Robust office rental performance
published : 2 Feb 2021 at 14:45
Frasers Property Commercial (Thailand), the leading Grade A commercial property developer in Bangkok’s CBD, attributes result to customer retention strategy
Frasers Property Commercial (Thailand) reveals robust performance of the office leasing business for the year 2020 with an occupancy rate of over 90% despite the impact from the COVID-19 and business uncertainties on hotels and meeting facilities. The company’s customer retention strategy and diversified portfolio spanning mixed-use projects, office building, hotels, condominium and meeting facilities, it reported being able to maintain the businesses and prevail amid the economic challenges. The company also highlighted precautionary measure to prevent the spread of the COVID-19 throughout its properties.
Mr. Withawat Koottatep, First Executive Vice President – Commercial Development, Frasers Property Commercial (Thailand) said: “The first wave of COVID-19 in Thailand last year has highly affected the tourism and hospitality sectors. As a consequence, the hotels, meeting facilities and shopping malls have been severely impacted. Developers must reconsider and redefine how to sustain their businesses through this crisis. With our diversified properties portfolio, Frasers Property Commercial remains strong and resilient. Although the performance of our hotels and meeting facilities business dramatically dropped, we were able to deliver a satisfactory performance of our office leasing business. Currently, we have office building under our management amounting to over 209,000 square metres. Moving forward, we will focus more on cost optimisation and operational efficiency while also preparing for more challenges and uncertainties ahead.”
“In terms of the overview of commercial properties in 2020, we saw demand for rental office space drop by 50% compared with 2018-2019. However, we were able to maintain an average occupancy rate of over 90% as a result of having a portfolio of Grade A offices located in Bangkok’s CBD, including Ploenchit, Sathorn, Rama IV and Samyan. Additionally, we benefit from having customers from various sectors, enabling us to reduce dependency on a single industry. Despite the new wave of COVID-19, we have not received customer requests to downsize or terminate the leases. Nevertheless, we are monitoring the situation closely to assess and determine the severity of the consequences if such requests arise.”
In the past year, Frasers Property Commercial (Thailand) has altered its operations with two strategies:
1. Focusing on customer retention to build long-term relationships and gain trust from the customers
To retain existing customers, the company has allocated a relief fund to assist those affected by the pandemic. Designated teams had conversations with each customer to understand their financial situation and share plans to address their health and financial concerns. In addition, the rental fee was waived for customers whose stores were closed during the emergency decree. The company has also provided other assistance to customers, both directly and indirectly impacted by the pandemic.
2. Optimising operational costs and investing in safety and hygiene measures
The company has reallocated marketing budget to invest in safety and hygiene measures. As mass gathering events were cancelled to avoid overcrowding and observe social distancing guidelines, the budget was reallocated to purchase temperature scanning devices, schedule weekly disinfection services and clean contact surfaces more frequently. Furthermore, the company has adopted a no-layoff policy despite businesses in some areas being closed under lockdown.
Currently, Frasers Property Commercial (Thailand) owns five office properties, namely, Mitrtown Office Tower, FYI Center, and Golden Land Building, and two properties listed under Golden Ventures Leasehold Real Estate Investment Trust (GVREIT), namely, Sathorn Square and Park Ventures Ecoplex. Total gross rentable area amounts to 209,000 square metres. With over 20,000 employees from Thai and international customers on the premises, the company is considered one of the country’s leading commercial property developers.
“Frasers Property Commercial understands our customers’ situations. Besides increasing COVID-19 precautionary measures in our office properties, we work diligently to help customers sustain their business and ensure that their employees are working in a safe environment. We recognise the importance of retaining existing customers who are leading companies with strong financial performance. Meanwhile, we could secure new tenants to occupy vacant space as our Grade A office properties are located in Bangkok’s CBD areas and connected to BTS and MRT lines. As such, all our properties are of high interest to customers who value the quality lifestyle of their employees,” Mr. Withawat concluded.