Vacancy rates in the Bangkok office market rose 3.35% during 2009.

Research from Knight Frank Thailand has revealed vacancy rates in the Bangkok office market increased on average by 3.35 per cent during 2009.

The firm reported that, in light of the economic climate, most firms cancelled expansion plans and froze recruitment for all but the most essential positions. Many embarked on efficiency drives to make better use of the space they occupy and returned space which became surplus to their requirements.

The report, published last week, noted: “Whilst this modest improvement is in line with anecdotal accounts of an improving business climate, we remain reluctant to describe this as a beginning of a trend at this stage. The economy is still in a weakened state subject to stability in the political arena and amid concerns about a double dip in Thailand’s major export markets, the U.S. and Chinese economies.”

The company expects to see further pressure on vacancy rates with the release of new supply – amounting to almost 5 per cent of the grade A stock – coming on stream during 2010.

The report concluded: “The outlook for the Thai office market is as uncertain as the outlook for the Thai economy. Reports that domestic consumption is up and exports are recovering are encouraging, and should these trends continue unabated then we can expect to see demand for office space recover by the second half of the year. This however comes with the usual caveat so long as there is no further political disruption or any further weakening in the global economy.”

SOURCE: Property-Report.com