Outlook 2023 Thailand

THAILAND

KEY MESSAGES BRISBANE ANGKOK

SUPPLY

DEMAND

RENTS

KEY OUTLOOK

 718,352 sqm of new space is currently under construction from 2023 to 2026.  Of this, 269,395 sqm across five projects is expected to complete in 2023.

 Tenant demand rebounded strongly in 2022; net absorption is forecast to reach 157,887 sqm.  The office leasing market is expected to continue to be active, driven by strong tenant demand. The overall vacancy rate is expected to decline marginally to 11% from 12% in the year ahead.  In response to an influx of space, we expect to see office leasing activity continue to be tenant favourable.

 Rents are forecast to grow by 5% in 2022, before slowing to 2.8% in 2023 to reach THB1,193/sqm/month.  After this time, rents are expected to grow more slowly as new supply enters the market.

 The Bangkok office market is forecast to see greater competition to secure tenants and so remain tenant favorable in the near term.  Landlords are expected to offer competitive terms in order to retain existing tenants and attract new occupiers.

BANGKOK NEW SUPPLY

NEW SUPPLY (SQM)

300,000

 718,352 sqm of new space is currently under construction and due to enter the market from 2023 to 2026.  Of this, 269,395 sqm is expected to enter the Bangkok CBD market in 2023.  2023 new supply comprises five projects: WHA KW (9,900 sqm), One Bangkok Tower 4 (95,000 sqm), One Bangkok Tower 5 (97,000 sqm), The EmSphere (20,000 sqm), and Siam Pathumwan House (47,495 sqm).

FORECAST

250,000

200,000

150,000

100,000

50,000

0

2020

2021

2022F

2023F

2024F

2025F

2026F

Source: Cushman & Wakefield

BANGKOK

DEMAND & VACANCY

NET ABSORPTION (SQM) AND VACANCY RATE (%)

FORECAST

-40,000 -20,000 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000

14.0%

 Tenant demand rebounded strongly in 2022, driven by corporate expansion. Notwithstanding, the Grade A Office market in the CBD continues to be tenant favorable.  Net absorption is forecast to reach 157,887 sqm in 2022. Beyond this, vacancy is expected to decline marginally to 11% from 12% before largely tracking sideways.

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

2020

2021

2022F 2023F 2024F 2025F 2026F Net Absorption Vacancy Rate

Source: Cushman & Wakefield

BANGKOK RENT GROWTH

RENT (THB/SQM/MO) AND RENT GROWTH (% PER ANNUM)

FORECAST

5.0%

1,400

 Rental growth of 5% is expected in 2022, following 2% growth in 2021.  Beyond this, rents are forecast to grow by 3% in 2023, to reach THB1,193/sqm/month.  After this time, rent growth will slow as new supply enters the market and provides occupiers with more options.

4.5%

1,200

4.0%

1,000

3.5%

3.0%

800

2.5%

600

2.0%

1.5%

400

1.0%

200

0.5%

0

0.0%

2020

2021

2022F 2023F 2024F 2025F 2026F THB/SQM/MO Rent growth (%)

Source: Cushman & Wakefield

CONTACTS

RESEARCH: Sarawut Tikhachon Senior Research Analyst, Thailand sarawut.tik@cushwake.com LEASING: Yupa Sathienpayabut Head of Transactions, Thailand yupa.sat@cushwake.com Asia Pacific Dr Dominic Brown Head of Insight & Analysis, Asia Pacific dominic.brown@cushwake.com

TENANT REPRESENTATION: William Gramond Head of Tenant Representation, Thailand william.gramond@cushwake.com CAPITAL MARKETS : Rory Newman Senior Manager– Investment & Advisory, Thailand rory.newman@cushwake.com

Disclaimer. The information in this material is general in nature and has been created by Cushman & Wakefield for information purposes only. It is not intended to be a complete description of the markets or developments to which it refers. The material uses information obtained from a variety of sources which Cushman & Wakefield believe to be reliable however, it has not verified all or any information and does not represent, warrant or guarantee its accuracy, adequacy or completeness. Any forecasts or other forward looking statements contained in this material may involve significant elements of subjective judgment and assumptions as to future events which may or may not be correct and are beyond the control of Cushman & Wakefield. Cushman & Wakefield is not responsible for any loss suffered as a result of or in relation to the use of this material. To the extent permitted by law, Cushman & Wakefield excludes any liability, including any liability for negligence, for any loss, including indirect or consequential damages arising from or in relation to the use of this material. All expressions of opinion included in this material are subject to change. © 2022 Cushman & Wakefield. All rights reserved.