Resilience in the Face of Market Uncertainty

Despite a surge in office building construction across Bangkok creating uncertainty in the rental market, the prime Ploenchit-Chidlom-Wittayu zone continues to demonstrate robust growth. This area, known for attracting multinational corporations and major tenants, remains highly sought-after despite the challenges.

Insights from Knight Frank Thailand

Nattha Kahapana, managing director at Knight Frank Thailand, notes that while the overall office supply in Bangkok is increasing and hybrid work models are leading many companies to downsize, the Ploenchit-Chidlom-Wittayu zone continues to attract significant interest from investors and tenants alike.

Occupancy Rates and Supply Growth

Although occupancy rates have decreased from a peak of 95% in 2019 to 76% today, buildings within this zone show greater resilience compared to other areas of the city. The zone has seen a 30% increase in supply over the past five years, reaching 220,000 square metres, which surpasses the CBD's overall growth rate of 24%.

Connectivity and Quality Drive Demand

The Ploenchit-Chidlom-Wittayu zone's excellent connectivity, encompassing both exceptional public transport links and a concentration of green-certified Grade A office buildings, maintains its appeal. Rental rates have increased by 5% to reach a Bangkok-wide high of 1,090 baht per square metre per month, reflecting persistent robust demand.

Future Developments and Market Trends

Looking ahead, the zone is poised for significant transformation with the upcoming CPN Siam Square project, slated for completion in 2027, introducing over 25,000 square metres of office space. The evolving office market is driven by a growing preference for high-quality buildings, with many large tenants and multinational corporations seeking more premium spaces.

Enduring Significance of Building Quality and Location

Despite being more than five years old, Gaysorn Tower, Park Venture, and Siam Piwat Tower continue to demonstrate strong potential, commanding rental rates exceeding 1,300 baht per square metre per month and boasting occupancy rates above 90%. This underscores the importance of building quality and location in attracting tenants.

One City Center: A Case Study

One City Center (OCC), a Grade A office building completed in 2023, is currently garnering significant attention. With initial occupancy rates at 75% and 70%, this project is projected to experience substantial growth, with rental rates anticipated to increase by 90% by 2025, positively impacting the long-term value of the property.