Office occupancy slips 1.2%

The occupancy rate for prime Bangkok offices in the first quarter was 86.8%, down by 1.2% quarter-on-quarter as firms opted for more affordable office space, says the global real estate adviser DTZ.
This fall followed two straight quarters of increase and was due partly to cost-cutting in some industries, where a handful of firms moved to smaller spaces or lower-grade buildings within the central business district or in fringe locations.
Pockets of downsizing and consolidation by businesses may continue throughout the first half of 2010, said DTZ.
But prime office rental rates in the first quarter remained unchanged at an average of 648 baht per square metre per month for the third consecutive quarter. Landlords are holding firm on rents in anticipation of a turnaround in the sector in the near future as the economy grows.
The first quarter also saw several large-scale office transactions in the non-prime sector, showing domestic investors’ keen interest in purchasing after their cautious stance over the past year.
Low Ming Tze, senior manager of DTZ Thailand Research, said rents were expected to remain stable over the next few quarters while demand would mostly come from local firms and foreign businesses already present in the market.
DTZ also found that both occupancy and rental rates in the retail market were unchanged from the previous quarter at 94.2% and 2,290 baht per sq m per month.
Activity increased in the midtown area, where both occupancy levels and rental rates rose.
Midtown occupancy rates rose to 93.2% – up from 92.2% in the previous quarter – with rents up by 2% to 1,560 baht per sq m per month.
Source : bangkokpost.com