Bangkok Grade A office sector outperforms other segments in Q2

The Grade A segment saw the highest increase in occupied space.

The strong demand for recently completed buildings drove the Bangkok office market’s positive net absorption across all grades, according to Knight Frank.

In Q2 2023, Knight Frank data revealed that the total occupied space in the Bangkok office market witnessed a rise of 53,000 sq m, reaching a total of 4.69 million sq m. All grades continued to experience positive net absorption during this period. 

Here’s more from Knight Frank:

Grade A demonstrated the most substantial increase in occupied space, with a quarterly net absorption of 36,600 sq m, primarily driven by strong demand for recently completed buildings. Similarly, grade B experienced significant improvement, nearly doubling its last quarter’s net absorption to 14,100 sq m. Meanwhile, grade C did not see significant changes, recording a small positive net absorption of 2,300 sq m.

The overall market occupancy rate experienced a slight decline of -0.2% pts Q-o-Q to 79%. Grade A witnessed the most reduction among all grades, declining by -2.2% pts Q-o-Q and -3.9% pts Y-o-Y to reach 83%. Grade B saw a slight improvement in occupancy rate, increasing by 0.4% pts Q-o-Q, although it still fell by almost 2% pts Y-o-Y. Finally, the occupancy rate for grade C remained relatively stable, maintaining a level just below 80%.

In Q2 2023, the office market in Thailand recorded an average rent of THB 815 per sq m per month, indicating a slight increase of 1.0% Q-o-Q and 1.3% Y-o-Y. Among the different office grades, Grade A, which commanded the highest rent at THB 1,184, showed a more substantial growth of 1.9% Q-o-Q and 2.6% Y-o-Y, attributed mainly to the completion of prime-grade offices in the central business district (CBD).

Grade B followed with an average rent of THB 842, experiencing a 1.2% increase Q-o-Q and 1.4% Y-o-Y. Conversely, Grade C had the lowest rent at THB 509, witnessing very slight changes Q-o-Q and Y-o-Y.