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Local office rents decline, Bangkok now Asia's bargain |
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Monday, 06 August 2007 |
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Quality office space in Bangkok is the cheapest in Asia now that the average
rent declined quarter-on-quarter for the first time since 2000, according to the
international property consultancy CB Richard Ellis.
The average rent for prime office space in Bangkok's central business district
is slightly more than 740 baht (US$22) per square metre per month, compared with
the equivalent of 2,000 baht in Singapore, 1,480 baht in Ho Chi Minh City and
4,500 baht in Tokyo.
International Financial Centre Tower 2, the highest building in Hong Kong, has
attained a record rental of about 7,400 baht.
Nithipat Tongpun, director and head of office and retail services at CBRE
Thailand, said the slowing economy was expected to push rental rates in Bangkok
even lower in the near term.
The company projects that the downward pressure on rental rates could further
increase at the end of the year when new grade-A supply enters the market. There
are 520,000 sq m of new supply in the pipeline from 2007 to 2009, or about
173,000 sq m a year.
However, the situation could reverse if business confidence is restored, when
new demand would exceed increased supply.
Mr Nithipat said demand had fallen because of a weak domestic economy and
uncertainty involving the proposed amendments to the Foreign Business Act to
control foreign investment in the services sector.
Many overseas companies have delayed expansion and there has been limited new
foreign investment in the services sector.
''This has resulted in occupied offices falling dramatically. New net take-up of
office space fell by more than 30% in the first quarter on a year-on-year basis,
the lowest quarterly take-up since 2000.''
source: Bkk Post
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