia, who would want an office there. I wouldn't allow my dog to visit a place like that...

[smutcakes]

Even so, the price of these rents is still high.

An average Office for administration is about 100 - 150 square metres. Based on say 100 sq mtrs, this equates at 1000 naht per mtr to $200,00 AUD per annum. That is Far in excess of Melbourne or Sydney rents and this is ASIA for gods sake! Cheapest in Asia? get real

What an odd post. Absolutely top whack rents in BKK are 900-1000 baht per sqm per month which equates to 12,000 baht per annum or 465 Aussie dollars.

Prime Sydney rents are closer to 1,600-1,800 dollars per sq m.

[Robert24]

Even so, the price of these rents is still high.

An average Office for administration is about 100 - 150 square metres. Based on say 100 sq mtrs, this equates at 1000 naht per mtr to $200,00 AUD per annum. That is Far in excess of Melbourne or Sydney rents and this is ASIA for gods sake! Cheapest in Asia? get real

Not sure how you come up with this calculation but Sydney for sure is more expensive than Bangkok. Most expensive location in Asia Pacific is Mumbai, followed by Tokyo, Hong Kong, Seoul, Sydney, Singapore, Shanghai and somewhere towards the end of that list is Bangkok.

Mumbia, who would want an office there. I wouldn't allow my dog to visit a place like that...

well I guess plenty people want to have an office in the business centre of India otherwise rentals wouldn't be so expensive as they are in Mumbai.

[surangw]

they are comparing the center of bkk with the center of bkk

[DDuval]

Even so, the price of these rents is still high.

An average Office for administration is about 100 - 150 square metres. Based on say 100 sq mtrs, this equates at 1000 naht per mtr to $200,00 AUD per annum. That is Far in excess of Melbourne or Sydney rents and this is ASIA for gods sake! Cheapest in Asia? get real

Not sure how you come up with this calculation but Sydney for sure is more expensive than Bangkok. Most expensive location in Asia Pacific is Mumbai, followed by Tokyo, Hong Kong, Seoul, Sydney, Singapore, Shanghai and somewhere towards the end of that list is Bangkok.

Mumbia, who would want an office there. I wouldn't allow my dog to visit a place like that...

well I guess plenty people want to have an office in the business centre of India otherwise rentals wouldn't be so expensive as they are in Mumbai.

So why would anyone want to set up an office in a hole like that, my god these people think Bangkok is clean. If rents where expensive in the Western world fair enough but Asia your having a Paul Mcgrath.

[yellowboat]

Rental cost is a tinny tiny part of a business.

The big factor to consider is the cost from govt red tape and low productivity of local staff.

It is the red tape; taxes, immigration, customs. All make Thailand less attractive. This general hurt foriegn entrepreneurs and contractors, people who once used Thailand as a second home. They did not put money in the elites pockets, just the middle class Thais.

Found a small office on a quiet soi on Silom for B10000 a month near Sala Dang station. My customers in Thailand have good staff.

[smutcakes]

well I guess plenty people want to have an office in the business centre of India otherwise rentals wouldn't be so expensive as they are in Mumbai.

Mumbia, who would want an office there. I wouldn't allow my dog to visit a place like that...

So why would anyone want to set up an office in a hole like that, my god these people think Bangkok is clean. If rents where expensive in the Western world fair enough but Asia your having a Paul Mcgrath.

Quite simply there are a many reasons; namely they are an Indian company, there is a huge pool of well educated cheap labour; India is a huge market etc etc

I think you are trolling or you are just thick. Probably a bit of column a and column b.