Bangkok office demand declines after seven consecutive quarters of increase

Net absorption was at -5,500sqm in Q1.

Bangkok’s office market recorded a net absorption figure of -5,500 sq m in Q1, ending a seven-quarter rise since mid-2022, according to a report from Knight Frank. 

However, in Q1, net absorption for green office spaces remained strong at 29,600 sq m, while non-green office spaces saw a further decline to -35,100 sq m. 

Here’s more from Knight Frank:

Over the past year, annual net absorption has highlighted a trend where new leases increasingly prioritize green office space, totaling 138,700 sq m, in contrast to -37,000 sq m for office spaces without green certifications.

In this quarter, the office market outside the Central Business District (non-CBD) demonstrated robust demand, with a net absorption of 20,800 sq m, in stark contrast to the CBD area, where net absorption was -26,300 sq m. The activities in the CBD were primarily driven by relocations from older to newer buildings, which offered greater incentives. This is especially notable given that the new supply in the CBD is expected to reach a historic high in 2024. 

Conversely, demand in the non-CBD areas gradually improved as firms became more open to establishing headquarters outside the city center, especially in locations with extensive mass rapid transit coverage.