Full-year take-up reaches five-year record high

• Prime net absorption totalled 19,500 sqm. Demand from recent and new projects dominated the market, while mid-aged buildings saw occupancy drop. Full-year volume reached 107,200 sqm, surpassing pre-pandemic levels.
• Gross leasing volume rebounded to a healthy 21,800 sqm, recovering from a two-year record low. Most leases were “flight-to-quality” relocations.

High vacancy rates persist due to continuous supply influx

• Grande Centre Point Lumphini commenced operations in Q4 2024, adding 10,000 sqm to the market. Total prime office stock in Bangkok’s CBA increased to 1,571,300 sqm.
• The Prime’s vacancy rate compressed slightly to 28.9%. This marked a decrease from a 24-year peak of 29.7% recorded in Q3. However, the rate is expected to remain high in the near-term, mainly due to the ongoing supply influx and limited demand for expansion.

Flat rents pressure yield compression

• Prime gross rents remained at THB 1,027 per sqm, per month, up by 6.7% y-o-y. While most buildings saw stable rents, recent completions with high occupancy increased asking rents. Net effective rents, likewise, grew by 6.6% y-o-y, to THB 786 per sqm, per month.
• Capital values continued to rise, up by 0.8% q-o-q and 8.5% y-o-y to THB 168,300 sqm. With rising land and construction costs outpacing rent growth, the prime office market yield contracted slightly, by 5 bps to 5.60%.

Outlook: Positive demand and rent growth expected, albeit with high vacancy

• Total office stock is projected to reach 1.8 million sqm by end-2025. Pre-leases in recent and upcoming projects are likely to dominate market activity. The vacancy rate is expected to compress marginally but remain high at 28%.
• While rent declines are expected among aged buildings as market competition intensifies, the overall market expects a rent increase in line with a premium supply influx. High development costs should boost capital values, with older assets seeking refurbishment.