Corporate strategies needed for tightening prime office market
With space in the city's business areas already scarce and becoming more so, tenants should move now to negotiate favourable lease extensions, make more efficient use of space and consider relocating further out
The happy days for occupants of prime office buildings in Bangkok's main business areas are coming to an end. With limited new supply and growing demand, this market segment is now in full recovery.
And even as most Grade A office buildings in these areas are filling up, no new supply is planned for completion between now and 2014, and none will be completed until at least 2015. Gross rents for prime offices in the area rose by 6.8% in 2012 and are likely to rise by another 15-20% in 2013.
While this is good news for building owners, corporate occupants are facing an increasingly difficult position as they have less power in negotiations with landlords. Companies with expansion plans may also be challenged to secure additional space in the same building they occupy as most of the better office buildings in central areas have only limited space available.
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