Covid-19 has hit the office rental business hard, with many high-end office spaces left vacant after companies have shut down or moved to cheaper places, said Surachet Kongcheep, managing director at Phoenix Property Development and Consultancy.
“In the first quarter, there is over 60,000 square metres of new rental space that is still vacant in Bangkok, and we expect supply of new rental space could rise to over 200,000 sqm this year,” he said. “About 55 percent of this space is in the city’s central business district [CBD].”
Surachet said this trend could continue for at least six months or until a vaccine is found for Covid-19.
‘“More companies may consider downsizing their workspace by letting people continue working from home, which has been proved to be an effective and economical alternative during the government’s lockdown,” he said.
“In the first quarter, average rental fees for office space in Bangkok are still high since most companies only began negotiating for discounts with their landlords in April,” added Surachet. “In the second quarter, however, we shall see the average rental fee gradually come down as tenants have asked for discounts of between 20 and 50 percent for the next three to six months to keep their businesses afloat during the Covid-19 crisis.”
“The latest survey reveals that the average monthly rent for grade A office space is Bt1,100 per sqm within the CBD or Bt800-Bt850 outside the CBD,” said Surachet. “Price is the main reason companies are deciding to move out of CBD areas.”